Climate Change Risk & Opportunity Diagnostic

Dermot Duncan, head of our Climate Change Team, has recently launched, in association with GHD (International Technical Consultants) a Climate Change Risk and Opportunities Diagnostic (Diagnostic).

Upon his return to Australia in July this year, having practiced in Climate Change in the United Kingdom for the past 7 years, Dermot realised that businesses are struggling to understand their responsibilities and opportunities in respect of Climate Change and that his experience and the Diagnostic could help formulate their response.

The Diagnostic enables business to use a structured and transparent process to identify the core legal drivers to Climate Change. The Diagnostic then identifies the auditing, disclosure, reporting, technical, funding, legislative, contractual and operational options available to assist you implement your own Climate Change Strategy. Such an approach can ensure your business has a structured approach and is able to identify any 'gaps' that exist in your current strategy. It will also assist your business effectively communicate your Climate Change strategy to the market as well as reduce the risk of liability your business faces for 'greenwashing'.

A snapshot of the Diagnostic and an evaluation questionnaire can be downloaded at www.swaab.com.au.

Primary Drivers of Change

Some businesses are already reporting under the Energy Efficiency Opportunity Act 2006 (Cth) (EEO Act) as well as the National Greenhouse & Energy Reporting Act 2007 (Cth) (NGER Act). The NGER Act is intended to supersede the EEO Act and underpin the monitoring and reporting obligations under the Carbon Pollution Reduction Scheme (CPRS). However many business may not know that the 'corporate group' thresholds in s.13 of the NGER Act actually decrease during the first three years of the NGER Act's operation and are likely to capture many businesses.

Other drivers include,

  • a businesses' corporate obligations (whether it is listed or unlisted) under ss.180, 181 and 299, 299A of the Corporations Act where it is clear that business must consider the 'environment' when operating their business. Listed companies must also comply with ASX Corporate Governance Principles, in particular, Principle 3 (Ethical Decision Making) and Principle 7 (Risk Management);
  • a businesses' Environmental Corporate Social Responsibility (E-CSR); and
  • Principles for Responsible Investment (PRI) which are now a feature of investors' investment analysis which is evidenced through their 'screening' of investments as well as 'shareholder resolutions'; and
  • Reputational Risks to Business.

Conclusion

Dermot acknowledges that some businesses have pushed their Climate Change Strategy to the bottom of the pile recently: however, businesses need to address their Climate Change risk head on if they wish to adapt and prosper as there are opportunities as well as risks.

Swaab was recently named winner 'Best Law Firm in Australia (Revenue < $20m)' and 'Attribute Award for Exceptional Service (Australia Wide)' and at the 2008 BRW- Client Choice Awards.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.