Business

Jun 27, 2006

Companies finally under pressure to disclose greenhouse gas emissions

Australia is well on the way to having new mandatory disclosure requirements for industrial greenhouse gas emissions following a ministerial meeting last Friday. Federal

Australia is well on the way to having new mandatory disclosure requirements for industrial greenhouse gas emissions following a ministerial meeting last Friday.

Federal and state environment ministers recommended greenhouse reporting and public disclosure be mandatory for all companies emitting more than 25,000 tonnes of CO2 or using more than 100 terajoules of energy – and that's a lot of companies. The recommendation now goes to COAG – which in February acknowledged public reporting was an “important” part of any climate change action agenda.

The best option for public disclosure would be to expand the scope of the National Pollutant Inventory – already a treasure trove of data on other emissions by larger companies. Friday's meeting of environment ministers agreed to release a proposal to do just that. Depending on the public comment outcome, the NPI could be expanded to cover greenhouse gases by next April, or even sooner. Victoria has led the push for greenhouse disclosure to be done through the NPI, with the federal government ambivalent at best.

Meanwhile, a largely overlooked recommendation in last week's parliamentary committee report on corporate responsibility says companies should disclose their "top five" sustainability risks and their strategies to manage them. The concept of a corporate "top five" might be hard to define. But it's indisputable that greenhouse gas emissions constitute a major risk for large emitters. According to Coalition committee members, the push for "top five" disclosure should be through ASX best practice guidelines.

Labor members went further, saying the Corporations Act should be amended to introduce a “flexible, mandatory” requirement to disclose. The thoughts of the ASX Governance Council, which issues the best practice guidelines, will become clearer in the next few months. The council is due to release a discussion paper shortly on how its guidelines could be changed to better tackle issues such as material non-financial risks.

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