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Climate Adaptation - Preparing your organisation for the low carbon economy

Climate Adaptation - Preparing your organisation for the low carbon economy

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Climate Adaptation Climate Adaptation Presentation Transcript

  • 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
    • “ Its not the strongest species that survives, nor the most intelligent, but the one most adaptable to change”
    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
    • A medium size car emits nearly 4.5 t-C0 2 per year
    • Each Australian is emitting approx. 23 t-C0 2 per year
    • The average household produces the equivalent of 20 t-C0 2 per year
    • A return flight from Sydney to Europe or USA will produce approx. 9 t-C0 2 per person.
    • One tonne of inorganic waste (plastics, metals, glass) in landfill contains the equivalent of 9.5 tonnes of C0 2
    • Leaving a computer and a monitor on for a whole year requires the same amount of energy as is produced by burning 500kg of coal and produces more than 1000kg of C0 2 .
    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
    • Dec07 new Federal Government Ratifies the Kyoto Protocol in Bali and in so doing formally commits Australia to enforceable Greenhouse Gas reduction targets
    • Rudd commissions Prof. Ross Garnaut to undertake an extensive review of emissions & abatement targets to assist in the technical design of the Australian Emissions Trading Scheme (AETS)
    • Rudd government announces that the AETS will commence operating in 2010, 1 year ahead of original schedule
    • Rudd government lifts Renewable Energy Targets to 20% by 2020
    • National Greenhouse & Energy Reporting (NGERS) comes into effect on 1 st July 2008
    • 16 th July08 Federal Government releases its Green Paper on the planned design of the AETS / CPRS for public review & comment
    • 30 th September08 Prof Ross Garnaut releases his final report & recommendation that Australia adopt an emissions reduction target of 10% on 2000 levels by 2020– implies a carbon price of $20 C0 2 -e tonne
    • 30 th October08 Federal Treasury releases its economic modelling into the effects of the AETS under 4 scenarios
    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:
    • Mitigation
    • Adaptation
    • Global Solution
  • Through the Federal Government action plan business must now comply with energy & emissions reporting
    • Comply with Carbon Emission thresholds or face significant financial penalties & legal claims
    • Proactively manage and continuously disclose its C0 2 & Energy Consumption
    • Adopt C0 2 reduction, elimination and abatement strategies
    • Look toward utilising certified C0 2 Offset programs
    • Look to investing in new technology that supports lower C0 2 emissions
    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
    • The NGER Act has committed business to monitoring the C0 2 emissions over which it is directly responsible and in doing so forced business down the path of managing & modifying its carbon intensive business practices and processes
    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
    • Cutting red tape for business by reducing the number of reports to government and eliminating duplication across existing State, Territory and national schemes
    • Providing robust data as a foundation for an Australian Emissions Trading Scheme
    • Facilitating reporting of abatement and offsets prior to commencement of emissions trading.
    • Providing company level information to the public on greenhouse and energy performance
    • Creating a single online entry point for reporting
  • What emissions must be reported under NGER?
    • Scope 1 - Direct
    • Fuel Combustion
    • Company Owned Vehicles
    • Scope 2 - Indirect
    • Purchased Electricity for own use
    Mandatory to Report under current NGER Act NGER GHG Protocol Emission Scope 1, 2 & 3 Source: GHG Protocol
    • Scope 3 - Indirect
    • Contractor Vehicles
    • Employee Business Travel
    • Outsourced Activities
    • Production of purchased materials
    • Waste Disposal
    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
    • The threshold limits for firms become progressively tighter over a 3 year period increasing the number of businesses who fall into the net
    • Under the NGER Act, strict thresholds have been put in place for a firms aggregate emissions as well the separate facilities over which it has operational control
    Source: NGER Policy Paper NGER Thresholds & Reporting Timeline
    • Firms not in the initial reporting group could become affected in future years
    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
    • Sudden large scale expansion
      • New facility development
      • Acquisition of another business
    • Changed Business Practices
    • Change in the NGER legislation
      • Sudden tightening of thresholds
      • Inclusion of Scope 3
    • 250 houses
    • 1000 people
    • 45,000 km of truck travel
    • 22 daily return truck trips to MEL
    • 7,000 data servers
    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
    • A firms supply chains emissions (Scope 3) are often the highest contributor to aggregate emissions & therefore represent a considerable ‘sleeper’ risk to business
    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
    • The Dept of Climate Change is working with the professional audit community to construct the policy, guidelines and rules for the external NGER audit framework
    • The DCC has released a consultation paper on the external audit framework which they are seeking responses from the community (available from www.climatechange.gov.au/reporting )
    • A series of external audit stakeholder workshops have been setup to utilise the expertise and experience of existing auditors (both greenhouse / environmental and financial / corporate) and reporting entities to aid development of a robust and effective external audit framework
    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
    • Put simply, it makes Good Business Sense to proactively manage your firms C0 2 emissions as it mitigates both business risks and sets you up to take advantage of business opportunities
    Though an immediate tangible risk faced by business is reporting non-compliance, the risk portfolio extends into other areas, coupled with tangible business opportunities
    • Regulatory Risk
    • Supply Chain Risk
    • Product & Technology Risk
    • Competitive Risks
    • Litigation Risk
    • Reputation Risk
    • Physical Risk
    Business Risks Business Opportunities
    • Preferred Supplier
    • Employer of choice
    • Positive Brand Image
    • Emissions Trading
    • Capture New Customers
    • Bottom line contribution
    • Reduce Waste & Save Money
  • 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?
    • Smart building management system
    • Consider re-useable packaging with regular suppliers/customers
    • Seek out environmentally friendly substitutes for materials
    • Purchase energy efficient office equipment e.g. printers and copiers
    • Implement office procedures to save energy
      • Turn off equipment that is not needed
      • Last person out to turn off lights and appliances
      • Shutdown computers instead of using standby
    • Instead of travelling to meetings consider tele/video conferencing
    • Look at form design and remove heavy black backgrounds
    • Install efficient programmable hot water systems
    • Educate staff by holding awareness training sessions
    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
    • A Japanese textiles company located in Tokyo has created a facility that operates in darkness. Since it is fully automated there is no need for lighting. If there is a technical problem an alert is sent to a technician to attend the problem area. Lights automatically turn on like the lights of a airstrip. When the technician is finished the lights automatically turn off again as the technician leaves the area.
    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
    • Improved Profitability
    • Lower Operational Costs
    • Streamlined Operations
    • Improved Asset returns
    • Improved Sales returns
    • Increased Customer Satisfaction
    • Improved Inventory Management
    • Reduced Supply Chain Costs
    • Green Innovation
    A well constructed Carbon Management Response plan will deliver value to your business and secure its future sustainability & prosperity
    • Streamline GHG emission reporting process
    • Legitimate Green Branding & Promotion
    • An ability to demonstrate support for social and environmental responsibilities to customers, staff & institutions
    • Playing a valuable part in reducing the negative impact on the worlds environment
    • Protecting and preserving future generations economic, social and environmental prosperity
    Value Generation Productivity Improvements + Cost Competitiveness + Low Risk Investments Business Benefits
  • Immediate Steps for future proofing your business
    • Calculate your firms C0 2 emissions footprint
    • Develop an action plan for managing your C02 emissions
      • Assign a budget
      • Identify and action the C0 2 reduction ‘Quick Wins’
    • Engage staff on the opportunities within the business for addressing energy efficiency and C0 2 reductions
    • Develop a Carbon Strategy & Management Plan with targeted and measurable outcomes
      • Continuous Improvement program
        • Energy Efficiency
        • Renewable Energy / Fuel Switching
        • Cultural Change
    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