Fiduciary Responsibility: Does the Environment Rank Higher Than Returns?

Are the companies you’re pitching climate solutions to rejecting them by claiming 💰 profit comes first? I often hear from people that “environmental work is nice, but a director has a responsibility to provide returns.” Yes, it’s true, but that is not the only thing they are responsible for and definitely not the first thing.

A quick test: would this be ok?

❌ “Yes, we put a product out that killed hundreds of people, but we made a great return for investors.”

❌ “We had to pay a $1m bribe but we got a $100m profit so it was worth it in the end.”

❌ “Good news: We made a $1B return on our new business, and saved a lot of money by pouring the by-product into the ocean.”

Obviously those examples would not be acceptable, so what is the difference with contributions to climate change? 🌎

I’m 1.5 units away from completing my Masters of Sustainable Development 📚 at Macquarie University and my current unit is Environmental Law ⚖️. We’ve been looking at the Paris Agreement and what it actually requires countries to do. The answer: Not much. They have to set targets 🎯 and report them every 5 years but there is nothing to make those targets ambitious other than a request and a lot of hope.

What the Paris Agreement has done well is provide a starting point 🏁 and direction for countries who trade with each other (which is most of them) to keep doing better and better. This is also what is referred to as a soft law, but the outcome has been actual legislation 📜 in many countries at least regarding reporting and with many consequences for climate-negative behavior.

Through legislation, these responsibilities have mostly been initially targeted towards the largest companies 🏢. The EU 🇪🇺, UK 🇬🇧, Singapore 🇸🇬, Canada 🇨🇦 and many others require full scope reporting. The US 🇺🇸 also has reporting federally though it is currently in limbo so looking state by state is required.

After reporting is charging a fee. I really don’t like the term carbon tax ❌💨, not just because everyone hates a tax, but it’s like it’s a penalty for doing something wrong, rather than just the price you should pay for normal operations. If carbon pricing were seen as a standard business cost, like labor or materials 💼, companies would integrate sustainability proactively rather than treating it as a burden. This shift drives innovation 🚀 in regulated markets, while others lag, slowing global climate progress. Of course, the issue is that many countries have a voluntary price, but not a mandatory one. It’s also not just about carbon… (Rant over… 😅).

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📌 What this information should give you is similar to what the Paris Agreement does - a place to start and some hope.

Throughout my life, working with 1,000’s of entrepreneurs, I would have said ‘never rely on the government to help your business, it’s too slow and out of your influence.’ With climate solutions I’d say if you can go straight to an economic benefit 💲, then just go there. But for many companies, it’s not a level playing field. With 100 years of innovation and development on their side, it’s next to impossible to compete against an incumbent without some support from regulation to provide a fair opportunity ⚖️.

What I’ve learned is that there is already significant regulation in place and more is coming ⏳. The visible and real impacts of climate change are hitting governments in multiple ways 🌪️🔥🌊, and this makes it much more likely for citizens to demand change and for governments to enact new laws.

So how do you use this?

✅ Firstly, don’t rely on it and don’t wait. Keep improving your products so that your economic benefit gets clearer and bigger 📈. This is going to drive the real boom (coming in 2027 I think/hope 🤞).

✅ Secondly, it means more research (sorry 😬). Just targeting a big market like the US is not the easy answer it used to be. You may have to look deeper into the existing systems and what is coming into play soon to find advantages. The special opportunities are when the regulation is pushing individual companies to look for new solutions and this could be an American company, manufacturing in Vietnam 🇻🇳 and exporting to the EU 🇪🇺. It’s more complicated but that’s the job.

✅ Finally, it means you’ll need more help. You won’t be able to do this alone. No one can.

🤖 I actually see AI playing a huge role here. How do you navigate a dozen different regulatory systems which are changing constantly? How do you do that across a supply chain? How do you implement a new battery chemistry at scale? AI in every team member’s hands is going to speed up and unlock complex activities.

📢 I also see help from specialist advisory teams. Companies like Pollination with a global network 🌍 and deep expertise can help companies scale. We’ll also need that across R&D, tax, HR and more.

🏭 Incumbents will also play a big role here. Even though many of them could have done a lot more, faster to avoid this climate mess, I don’t think we can get to a nature positive world without them. They have industry, infrastructure, and operations skills at scale, so partnering with them will be needed by many companies to achieve your full potential.

💡 Plus, you have each other. There are 700+ climate tech companies in Australia 🇦🇺 and 7,000 around the world 🌎. I know some of you are competing which is healthy but you’re also after the same outcome. I know it’s scary at times and you might be worried about not having all the answers but please know that no one does. Ask for help and you’ll get it. I promise you.

So while directors need to produce a return, they need to do it by following the regulations 📜 of all the jurisdictions they operate including powering, growing, making, moving, cooling, selling, hiring, and insuring.

Your product is improving every day and so is the regulation requiring all companies to take real action.

🚀 Keep going. We’re breaking through.

Photo by Towfiqu barbhuiya on Unsplash