Several of Australia’s largest mining and energy companies are building their long-term business strategies around a future in which global temperatures rise well beyond 2°C, according to sustainability reports filed under Australia’s new mandatory climate disclosure rules. Researchers say the plans are misaligned with international science and with the country’s own legal obligations under the Paris Agreement.
Australia introduced mandatory company climate reporting last year, requiring large businesses to disclose the climate risks and opportunities that may affect their financial prospects. Analysis of the first wave of those disclosures shows a striking gap between corporate planning assumptions and scientific consensus. Rio Tinto’s central planning scenario assumes warming of 2.1–2.3°C by 2100, a figure that the company arrives at by assuming developing countries will miss or delay their own net-zero targets. BHP similarly expects global temperatures to exceed 2°C and, on that basis, forecasts robust demand for steelmaking coal for decades from customers in China, India and Southeast Asia — even though those same countries have stated net-zero commitments. Energy companies AGL and Origin Energy each express confidence that their business models will remain viable even if warming accelerates beyond 2.6°C.
Scientists warn that outcomes above 2°C would be severe. The Paris Agreement’s 1.5°C threshold was set following exhaustive scientific assessments concluding that higher warming would be dangerous and that limiting temperature rise to 1.5°C was necessary to minimise irreversible harm, including sea level rise, coral reef loss and polar ice depletion. Current scientific understanding holds that warming should not exceed 1.5°C by more than 0.1–0.3°C even temporarily, and that humanity must simultaneously work to bring temperatures back down. The longer warming stays above that threshold, the more damaging the consequences.
The legal and reputational stakes are rising for companies that plan around higher warming scenarios. In July 2025, the International Court of Justice confirmed that 1.5°C is the temperature limit countries are aiming for under the Paris Agreement and that governments are obliged to regulate domestic business emissions accordingly. Australia’s big companies collectively account for more than 30% of domestic emissions; when the fossil fuels some of them export are included, Australia’s global carbon footprint rises to around 4.5% of global fossil CO₂ emissions, second only to Russia. Australia is also serving as President of Negotiations for COP31 this year, a role that researchers say carries particular responsibility for demonstrating domestic climate ambition.
While there is currently no legal prohibition on companies using a planning baseline above 2°C, analysts warn that such approaches leave firms exposed to growing investor scrutiny and reputational damage if they are later forced to walk back climate commitments. For Australia to meet its international obligations — including the 62–70% emissions reduction target submitted in September 2025 — the government would need to use regulatory tools to bring large corporate emitters into line with the best available science.