Even as unprecedented fires and heatwaves rage across Europe , scientists track the retreat of Antarctic sea ice and a supercharged El Niño system heads our way, Australia’s largest companies are forecasting business-as-usual in a much hotter world.
Authors
- Jacqueline Peel
Professor of Law, The University of Melbourne
- Nina Araneta-Alana
Research fellow, Laureate Program on Global Corporate Climate Accountability, The University of Melbourne
- Suzanne Varrall
Research Fellow, Laureate Program on Global Corporate Climate Accountability, The University of Melbourne
Last year, Australia introduced mandatory company climate reporting . They must now disclose the climate ” risks and opportunities ” that may affect their prospects.
Several of Australia’s biggest energy and resource companies have now published new sustainability reports as part of annual financial reporting.
Their disclosures reveal the climate future they are planning for, and whether this is aligned with international science-based targets such as the Paris Agreement’s 1.5°C warming threshold .
What we’re seeing is alarming.
Companies planning for an unbearable future
Most of these reports indicate big companies are developing strategies on a climate change “base case” – a representation of what they consider most likely to happen – of more than 2°C of warming. The future temperature rise they’re planning for is one scientists say would deliver an unbearably hot planet .
Some of Australia’s largest miners have followed this approach. Both Rio Tinto and BHP expect global temperature increases of more than 2°C by the end of the century.
Not every company reveals the increase in global temperature they are planning for. But even if they don’t, their disclosures show they’re not expecting temperatures to hold to 1.5°C.
Energy companies AGL and Origin Energy both express confidence their strategies and business models will remain robust, even if temperatures accelerate beyond 2.6°C warming. This increase would put the Australian economy, environment and community at severe risk .
Companies hold power
Companies often argue that governments are responsible for creating policy to address global warming. But this underestimates the power corporate leaders hold to shape Australia’s shared climate future through financial decisions.
For example, mining giant BHP expects demand for steelmaking coal to remain robust for decades, with customers from China, India and Southeast Asia. This underpins the valuation of its major export commodities, and appears to justify the lack of plans to scale down steelmaking coal production. However, this assumption sits uneasily with the fact these same countries have their own net-zero targets .
Similarly, Rio Tinto confirms ” no portfolio adjustments ” are made to its future production plans. Its central case estimate of 2.1-2.3°C of warming by 2100 assumes developing countries will miss or delay their stated net-zero targets, underwriting business-as-usual production for the company.
Disclosures out of step with science
However, the assumption that business-as-usual will be possible in a hotter world is out of step with the latest science. The Paris Agreement’s temperature goal was set in 2015 based on exhaustive scientific assessments that warming of more than 2°C would be dangerous, and limiting warming to 1.5°C was necessary to minimise climate risks.
Scientific knowledge about how much global warming is “safe” has exponentially increased . It reemphasises the need to keep to 1.5°C with ” limited overshoot “. This means we can only exceed 1.5°C temporarily, and simultaneously need to be working to bring temperatures back down. Only then will we minimise irreversible changes such as sea level rise, the disappearance of coral reefs or vast sea ice loss at the poles.
Scientific best estimates find we can’t go over 1.5°C by more than 0.1-0.3°C (a “peak temperature” of 1.6-1.8°C) and still return warming to safe levels. Even then, the longer we stay above 1.5°C and the extent to which we exceed this threshold, the more devastating the outcome.
Is this legal?
Legally, there’s no issue with companies using a base case for planning that exceeds 2°C of warming. But this approach isn’t in line with Australia’s broader international legal obligations. Companies will likely face increased investor scrutiny or reputational blowback when they walk back climate commitments.
In July 2025, the world’s highest court, the International Court of Justice (ICJ), confirmed 1.5°C is the temperature limit countries are aiming for. To meet their Paris Agreement promises, governments – including Australia – have to show the most ambitious action the country can realistically take to help keep warming under 1.5°C. Australia’s latest plan for a 62-70% emissions cut from 2005 levels was submitted in September 2025.
The court confirmed the Paris Agreement also requires governments to take action at home to cut emissions in line with the 1.5°C goal – including introducing rules for businesses operating in their countries. To follow international law, the Australian government needs to use every tool available to regulate the emissions of big companies, based on the best available science. Countries that don’t comply could be sued before the ICJ and ordered to pay compensation to other nations.
What about Australia’s climate policy?
Big companies in Australia contribute more than 30% of our domestic emissions. If we also include emissions from the fossil fuels some of these companies produce, it raises Australia’s global carbon footprint to around 4.5% of global fossil carbon dioxide emissions , second only to Russia. Making sure big companies do their bit to reduce emissions is essential for Australia to meet its climate targets.
This year, Australia is the “President of Negotiations” for COP31 . This is an opportunity for Australia to show it’s doing all it can – internationally and in its own backyard – to support compliance with the Paris Agreement and accelerate climate action. From their new disclosures, it doesn’t seem that Australia’s biggest companies have got the memo.
