Climate Adaptation

Climate Adaptation Future Proofing Your Business Against Today’s Carbon Constrained Business Conditions ‘ Australian Context’ October 2008 The material contained in this presentation is for information purposes only and does not constitute advice or guidance that should pursued without first obtaining specific expert opinion

Scientific evidence is proving our climate is changing because of our industrial activity ,[object Object],Charles Darwin

Immediate corrective actions to reduce GHG emissions are required to avoid rises to global atmospheric temperatures Source: Stern Report (2007) Global Warming is acknowledged by reputable international organisations, including the IPCC as the most significant risk to environmental stability and therefore economic, political & social stability yet faced

Fast Facts - C0 2 Emissions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Co2 emissions are an unavoidable by-product of the lives we lead, but by being Co2 aware we are in a position to start reducing our footprints Awareness amongst the community about what activities contribute significantly to carbon emissions is still very low Australia has the highest per capita emissions in the world!

Under Government policy Australia is now committed to action climate change through C0 2 abatement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],By ratifying the Kyoto protocol Australia has now formerly committed to meeting its emission targets and through the emissions reporting legislation industry & business is now committed to playing its part in its achievement Policy Objectives The governments action plan for addressing climate change focuses on 3 key areas: ,[object Object],[object Object],[object Object]

Through the Federal Government action plan business must now comply with energy & emissions reporting ,[object Object],[object Object],[object Object],[object Object],[object Object],As a part of the strategy to systematically manage & reduce GHG emissions Australian business is being regulated into strict carbon reporting compliance standards through the introduction of national reporting legislation Business must now take ownership & responsibility for its CO2 emissions & energy consumption Business can’t ignore energy efficiency improvements or better work practices without risk Business can’t simply use offset programs as an easy out to make C02 emissions ‘someone else’s problem’ Goal: change the inherent behaviours of firms lax attitude toward C0 2 emissions & energy consumption by making it an unavoidable cost of business The NGER legislation is designed to support Australia achieve its emissions targets by forcing businesses to: Outcomes:

National Greenhouse & Energy Reporting Act 2007 ,[object Object],The NGER Act came into effect on 1 st July 2008 to enable the effective and comprehensive capture of emissions data across industry The NGER Act establishes a national framework for Australian firms to report greenhouse gas emissions, reductions, removals and offsets, and energy consumption and production Purpose Objectives ,[object Object],[object Object],[object Object],[object Object],[object Object]

What emissions must be reported under NGER? ,[object Object],[object Object],[object Object],[object Object],[object Object],Mandatory to Report under current NGER Act NGER GHG Protocol Emission Scope 1, 2 & 3 Source: GHG Protocol ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Emissions Classifications & Sources Contributes more than 2/3 of a firms GHG emissions Q: When will scope 3 be included in mandatory reporting? Emissions have been classified into 3 categories and under the current NGER legislation firms must report on emissions that fall into Scope 1 or Scope 2 Reporting not mandatory but Can you risk not having a handle on your C0 2 if the NGER rules change? Watch point:

What are the NGER Reporting Thresholds? GHG and Energy reporting is mandatory for firms that exceed thresholds that are dictated by the schedule 1July 2008 marked the start of mandatory reporting for threshold affected firms Reporting Obligations ,[object Object],[object Object],Source: NGER Policy Paper NGER Thresholds & Reporting Timeline ,[object Object],Don’t get caught out, make sure you know if & when you are going to be affected

Do I need to be concerned by NGER Reporting? In the first period it will be the larger firms who are required to report C0 2 emissions, many more businesses will be caught in consecutive periods as the thresholds tighten ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],What could change your reporting obligations? What activities emit 25kt-C0 2 ? Its important to know what activity ‘multiples’ your business operates on Don’t leave your C0 2 reporting liability to chance, know the facts about your firms carbon footprint and begin managing it today

Scope 3 Emissions – the big sleeper risk for business ,[object Object],While firms could be at risk from changes in NGER legislation to adopt scope 3 emission reporting, a more immediate threat exists in the form B2C & B2B customers who chose only to do business with supply chain accountable firms Source: NoC0 2 Emissions Contributions by Scope for IKEA & DHL Express Are you prepared to risk your preferred supplier arrangements with established customers? 470,511 (100%) 440,095 (94%) 4,969 (1%) 25,447 (5%) DHL Express Nordic 2,808,424 (100%) 2,306,592 (82%) 421,142 (15%) 80,692 (3%) IKEA TOTAL SCOPE 3 SCOPE 2 SCOPE 1 COMPANY IKEA’S AND DHL EXPRESS NORDIC’S 2004 GHG EMISSIONS (metric tons CO2) More than ¾ of a firms emissions are contributed from Scope 3 activities

Strict Penalties for Non Compliance Penalties of up to $220,000 apply to those who fail to comply, with additional overdue daily penalties and criminal charges for Directors found to be negligent Are you prepared to risk significant business and personal penalties?

NGER Compliance Administration & Policing ,[object Object],[object Object],[object Object],In the same way that financial audits are completed by accredited audit professionals, compliance to NGER legislation will be conducted by approved NGER auditors

Beyond Regulatory Compliance Risks ,[object Object],Though an immediate tangible risk faced by business is reporting non-compliance, the risk portfolio extends into other areas, coupled with tangible business opportunities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Risks Business Opportunities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Effectively Responding to the Management of Carbon within Business Adopting a Carbon Management Process

Employ a Carbon Management Process By adopting a carbon management process, supporting systems and policies a business can de-risk its C0 2 footprint as well as position for new opportunities Continuous Management Supported by C0 2 mitigation strategies and SMART action plans Process Activities ABATE OFFSET IDENTIFY REDUCE ELIMINATE Efficiency and business practice and operations process improvements Quick Wins Reduce Purchase verified carbon offsets certified from a legitimate offset program e.g. GreenHouse Friendly™ Offset Innovation in work practices including radical business process re-engineering, new facilities design, adoption of clean technology Abate New work practices, business processes, systems and more energy efficient machinery Redefine & Improve Eliminate Calculate, monitor, manage, report Select a C02 calculation methodology Baseline your business C02 emissions Identify

Where are the reduction and elimination opportunities? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],There are a number of changed business practices that can be quickly and easily adopted by your firm that will reduce your energy and C0 2 footprint

Some Energy Saving Examples: Supermarket & Factory ,[object Object],Fresh Choice, Greymouth (NZ), has reduced its energy costs by 30 per cent - saving approximately $60,000 per annum. Significantly, the supermarket's savings were achieved with no capital investment , but through targeted actions , including; reducing lighting levels, modifying air conditioning timers, rescheduling the start up of ovens and other equipment to reduce peak demand, adjusting air conditioning set points to avoid over-cooling in summer and over warming in winter, and keeping roller doors closed in air conditioned spaces and inwards goods areas

At the end of the day carbon management makes good business sense ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],A well constructed Carbon Management Response plan will deliver value to your business and secure its future sustainability & prosperity ,[object Object],[object Object],[object Object],[object Object],[object Object],Value Generation Productivity Improvements + Cost Competitiveness + Low Risk Investments Business Benefits

Immediate Steps for future proofing your business ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Assess your responsibility and take action or get help from local advisors to ease the burden so you can focus on your business There are some immediate actions you can start to begin addressing C02 in your business

The Time to Act is Now “ Companies that manage and mitigate their exposure to climate-change risks while seeking new opportunities for profit will have a competitive advantage in a carbon-constrained future” Source: HBR, 2007

More Information Thank you for attending today's presentation on Climate Adaptation Rob is very happy to receive any specific questions you may have on the management of carbon risks & opportunities in your business Rob Nicholls Director 0403 806 779 [email_address] [email_address] www.carbonsolutions.blogspot.com www.carbontraininginternational.com cti delivers training and coaching programs that contribute to the creation of a carbon skilled, carbon conscious & carbon responsive workforce

Climate Adaptation

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