Some of Australia's biggest companies are planning for an unbearable climate future

Australia’s largest corporations are preparing for a future marked by extreme climate conditions, despite growing scientific consensus that limiting global warming to 1.5 degrees Celsius is essential to avoid catastrophic environmental consequences. As wildfires and record-breaking heatwaves sweep across Europe, and a powerful El Niño system looms, some of the country’s leading energy and resource firms are basing their long-term strategies on projections of more than 2 degrees Celsius of warming by the end of the century. These forecasts, outlined in recent sustainability reports, suggest a divergence between corporate planning and the goals set forth in the Paris Agreement. The shift comes amid a new regulatory requirement in Australia mandating that large companies disclose climate-related risks and opportunities as part of their annual reporting. Since last year, several of the nation’s top energy and mining firms, including Rio Tinto, BHP, AGL, and Origin Energy, have released detailed sustainability reports. These documents outline the assumptions each company uses to model future climate scenarios, revealing a common trend: many are operating under the premise that global temperatures will rise significantly beyond the 1.5°C target established by international agreements. According to the reports, Rio Tinto and BHP anticipate global warming reaching more than 2°C by 2100. AGL and Origin Energy, two major energy providers, have expressed confidence that their business models will remain viable even under a scenario where warming could reach 2.6°C. Such projections, however, contradict the findings of climate scientists who warn that exceeding 1.5°C will lead to severe ecological and societal impacts, including widespread biodiversity loss, intensified weather extremes, and rising sea levels. The discrepancy between corporate planning and scientific recommendations is particularly evident in the assumptions made by mining giants. BHP, for instance, predicts sustained demand for steelmaking coal from key markets such as China, India, and Southeast Asia. This expectation supports continued production of coal, a fossil fuel directly linked to greenhouse gas emissions. Similarly, Rio Tinto has confirmed that it sees no need to adjust its production plans, assuming that developing nations will either fail to meet or delay their net-zero emission commitments. This outlook allows the company to maintain current operations without significant modifications. Climate experts emphasize that the assumption of business-as-usual in a warmer world is increasingly at odds with the latest scientific research. The Paris Agreement, adopted in 2015, was grounded in extensive studies showing that warming beyond 2°C poses serious threats to ecosystems and human societies. Recent advancements in climate modeling reinforce the urgency of keeping global temperatures within the 1.5°C limit, allowing only temporary overshoot before efforts are made to reduce them again. Exceeding this threshold for extended periods increases the likelihood of irreversible damage, such as the collapse of marine ecosystems and accelerated polar ice melt. Despite the growing body of evidence highlighting the risks associated with higher warming levels, many corporations continue to operate under scenarios that assume greater temperature rises. While there is no legal barrier preventing companies from using these projections for strategic planning, the alignment, or lack thereof, between corporate strategies and national and international climate objectives raises concerns among policymakers and environmental advocates. The situation underscores the complex interplay between economic interests and climate action. While governments bear responsibility for setting regulatory frameworks, corporations wield considerable influence over the trajectory of climate outcomes through their investment and operational choices. As Australia continues to grapple with the dual challenge of economic growth and environmental stewardship, the gap between corporate planning and scientific guidance remains a critical area of focus for regulators and climate scientists alike.