Sydney, April 16, 2007 AEST (ABN Newswire) - In the lead up to their meeting on Friday, the Australian investment community, led by the Investor Group on Climate Change Australia/New Zealand, is calling on the Council of Australian Governments (COAG) to accelerate progress on the implementation of mandatory reporting of greenhouse gas emissions by Australian companies.
The Investor Group on Climate Change Australia/New Zealand (IGCC) represents institutional investors with total funds under management of over A$225 billion, and others in the investment community interested in the impact of climate change on investments. 'IGCC supports mandatory reporting of energy and greenhouse by business, however we also support a regulatory mechanism that is flexible and allows companies to report their climate change risks and opportunities consistent with international disclosure initiatives.' stated, VicSuper CEO and Chair, IGCC Mr Bob Welsh.
Investors require access to information on companies greenhouse gas emissions as well as their climate change management and mitigation strategies to ensure that the business risks and opportunities associated with climate change are incorporated into investment decisions. 'It is clear that climate change will impact the earnings of companies in our investment universe and these impacts, both positive and negative, need to be included as part of our mainstream investment analysis' commented Ms Amanda McCluskey, Sustainability Manager, Portfolio Partners and Deputy Chair, IGCC.
Adequate and accurate accounting and reporting of greenhouse gas emissions by Australian companies is also a vital precursor to any emissions trading scheme in Australian. According to Mr Welsh, "the business and investment community is united in its call for the introduction of an emissions trading scheme in Australia. Such a scheme, however, is contingent upon a clear and consistent framework for accounting and reporting of greenhouse gas inventories being in place. Further delays in the establishment of such a framework at the national level will result in increased investor uncertainty, leading to renewed support for the States and Territories to fast-track the introduction of mandatory reporting through a variation to the National Pollutant Inventory, which is already in place for the reporting of emissions to the environment by companies."
Investors are already calling on companies to voluntarily report In partnership with the Carbon Disclosure Project (CDP), the IGCC and Goldman Sachs JB Were are currently requesting investment relevant climate change information from ASX100 and NZX50 companies.
The CDP is a collaboration of over 280 institutional investors with funds under management of over US$41 trillion. The CDP represents an efficient process whereby these investors collectively sign a single request for disclosure of information on companies' greenhouse gas emissions and climate change strategy. The CDP request is currently sent to almost 3000 of the world's largest companies.
In addition, through the International Climate Risk Disclosure Framework (CRDF) the investment community has clearly articulated the disclosure expected from companies in relation to climate change. The CRDF was developed by investors globally through the Institutional Investor Group on Climate Change (UK), the Investor Network on Climate Risk (US) and IGCC.
Both the CDP and the CRDF are based on the international standard Greenhouse Gas Protocol -- Corporate Accounting and Reporting Standard, developed by the World Business Council for Sustainable Development and the World Resources Institute. Consistency with international standards key Australian investors encourage COAG to implement mandatory reporting of greenhouse gas emissions by Australian companies based on the Greenhouse Gas Protocol. This would ensure consistency with existing company energy and greenhouse reporting under the CDP, CRDF as well as the Global Reporting Initiative.
Ms McCluskey highlighted that, 'failure to establish mandatory reporting requirements that take these international disclosure standards and initiatives into consideration will result in additional and onerous, rather than streamlined, reporting requirements for Australian companies and greater uncertainty and confusion in the investment community.' Importantly, consistency with the Greenhouse Gas Protocol will facilitate the future international harmonisation of domestic emissions trading schemes.
The development of an emissions trading scheme for Australia, whether international or domestic in scope, needs to be cognisant of the basis for greenhouse gas accounting and trading at the international level' stated Mr Welsh.