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Carbon Tax,Responsible Business, Business Ethics and United Nations Principles, ISO 26000

Carbon Tax,Responsible Business, Business Ethics and United Nations Principles, ISO 26000

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Carbon tax presentation logan chamber peter greenham independent inspections iigi Carbon tax presentation logan chamber peter greenham independent inspections iigi Presentation Transcript

  • The Carbon Tax and Small to Medium BusinessPage  1
  • The Carbon Tax andSmall BusinessRisk Management and Lessons Learned,The Ten Minute ArgumentBy Peter GreenhamIndependent Inspections Pty LtdP: 1300 857 149F: 1300 857 150M: 0402 259 479admin@iigi.com.auPage  2
  • Introduction  Clean Energy Bill  Carbon Accounting ?  Carbon Tax ?  Your Guide to Costs  Reducing Supply Chain Emissions  What is a Corporate Responsible business  How do you demonstrate being a responsible business?  United Nations Principles  Responsible Business Rating?  Corporate Reporting Methods?Page  3
  • Introduction (cont.) The national and international climate policy landscape is continually evolving. All companies will be at risk in the near future if they do not plan for a carbon constrained future. You may have existing legislation under which your company must comply, or you may need to prepare for the future. The main question businesses are now asking is: How do we ‘carbon proof’ ourselves and minimise the risks that the costs of compliance will have on our business. The Government has laid out a plan to move to a clean energy future through:Page  4
  • Clean Energy Bill The Government has laid out a plan to move to a clean energy future through: • introducing a carbon price • promoting innovation and investment in renewable energy • encouraging energy efficiency • creating opportunities in the land sector to cut pollution. Around 500 large polluters will be required to pay for their emissions intensity through a carbon tax. They account for more than 60 per cent of Australia’s climate change impact. Most Australian businesses that will be liable under the carbon pricing mechanism are businesses that already have reporting obligations the NGER Act.Page  5
  • Carbon Accounting Definition Carbon accounting is the accounting process undertaken to measure the amount of carbon dioxide equivalents that will be released into the atmosphere II’s greenhouse gas audits follow the structure provided by the International Standard 14064.1. This standard prescribes the inclusions and flow of company level greenhouse gas audits.Page  6
  • Carbon Tax The Carbon Tax will take effect as of 1 July 2012. Businesses will need to account for their carbon footprint as well as offsets in business operations. Carbon is a liability and Environmental Aspect Carbon price: a two-stage approach: – 1. Fixed price period—The carbon pricing mechanism will commence on 1 July 2012, with a price that will be fixed for the first three years. The price will start at $23 per tonne and will rise at 2.5 per cent each year in real terms. – 2. Emissions trading scheme—On 1 July 2015, the carbon price will transition to a fully flexible price under an emissions trading scheme, with the price determined by the market. Businesses that take action will be better prepared to adapt their business operation.Page  7
  • Carbon Tax Determining an organisation’s carbon management strategy will help mitigate the financial impacts and assist in becoming more competitive. From 1 July 2011, The Carbon Price Mechanism (Scheme) introduced a carbon price which will impact many Australian businesses. Surveys show that many Australian businesses, particularly SMEs, are struggling to understand what the CPRS means for them, and what they need to do to decrease their emissions intensity, maintain profit, prepare for imminent regulatory requirements and decrease their environmental impact. Companies that are well prepared understand the cost increases and their effect on businesses and consumers will stand to benefit.Page  8
  • Carbon TaxWhy did we do it ??Australia in the International Context Australia was involved in the early negotiations for the United Nations Framework Convention on Climate Change (UNFCCC) in the context of the 1992 Rio Earth Summit and became one of the first countries to sign the UNFCCC. Australia signed the Kyoto Protocol on 29 April 1998 but did not ratify it until 12 December 2007. Under these international agreements, Australia is required to limit its emissions to 108% of 1990 levels during the Kyoto Protocol’s first commitment period (2008- 2012) and, at Copenhagen in 2009, pledged to reduce its emissions to 5% below 2000 levels by 2020.Page  9
  • Carbon TaxCan or will liberal over turn the carbon tax?We believe not, as the government reports annually to the UnitedNations such as Copenhagen, Durban and RIO in 2012. This yearis the 20th Year of talking about taking action on a global scene inresponsible and transparent government.The Carbon tax how it will impact your businessWe are told that it will impact the top 500 companies under theNational Greenhouse energy reduction scheme (NGERS). Thereare 642 registered companies under this scheme. Whoeversupplies to these companies will be impacted in a number of ways.This is what we call the supply chain.Will is effect every business ? yesWho says this? KPMG, Ernst and Young and the Carbon MarketInstitutePage  10
  • Carbon FootprintThe calculation of the carbon footprint of an organisation orproduct should be performed in accordance with the followingprinciples, which are based upon those outlined in the GHGProtocol and adopted under the NGER System.These principles are consistent with those outlined under the otherAustralian and international standards referenced throughout theStandard, including the AS ISO 14064 and ISO 14040 series.The Emissions are broken into 3 areas:Scope 1 Emissions: The release of Greenhouse Gas into theatmosphere as a direct result of a activity.Scope 2 Emissions: The release of Greenhouse Gas as a result ofone or more activities that generate electricity, heating, cooling orsteam that is consumed by the facility but does not form part of thefacility.Scope 3 Emissions : The release of Greenhouse Gas into theatmosphere that occurs outside the boundary of a facility as aresult of the activities of the facility and are not scope 2 emissions.Page  11
  • Carbon FootprintA graphical image shows Scope 1,2 and 3 Emissionsbelow:Page  12
  • Breakdown by Area Typical Carbon Output of a business with $250,000 in Business Costs using data from the Expense sheet There are ways to reduce this impact of this cost through purchasing Carbon Credits around $15 per tonne.Page  13
  • Carbon FootprintThe degree to which any particular business experiencesincreases in its cost structure will depend on a number of factors,in particular, the amount of energy it expends in its operations, itsexposure to transportation costs and the proportion of its domesticinputs and production compared to its imports. A thorough understanding of the relevant implications of thelegislation will enable an organisation to develop the mostappropriate strategy to respond to the changes. Failing to do thismay result in unexpected and undesirable impacts on the financialand market position and performance of an organisation.The carbon price is likely to have significant indirect effects on theconstruction industry. The construction industry makes a largecontribution to emissions indirectly, as it acquires several differenttypes of materials, resources and services, such as steel, cement,bricks, glass, electricity, transport and waste disposal.Page  14
  • Carbon FootprintThe construction industry’s dependence on these other suppliers meansthat increased costs are likely to be passed down from direct emitters, forexample, higher prices for cement or steel. The emissions-intensiveprocess of making these materials will potentially see a significant increasein construction costs.Example1. A company supplies to 2 entities under the scheme, ANZ and NABThese banks have said to the company, we need to reduce you need toreduce your carbon emissions as it impacts our liability . We need you tonot only disclose your carbon footprint and be carbon neutral or we willneed to review our supply agreement or take our business elsewhere. Thecost to the company is about $10,000 for a audit and credits, securing over$1 million supply contract.2. A wine estate of $262 million in costs has 39 suppliers in its supplychain. With a reported liability of 363,779 tonnes of Co2 valued at $8.4million after passing the liability through the supply chain this was reducedby 75% to 86,277 tonnes of Co2 to $1.9 million. The figures speak for themselves.Page  15
  • Carbon FootprintSuppliers that do not manage CO2 will be deselected from‘Approved Supplier’ List to competitors who have Carbonmanagement plans.The results indicate that companies are making real changes totheir operating models, most frequently in procurement, resulting ingreater reductions in greenhouse-gas emissions and greatermonetary gains across the entire supply chain.The business case is strong and growing suppliers that do notmeasure, quantify, and manage their greenhouse-gas emissionswill soon see their business move to competitors that can providebetter information and clearer evidence of change. Of the 49 Carbon Disclosure Project Supply Chain member companies—the companies who are requesting climate information from their suppliers—90% of responding companies have a climate change strategy with at leastgeneral guidelines for procurement, an increase from 79% in 2010 and 74%in 2009. Some 62% reward suppliers that employ employ good carbon-management practices (up from 19% in 2009 and 28% in 2010), 39% willbegin deselecting suppliers that do not adopt such measures (compared to17% in 2009 and 23% in 2010), and 30% factor climate change into theirevaluation of suppliers.Page  16
  • Carbon FootprintThe next step is to more effectively evaluate suppliers, improveperformance through more effective procurement, and improve thetools and metrics used to quantify and monetise the gains fromemissions reductions. Executed correctly, supply-chain engagementwill not simply generate benefits for the environment but for thebalance sheet as well.At the same time, while disclosure is strong among globalsuppliers—67% of suppliers that responded to the informationrequest report scope 1 and scope 2 emissions— these companiesmust build on this foundation of communication and begin takingmeaningful actions to reduce their emissions.Of the 49 Carbon Disclosure Project Supply Chain membercompanies—the companies who are requesting climate informationfrom their suppliers—90% of responding companies have a climatechange strategy with at least general guidelines for procurement, anincrease from 79% in 2010 and 74% in 2009.Page  17
  • Reducing Supply Chain Emissions The following example demonstrates the key issuePage  18
  • Simulated Guide to Costs – Carbon TaxYour Guide to operational expenses with Scope 1,2and 3 carbon emissions CO2 Expenses Tonnes Price Cost $ 500,000.00 130.00 $ 23.00 $ 3,001.50 $ 250,000.00 65.25 $ 23.00 $ 1,500.75 $ 200,000.00 52.2 $ 23.00 $ 1,200.60 $ 150,000.00 39.15 $ 23.00 $ 900.45 $ 100,000.00 26.1 $ 23.00 $ 600.30 $ 50,000.00 13.05 $ 23.00 $ 300.15Page  19
  • Carbon Footprint process In order for any organisation to manage the impact of its greenhouse gas emissions, it must first quantify them. Independent Inspections (II) does this by conducting an emissions audit. 5. Client 1. Client  II’s greenhouse gas audits walk thru Assessment follow the structure provided by the International Standard 4. 14064.1. Carbon I.I’s Carbon 2. Client Audit Process  This standard prescribes the Footprint Data inclusions and flow of Report collection company level greenhouse generated gas audits. 3. Data input into carbon calculatorPage  20
  • Carbon Footprint process Information required; Elements of the Carbon Audit required to determine your companies carbon footprintPage  21
  • Carbon Footprint - Base line What’s next after determining your baseline carbon footprintAfter determining a companies base line carbonfootprint, it allows organisations to develop strategiesto address future cost constraints and exploreopportunities.- Approved suppliers status (Gov’t / Lrg Businesses)- Develop competitive Advantage (first to market)- Purchase carbon credits to offset carbon liability- Implement energy saving initiatives o Solar panels, energy efficient lighting, car pooling o Alternate energy sources, public transportPage  22
  • What is a Responsible Business? Responsible business practice is the recognition of, and response to the interconnectedness and interdependence of business within our world of which the global financial crisis and climate change are consequences. Responsible business practice advocates that the true costs and obligations of business and organisational activity are accounted for - both financial and non-financial and require a process of accountability, transparency (Supporting Local Community and Business Economy)Page  23
  • How do you Demonstrate Being a ResponsibleBusiness? ISO 26000 is the Standard for Corporate and Social Responsibility and is embedded by United Nations Global Compact Principles. The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the core areas of : – Human Rights – Labor – Environment – Anti-Corruption Independent Inspections Pty Ltd is one of 37 Australian companies that has supported the Global CompactPage  24
  • The United Nations 10 PrinciplesHuman Rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses.Labour Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation.Environment Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies.Anti-Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.Page  25
  • Responsible Business Rating? ISO 26000 Validation of the current company procedures implementation and methodology can work for your organisation. It provides a progressive systematic management approach that encompasses best practice for application , monitoring and communication of progress as a responsible business to the local community and business economy Businesses depending on size operate at 3 main levels in demonstrating CSR and Sustainability and these can be categorised as: o Basic: May have some community involvement but not recorded, o Intermediate: Community engagement, records and reporting, o Advanced: Corporate Reporting to United Nations and GRI GuidelinesPage  26
  • Action Rests with YouPage  28
  • Why Independent Inspections Pty Ltd All consumers and businesses are likely to be affected by the carbon tax as the high energy users pass on the cost of the tax down the chain. I.I. can assistance in determining what your risks and opportunities might be under the carbon tax. It is one of five (5) companies that is certified to audit scope 3 emissions in Australia. I.I is a member of the United Nations Global Compact and the Carbon Market Institute providing up to date information to its clients reporting to AS ISO 14064.1-2006 Guidelines It has a dedicated team that will assist you step by step through the entire carbon footprint assessment process. From there we can give advice on how to reduce it as well as save yourself money and can even sell you carbon credits to completely offset it.Page  29
  • Independent Inspections - Services We can deliver the audting process of We deliver Sustainability conducting a systematic examination Services & Solutions from of your quality system. Building Cost Management, Energy & Carbon Emission Audit Reports leading to Reductions in Costs , CO2 Emmissions and Carbon Footprints.We can deliver a systematicalexamination of your management We provide Training solutionssystems carried out by an auditor or an and RTO Accreditted Courses Inaudit team. It is an important part of Sustainability, Laboratory,organisations quality management Chemical ,Environmental andsystem and measured against the Quality Auditing.Australian and New Zealand SafetyStandard 4801. Page  30
  • Independent Inspections Pty LtdPage  31
  • Independent Inspections Pty Ltd 2012 Live and Local Carbon Neutral Assisted by Independent Inspections Pty Ltd - Mr. Peter Greenham Note: I.I. is a " Certified Carbon Neutral " company and we can do the same for YouPage  32
  • Independent Inspections Pty Ltd Independent Inspections Pty Ltd Mr. Peter Greenham Your Carbon Auditors Qualifications: P: 1300 857 149 - Diploma of Civil Engineering F: 1300 857 150 - Associate Diploma of Laboratory Operations Sales Team - Diploma of Quality Management - Diploma of Business Mr. Jonathan Yuen (B.Bus) - Lead Environmental Auditor M: 0419 188 779 - Diploma of workplace training and jyuen@iigi.com.au Assessment - NATA Asessor Mr. Jon Kane (B.Comm) M: 0402259479 peter@iigi.com.auPage  33