MAGAZINE - Realview

SUSTAINABILITY
Stuck in second
on carbon scheme
Although many local organisations are starting to prepare for
the inevitability of a carbon-constrained economy, it seems
that for most it is still an uphill battle.
While Australian businesses are beginning
the journey of adapting to emerging
carbon constraints, the downside
is that there is a real lack of understanding
about the proposed Carbon
Pollution Reduction Scheme (CPRS) and a worrying surge
in regulation associated with greenhouse gas emissions.
These are the overriding findings in a national survey
into business readiness for climate change conducted by
the Australian Industry Group (Ai Group) and KPMG,
titled Gearing Up: Business Readiness for Climate
Change. Based on responses from 400 businesses in the
manufacturing, construction and services sector, it examines
what stage they are at in adapting to emerging carbon
constraints, how well they are prepared for the
introduction of a national emissions trading scheme and
the extent of regulatory burdens in the area.
“There are plenty of very encouraging signs that businesses
have begun to take active steps to measure and
manage their carbon footprints,” says Ai Group chief
executive Heather Ridout. “Businesses also have strong
plans to take these initial steps further over the coming
few years.”
However, the survey also points to some significant
problem areas.
“Businesses are not yet well informed about the Commonwealth
Government’s proposed CPRS,” she acknowledges.
“While some have a very good understanding of
the key elements of the proposal, this is far from widespread.
There is clearly a great deal more that needs to
be done before we can assume business is adequately
prepared for the scheme and its impacts.”
According to KPMG national partner in charge of
Sustainability, Climate Change and Water, Jennifer Westacott,
the firm’s work with clients in this space has
shown time and again that the complexity and practical
challenges of being ready to respond to big regulatory
and economic change cannot be underestimated.
“One of the
biggest concerns
for business is
the disturbing
proliferation
of regulatory
measures
in the climate
change area in
recent times
– and the strong
expectation of
more to come”
“It is essential for business to move beyond a simple
compliance focus to a comprehensive business strategy
that creates value and competitive advantage,” she maintains.
“While some companies are leading the way and
making good progress, there is much work to be done.
It is critical that government and business factor in realistic
lead times for all sectors of the Australian economy
to be ready for this significant change.”
One of the biggest concerns for business is the disturbing
proliferation of regulatory measures in the climate
change area in recent times – and the strong expectation
of more to come. Notwithstanding some promising initial
comments by the Commonwealth Government, as Ridout
notes, there is yet to be any significant streamlining of
regulation concerning greenhouse gas emissions.
“These findings accord with a recent report by the
Productivity Commission in which it counted no less
than 244 regulatory measures related to greenhouse gas
emissions administered by 56 different agencies,” she
says. “This is emerging as a major failure of policy in
Australia. The Government needs to put right at the top
of the policy agenda a plan with clearly defined targets
aimed at getting rid of unnecessary and productivitydamaging
climate change regulations.”
26 RISK August 2009