Posts Tagged ‘asx200’
Recent research by UK-based Ethical Investment Research Services (EIRIS) and their Australian affiliate, the Centre for Australian Ethical Research (CAER), suggests that Australian big business is lagging far behind it’s global counterparts when it comes to climate change response.
The research analysed the responses of 300 of the world’s largest companies against 24 key climate change criteria and compared them to the responses from S&P/ASX200 companies. Almost across the board S&P/ASX200 members trailed behind Global 300 companies in areas of climate change response that spanned governance, strategy, performance and disclosure.
Whilst the report is worth reading in it’s entirity, some of findings are worth particular mention because, in the our opinion, they suggest a clear lack of preparedness by many of Australia’s largest companies to address the business challenges of climate change and carbon pricing.
Many high risk companies still unprepared
The CAER survey found that almost half (48% compared with 35% for Global 300) of S&P/ASX200 companies — representing over AUD 545 billion market cap — were classified as being at high or very high risk of impact of climate change and of those companies over one third (24% for Global 300) had no (or only a limited) climate change strategy in place.
Reporting still limited and mostly unverified
Of the companies most likely to be affected by climate change only two fifths (73% for Global 300) were reporting emissions data and only about one in ten (11% compared with 36% for Global 300) had those reports externally verified.
Reporting is the first and most obvious step to be taken by any organisation hoping to understand and ulitmately reduce it’s GHG emissions footprint - afterall if you can’t measure it you can’t manage it.
Companies should be establishing data collection and reporting practices now that will guide their carbon management strategy. With the NGER Act now in force, large greenhouse-gas emitters are required by law to report annually, with significant penalties in place for non-compliance. The research suggest, at least anacdotally, that some large organisations in Australia may not be in a position to meet their legal obligations.
Lack of targets. Lack of long term strategy
Only 13% (48% for Global 300) of high risk companies disclose, either publicly or internally, short-term (defined in the survey as less than five years) GHG emission targets and a mere 9% (25% for Global 300) have set longer term reduction targets.
This is hardly a surprise given the low levels of reporting, but the lack of long term targets can presumably be taken as further evidence of lack of a carbon management strategy.
Our experiences
We’ve found a general perception that the ‘big end of town’ is in control of the risks and opportunities of climate change and that it’s an area they’re actively managing. This research certainly provides strong evidence to the contrary.
We’ve personally found that businesses subject to NGER, and previously EEO, are making relatively good progress on meeting compliance requirements. However we haven’t seen as much action on preparation for caps on emissions and the trading scheme, which could be implemented as soon as 2010. In very few cases have we seen a strategic or holistic response to climate change or one that seeks to find opportunities in the changes that are underway.
This research makes it clear that Australian business is responding too slowly to the challenges of climate change and that more action is required.
