
It's time for big companies to stop gambling with gas
WHY THIS CAMPAIGN
The big companies who make our food, build our homes, and provide our healthcare all remain at the whim of a volatile gas industry.
Yet most of the biggest ASX-listed companies don’t have a plan to switch away from using risky gas for their power and processes. Their failure is a threat to their customers, their business and their shareholders.
SIX’s Gambling with Gas report1 explores how ASX-listed companies are lagging behind their overseas and private competitors in planning their switch away from gas.
Together with our partners at Future Group, Ethical Investment Advisers, Ethinvest and UNLESS Financial, SIX is turning up the pressure on food company Bega Cheese Limited (ASX: BGA), building company Brickworks Limited (ASX: BKW) and bio-pharmaceutical company CSL Limited (ASX: CSL).
We’re urging these companies that supply our food, build our homes and provide our healthcare to stop gambling on gas and properly plan how they switch to clean, renewable energy.
PROBLEM
- Dirty games by a dirty industry: The gas industry is threatening gas shortages on the East Coast as early as 2027. This could be a dirty tactic to scare the government into opening up new gas; or it means an imminent threat to all companies who use gas to operate. Smart companies will have a plan to switch away from gas before the threatened shortages hit.
- Gas is volatile and expensive: Even the Future Gas Strategy Report acknowledges the gas industry is characterised by volatility, uncertainty and risk. Relying on gas is an unpredictable gamble; in the 2022 energy crisis, prices jumped from $5-6 to $50 per gigajoule2. This uncertainty causes problems for companies across three main areas: the efficiency of their processes, their business costs, and their emissions reductions targets.
- Relying on gas is a threat to shareholders: We can already see examples of being priced out by gas - like Advance Bricks, who shut down after a 600 per cent price spike3. If companies do not have clear, published plans for switching away from gas use, then the risk, uncertainty and related costs are passed on to their shareholders (and this includes almost all Australians, through their superannuation funds!)
- Gas is not a transition fuel: Through greenwashing from the fossil fuel industry, gas has been labeled as a transition fuel by industry. Gas cannot be a part of a clean energy transition. To limit global temperature rise and meet emission targets, we need to move away from all fossil fuels toward zero-emissions technology4.
- ASX-listed companies don’t have a plan: As shown in our Gambling with Gas report, ASX-listed companies are lacking plans to manage the transition and are being left behind their private competitors.
OPPORTUNITY
Companies need to show their investors how they plan to tackle the volatility and threats of gas shortages on their operations. Taking this proactive approach will have many benefits, including:
- Helping to increase the resilience of their business through reducing the reliance on gas.
- Meeting mandatory climate-related financial disclosures, and
- Reducing the risk that shareholders are currently holding.
TAKE ACTION NOW!
SIX needs shareholders to support this campaign!
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References
[1] SIX, Gambling with Gas report. https://www.six-invest.com.au/gambling-with-gas-report
[2] Australian Competition and Consumer Commission, 12 February 2022. "Gas prices increase as supply shortfall emerges for southern states". https://www.accc.gov.au/media-release/gas-prices-increase-as-supply-shortfall-emerges-for-southern-states
[3] Australian Financial Review, 20 June 2022. "Energy aid package for business on crisis agenda". https://www.afr.com/companies/energy/energy-aid-package-for-business-on-crisis-agenda-20220619-p5auv3
[4] The Australia Institute, 10 May 2024. "3 gas myths debunked". https://australiainstitute.org.au/post/3-gas-myths-debunked/
