As climate change emerges as the one of the key public and private policy issues for nations around the world, businesses that are slow off the mark in the sustainability stakes could find themselves lagging the field.
In ratifying the Kyoto Protocol, the Rudd Government has pledged its commitment to cutting Australia's greenhouse gas emissions by 60 per cent on 2000 levels by 2050. Australia becomes a full member of the Kyoto Protocol at the end of March 2008.
The Government is planning to introduce a number of measures to achieve these targets, including:
introducing a comprehensive emissions trading scheme by 2010
setting a 20 per cent target for renewable energy by 2020
establishing the Energy Innovation Fund for research and development into clean and renewable energy technology
Clean Business Australia - a partnership between business and industry to increase energy and water efficiency
With climate change firmly on the public agenda, integrating sustainable environmental practices into business activities will become a key issue for Australian companies over the next decade.
While companies will need to implement measures to comply with increasingly stringent environmental laws, they will also need to think about the positive role sound environmental practices play in attracting investors, customers and staff. In fact, failing to have an adequate environmental policy in place could impact your customer relationships particularly if you supply to large corporates.
Transparency - the key to a greener workplace
Transparency and disclosure of environmental business practices is becomingly a focus in both the public and private arenas. The National Greenhouse and Energy Reporting Act 2007 provides a mechanism for companies to report greenhouse gas emissions, reductions, removals and offsets, and energy consumption and production. From July this year, companies that emit more 125,000 kilotonnes of greenhouse gas or control facilities that emit 25 kilotonnes or more will need to register and report their emissions. These thresholds will reduce over the next three years.
The Carbon Disclosure Project (CDP) demonstrates how environmental sustainability disclosure is becoming increasingly important for investors. The CDP collects information on the environmental sustainability practices of participating companies on behalf of investors.
In 2007, ANZ was included in the Goldman Sachs JB Were Climate Disclosure Leadership Index for the second consecutive year, demonstrating leadership in disclosure to the investment community across a wide range of investment relevant climate change issues.
Business strategies for sustainability
While there are short-term costs involved in implementing greener business practices, they can be outweighed by longer-term benefits. For example, we can expect higher costs for traditional energy sources in years to come so investing in alternatives and implementing energy efficiencies now is likely to save money in the long run.
Of course, all businesses are different and it will be more cost and time intensive for some industries to adapt greener business practices than others. This is particularly true for high-energy consumers in manufacturing industries such as aluminium, steel, paper, petrochemical and cement businesses.
Contribution to total greenhouse gas emissions by sector, 2005
Source: Australian Government, Department of Climate Change
While developing and converting to carbon reducing technologies and renewable energy sources won't happen overnight, there are simple strategies businesses can adopt now to improve sustainability. For example, making environmental policy a consideration when choosing suppliers is a simple but often overlooked strategy.
In coming issues, inBusiness will explore the benefits, costs and processes of implementing a sustainable business policy. We will also investigate the resources available to help businesses develop and implement their policies.
Useful links
For more information on climate change and sustainable workplaces visit one of the sites below:
Issue 54 - Winter 2008
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