COMMENT:

It's a strange happenstance where business fills a leadership void created by government.

This is what is happening in the topsy-turvy world of Australian politics and business at the moment, at least in terms of responding to global warming.

Sick of waiting for the Government to introduce an energy and carbon reduction policy, business has decided to introduce its own greenhouse gas policy.

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More than 20 of Australia's electricity generators and retailers and major power users including retailers, manufacturers, and mining and oil companies are believed to be quietly working on a self-regulated package of measures to reduce greenhouse gas emissions, restore energy reliability and improve investor certainty.

Led by the Business Council of Australia, the initiative would be an industry-wide program, placing obligations on participants to help ensure Australia meets its Paris commitments, according to reports.

The businesses are seeking to fill the policy vacuum left by the Government when it dumped what was called the National Energy Guarantee, which mandated emissions reduction targets and placed a reliability obligation on generators and retailers.

The Government's electricity and greenhouse emissions policy – in so much as it has one – now appears to have two key tenets and one central aim.

One tenet is to intervene in the electricity market to force down power prices, setting a January 1 deadline, when retailers must start offering lower default prices to consumers.

It's a step beyond the previous "policy", which consisted of threatening generators and retailers with a Royal Commission into the electricity industry if they don't drop power prices.

The second tenet is to express confidence that Australia will meet its to the Paris Agreement commitment to reduce emissions to around 26 per cent below 2005 levels.

Australian PM Scott Morrison Photo / Getty.
Australian PM Scott Morrison Photo / Getty.

This, despite not having any apparent policy on how this might actually be achieved.
The central aim of Prime Minister Scott Morrison's power policy is, of course, to try to win re-election next year.

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In reality, the Government has given up on having any sort of emissions reduction policy and business is filling the void.

Businesses are facing up to the reality of global warming and the inevitability they will have to find cleaner sources of power.

More and more pension funds are responding to demands from their members that they invest only in companies that aren't harming the environment and shun coal companies altogether.

Banks are also increasingly assessing the environmental impact of the companies they lend to.

It's not the first time business has filled a policy hole. Last year, we saw most of Australia's largest businesses publicly support – and in some cases campaign for – a "yes" vote in the gay marriage referendum.

Heading towards utopia

What a utopia we would live in, if governments stepped back and allowed business to get on with social, environmental and economic policies that would benefit us all.
But perhaps not.

As the recent interim report of the Banking Royal Commission revealed, the profit motive is still what drives business.

This on its own is no bad thing.

Turning a profit is what businesses are designed to do and it's why people invest in them.

Profits create jobs and wealth and provide governments with tax revenue to be used to the benefit of broader society.

(Or in the case of Scott Morrison's government, to underwrite the construction of coal-fired power stations and fund inquiries into making sure religious schools will be able to exclude students for being gay.)

But the picture painted by commissioner Kenneth Hayne is of an industry where making money overrode every moral and ethical consideration.

"All of the conduct identified and criticised in this report was conduct that provide a financial benefit to the individuals and entities concerned," Hayne wrote.

All of the banks' and insurance companies' dodgy conduct – charging dead people for service they didn't and couldn't receive, impersonating clients over the phone to discover their personal details, tricking vulnerable Aboriginal customers into buying expensive funeral insurance that sometimes didn't pay out – was down to their bonus systems.

The more product bank employees sold, the more money they earned.

Even when the banks tried to reform their bonus systems to supposedly incentivise staff to act in customers' interests, it often came down to sales.

For instance, ANZ paid bonuses according to how many "needs based conversations" they had with their customers as part of a review of their financial situation – which really is just another opportunity to sell them products.

Banks also paid a bonus based on the quality of the review, but on closer inspection, "quality" actually meant the percentage of reviews that led to sales.

It would be naïve to suggest that money won't remain most people's motivator when it comes to their jobs, but banks and other businesses need to rethink how they pay bonuses and what they pay them for, and use them to drive ethical behaviour among staff.