Tony Cooper – CEO, Energetics, Australia
The CEO of carbon and energy management consultancy, Energetics, Tony Cooper discusses the main takeaways from the COP21 conference in Paris, and their implications for Australia’s climate change targets. He also describes the value to the bottom line that can be created when businesses focus on improving energy productivity – an emissions reduction strategy that delivers economic benefits, and comments on the nation’s current carbon policy environment.
COP21 convened back in December 2015 in Paris—a conference that has been hailed by many as a monumental push towards tackling climate change. Can you start off by describing how the results of this event align with what you had personally hoped to have been addressed and achieved?
After more than 30 years consulting to Australian business on climate change and energy management, it was especially significant for me to see the role that businesses played at COP21. There had been criticisms in previous COPs that the business community wasn’t adequately represented. The participation of a number of leading CEOs at various stages was significant in itself because it was a clear signal to government and policy markers that rather than avoiding action on climate change, businesses were in fact taking steps to address a number of the main challenges.
Companies came to Paris to showcase their achievements. There were people representing traditional energy sources that were looking ways to alter their business models to lessen environmental impacts, such as Total, and Australia’s own Origin Energy and AGL Energy. But there were also people representing ‘new age’ energy and talking about their role in a clean energy future. So, it was certainly fascinating to witness the traditional dichotomy of energy producers come together with a single purpose.
Based on your observations, what type of feedback has the COP21 agreement generated among the business community?
What businesses have been craving globally has been policy certainty. Strategically, it’s very hard for business leaders to plan for future events if there’s a lack of clarity and certainty around policy positions. COP21’s greatest achievement was establishing a new global agreement because that will drive a revision of policy within different jurisdictions around the world—giving companies more certainty from which to plan and act. We also see clean technologies and renewables strongly backed by the investment community, which is a signal for many businesses as they review their own energy supply options.
Some have argued that the agreement is “dangerously inadequate” and fails to produce actionable steps that would materially impact global warming. Do you believe these critics are just playing devil’s advocate? Or do these claims actually have some basis?
The science certainly tells us that global warming must be contained to within a 2oC increase on pre-industrial global temperatures, and we’ve heard concerns that the agreement doesn’t go far enough. However, what makes the deal struck at COP21 so significant and so exciting, was the overwhelming consensus across nations that they must decarbonize: many of the old stumbling blocks in negotiations were removed. Also, the agreement formally includes the aspirational target of containing warming to a 1.5oC increase. This is a remarkable achievement and sets the 2oC target as the minimum.
What was also significant to me was the number of businesses that spoke about transformational activities that they had already undertaken. In some cases, businesses had almost 50 percent penetration of renewables in their energy mix, with plans to source 100 percent of their energy from renewables. Four years ago, many were talking about smart grids and electric cars, now many of these technologies have reached material penetration in various places around the globe. Action is well underway.
Now obviously Australia was also a major participant in this conference, especially as a country producing some of the highest CO2 emissions on a per capita basis. In your opinion, can Australia truly commit to its emission targets given the current policy environment and emissions performance?
Currently, while Australia is tracking to achieve its near-term 2020 emissions reduction target, more work is needed to achieve our 2030 goals. However we have a good policy framework within which we can drive deeper emissions reductions; particularly considering the future role that the safeguarding mechanism can play as a baseline and credit carbon trading scheme, and the new national energy productivity plan.
I am hopeful because we see in the prime minister, Malcolm Turnbull, a much deeper understanding of climate change. His attendance at the COP in Paris, in addition to the Foreign Minister’s and the Environmental Minister’s, was a clear signal that he is very aware of the science and the challenges we face with a changing climate. He has the capacity to articulate those problems in a constructive way, and understands the role of innovation in driving a clean tech future which not only addresses climate change, but adds new value to our economy.
The general consensus suggests that the current government will be re-elected this year, but more specifically, re-elected with a stronger policy mandate.
In line with your 2011 predictions, since we let met, the country has seen the implementation of a carbon tax and subsequent emissions trading scheme—only to have been repealed and replaced with the Direct Action plan in July 2014. How has this change affected the way companies approach carbon abatement?
The carbon tax became a political football and very divisive. In some respects, many businesses viewed the removal of the carbon tax as a reason for inaction, and they scaled back carbon abatement projects. And I think it’s fair to say that most people saw Direct Action as a relatively underwhelming response by the incoming Coalition Government to climate change.
Yet, going back several years, Australia was at the forefront of decision making and policy frameworks with respect to climate change, but we’ve since lost that leadership position. Going into COP, we were viewed by some as ‘laggards’ and I certainly think work needs to be done to catch up to both nations which are seen as leaders on climate action (some of whom are major trading partners), and businesses working to decarbonize and leading the push for clean tech. That said, Australia’s participation at the conference proved to be proactive and outcomes-focused.
To what degree has the industry and businesses alike supported this push towards a low-carbon economy?
There are always leaders and innovators; and there are followers and laggards. Leading businesses across different sectors have continued to push boundaries and innovate to address climate change. Businesses that recognize that this issue isn’t going away—and requires immediate action—are the pioneers of this age. These are the smarter businesses that make decisions today in hopes of shaping a better future for all.
In the lead up and during COP21 we saw more than 515 companies and investors pledge to take action on climate change, including developing science-based emissions reduction targets, through the ‘We Mean Business’ global coalition. The group represents $US19.8 trillion assets under management. Australia’s Origin Energy became the world’s first energy company to sign up to all seven commitments. Other Australian companies include AGL, Westpac, ANZ Bank and nab are also signatories. I am confident more will follow.
Some players might see the pursuit of a green agenda as an added expense to their operations. From your perspective, how can businesses most effectively turn carbon control into operational and strategic value?
It’s clear from the work we do at Energetics, that most businesses have an opportunity to improve, and in some cases, double their productivity by addressing inefficiencies in processes and systems. By employing more efficient processes or new technologies, companies can strengthen their bottom line, while also reducing their energy consumption, and in turn, their environmental footprint—a win-win. This also falls in line with government mandates. The COAG Energy Council recently released a white paper that nominated improving energy productivity as one of this nation’s primary goals.
There is so much energy wastage. If businesses that are struggling to preserve their profits know that they can protect their revenues by eliminating waste, thereby reducing costs and emissions, why wouldn’t they do it? It can only be of benefit.
Having been largely credited to the firm’s many milestones over the years, what would you consider your most prominent success factors?
For Energetics, investing in people is paramount. Having industry thought leaders has always been a defining factor for our success. Energetics’ staff members are not only well educated, but also well rounded. We’ve had people who have worked a across sectors as diverse as oil and gas, commercial property, metals and minerals, manufacturing, and agriculture.
Secondly, as a business leader, recognizing the economic ebb and flow of your company is crucial. There are periods of growth, and consequently, more challenging periods requiring nimble strategies to stay afloat.
Lastly, you need to remain innovative and relevant. In our case, much of our work involves helping our clients to recognize and solve problems that are yet to manifest. To improve margins and demonstrate value to shareholders, the key is first recognizing that there are ways to produce the same – or greater – output with lower energy intensity, and therefore a lower carbon footprint, which can only serve to advance strategic interests.
What factors ultimately motivated you to maintain such a longstanding presence in this niche?
It’s my passion to help people and businesses alike become successful while ensuring that the environment is protected for future generations. We’d like companies to be around for the long haul, so anything we can do to influence their success, falls in line with Energetics’ mission.
In terms of reputation, performance, and capabilities, what are the most fundamental priorities that you will focus on as CEO in the next few years?
We’ve worked hard on the positioning of Energetics’ brand and reputation. At the same time, the world is a much smaller place with widespread globalization and technological advancements—and you need to reinvent yourself every so often to maintain a competitive advantage. I’m proud to say we’ve helped our clients implement new climate change and energy management strategies across their businesses, whether operations are located solely in Australia or around the world, and we’re looking to expand our services and capabilities to deliver, and surpass, the same levels of quality and excellence. Energetics will consider all possibilities—including organic and inorganic growth—as long as they fall in line with our core vision and values. Although change in leadership is always a consideration, as long as I have a passion for things I’m doing, the team I’m leading and the industries I’m representing, then I will continue getting out of bed each morning with enthusiasm and energy!