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Santos business assumes 4C #globalwarming

It was revealed at Santos AGM in Adelaide by Chairman Peter Coates that the company business plan is based upon a 4 degrees temperature rise scenario from climate change and is at odds with commitments outlined in a statement on climate risk disclosure in April to investors.

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  1. Santos Chairman Peter Coates in answering a question on climate scenarios for Santos business plan at Santos AGM in Adelaide:

    "The pathway that we adopt is the ... 4 degree pathway. It's the one that the world energy agency, the IEA, business as usual...it's the comparison with the IEA business as usual forecast on carbon emissions. As you know the 2 degree scenariowhich you are referring to, there has been no nationally determined commitments to it, there is no NDC to the 2 degree scenario and even the 4 degree scenario is not funded. I think what we are doing is very, very sensible and consistent with good value."
  2. Investors failed to pass a resolution calling for more disclosure from Santos over the risks climate change poses to its business. Here is the text of the resolution:
  3. "Resolution 2 – Strategic Resilience for 2035 and Beyond That in order to address our interest in the longer term success of the company, given the recognised risks and opportunities associated with climate change, we as shareholders of the company request that routine annual reporting includes further information describing: (a) Governance: the roles of the board and management in the oversight, assessment and management of climate-related risks; (b) Strategy: the climate related risks and opportunities and asset portfolio resilience of the company’s businesses, operational strategy and financial planning to various climate scenarios, including both 1.5°C and 2°C pathways; (c) Risk Management: how climate-related risks are incorporated into the company’s risk management framework; (d)Metrics and Targets: the targets used by the company to manage climate-related risks and performance against those targets; (e) Public Policy: the company’s public policy positions related to climate change, including those of industry bodies of which it is a member."
  4. Santos had issued a statement on climate change disclosure a fortnight ago, which seemed to reassure investors, however with this latest statement that Santos business model is aligned with dangerous climate change of 4 degrees Celsius and not in keeping with Paris Agreement climate commitments, maybe investors need to understand the whitewash going on by the Santos board with the statement.
  5. The statement on climate change disclosure issued in April to head off the climate risk disclosure resolution at the AGM says in part:

    "As a global stakeholder in the energy business we recognise our social and environmental responsibility to pursue strategies that address the issue of climate change. We are responding to this challenge in variety of ways...."
  6. including...

    "Informed by science: we recognise the global two degree Celsius target and the scale of the global transition required. We recognise the consensus from international climate scientists that the global climate is changing and that human activity contributes significantly to this trend. In Paris, all countries agreed to limit temperature increases to well below 2 degrees (and pursue efforts to limit temperature increases to 1.5 degrees) and achieve net zero greenhouse gasemissions in the second half of this century"

    and

    "Align business strategy with Paris Climate Change Agreement: our natural gas portfolio strategically aligns with the transition to a low carbon economy...."
  7. Market Forces twitter commentary from Santos AGM:
  8. While Santos says everything they do in exploitation of gas as a transition fuel to replace coal and diesel, assists in reducing climate change, AGL Energy senior executive outlined earlier this week that there is no longer a place for baseload gas power generation in the Australian electricity generation market, although peaking gas will still be useful in short to medium time frames. Solar plus wind with storage (battery and pumped hydro) are now cheaper than gas.
  9. “The energy transition we have all been anticipating will skip ‘big baseload gas’ as a major component of the NEM’s base-load generation and instead largely be a case of moving from ‘big coal’ to ‘big renewables’,” AGL CFO Brett Redman says in a presentation to the Macquarie Australia Conference in Sydney on Tuesday, according to a RenewEconomy report.
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