Few businesses reporting emission liabilities to owners
Tuesday 30 September 2008, 7:11AM
By New Zealand Business Council for Sustainable Development
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New research shows only seven out of every 100 firms have measured their greenhouse gas emissions.
CEOs, boards and shareholders are not being told about risks to the business. The sectors facing the biggest bills from the price on carbon – and the opportunities to cut or avoid them – seem to be poorly prepared.
These results are revealed in a September 10 to 11 nationwide ShapeNZ survey of 2455 respondents. The survey has a maximum margin of error of plus or minus 2% on the national sample. It was commissioned by the New Zealand Business Council for Sustainable Development.
Business Council chair Nick Main, also chair of Deloitte, says the results are of concern.
Most affected by the coming price on carbon will be energy intensive manufacturing, the primary sector (agriculture, forestry and fishing) and transport.
But the ShapeNZ results show:
• 38% of respondents in manufacturing, 43% in the primary sector and 22% in transport or storage know they will be affected by the mandatory emissions trading scheme, yet
• emissions have been measured by only 21% in manufacturing, 5% in agriculture, forestry and fishing, and 8% in transport.
Only 15% in manufacturing have had their emission measurements assured by an independent expert third party, 5% in the primary sector and 7% in transport.
Only 37% in manufacturing are developing an emissions reduction plan. Even fewer have done so in the country's highest-emission sectors, the primary sector (9%) and transport (7%).
Only 12% or fewer in the three sectors have already implemented an emissions reduction plan.
Regular reports are not being prepared for chief executives, boards or shareholders.
Only 2% of CEOs in manufacturing are getting regular reports on their organisations' emissions status and liabilities, 6% in the primary sectors and 5% in transport.
All but 16% of directors in manufacturing, 6% in primary industry and 2% in transport are not being informed on their status and liabilities, and reports are being prepared regularly for only 14% of shareholders in manufacturing, and 7% in each of primary and transport sectors.
In Australia in July an Australian Institute of Management survey of 288 executives found that 80% knew "very little" or were only "somewhat aware" of the emissions trading scheme. Most Australian businesses had done no planning for an emissions trading scheme and only a third were aware, a November study by PricewaterhouseCoopers found.
A November 2007 PricewaterhouseCoopers survey of more than 300 Australian chief executives found that 75% of businesses had not formally assessed the risk of climate change, and only 2% had recorded emissions data they believed would stand up to scrutiny. As many as 36% had no data on their business' emissions.
An analysis of 527 business decision maker respondents to the ShapeNZ survey shows 41% agree with emissions trading (21% are neutral and 32% disagree), but only 14% say they feel "well informed", and only 11% say their organisation has measured emissions.
Mr Main says emissions pricing gives New Zealand businesses, and households, an incentive to measure and cut emissions and costs, redirect investment, introduce new low-carbon technology, innovate and protect our trading position as the world moves to a low-carbon economy.
"What the new research shows is a major gap in knowledge, and a big need for all businesses to start measuring emissions, verifying them, developing plans to reduce them – and to report results to owners," Mr Main says.
"Companies can be exposed to real risks if they don't measure and report emissions and implement plans to protect or boost the bottom line through emissions reduction strategies."
Results of the ShapeNZ survey are available at http://www.nzbcsd.org.nz/admin/StoryEdit.asp?StoryID=940
The Business Council has launched a new free online guide advising businesses on how to calculate and cut emissions and lift profits. Online at http://www.nzbcsd.org.nz/emissions/content.asp?id=432 , the guide includes a comprehensive emissions calculator. It allows users to save and download data and is aimed at helping executives put emissions reduction on the agenda within their organisations.