Companies Not Ready to Manage Climate Change Risks

Only ten percent of companies are informed enough to manage the risks associated with climate change according to the largest survey of environment management practices conducted in Australia.

However, the new report has found that companies are deeply concerned about greenhouse emissions, and are taking action to reduce their consumption of electricity, gas, water and waste production.

The report, Environmental Sustainability and Industry, Road to a Sustainable Future, was produced by The Australian Industry Group (Ai Group), in conjunction with Sustainability Victoria. It involved 810 companies in the manufacturing and commercial construction sectors, representing 10.5% of activity.

The report examines management attitudes and practices in relation to environmental sustainability and was, in part, aimed at documenting and gaining a better understanding of business environmental performance in Australia.

Ai Group Chief Executive, Heather Ridout says companies clearly need more information on how they can improve sustainable practices, they need a better understanding of an emissions trading scheme, and they need better incentives, particularly for small to medium firms.

Ridout says Ai Group is already heavily involved in providing energy efficiency services to member companies through the Energy and Sustainable Business Help Desk and workshops and the report clearly shows that more investment is needed from both government and business in this area.

Sustainability Victoria, Chief Executive, Geoff Mabbett says the National Survey of Environmental Sustainable Practices and Industry is so significant because it provides an insight into where Australia’s business community is today, what actions businesses are already taking, and what opportunities exist.

He says while Australian companies are deeply concerned about lowering their greenhouse gas emissions, alarmingly only 10% of companies said they were informed enough to manage the risks associated with climate change.

He says this provides an opportunity for business and government to work hand-in-hand to reduce their environmental impacts and capitalise on a carbon constrained economy.

Key Findings in the study include

– 78% of companies believed they had a responsibility to contribute to a reduction in carbon emissions, even if it increased costs to the business.
– One quarter of firms identified one or more high risks from climate change, while a further 44% identified medium level risks.
– Loss of competitiveness due to cost pressures was considered to be the highest risk deriving from climate change.
– 73% of large firms had a written environment policy.
– Around 40% of companies indicated they had taken one or more actions to lower greenhouse emissions, undertaking research and collaboration with other firms, investing in new technology and processes, and fully offsetting emissions.
– The majority of companies saw opportunities from climate change to promote their company as socially responsible.
– The most critical priority identified by companies was managing electricity usage, however close to 45% of firms considered reduction of water usage another major priority.
– Only 14% of companies stated they understood the concept of an emissions trading scheme (ETS) well or very well while 40% said they had no understanding at all.
– Unsurprisingly, therefore, 69% of companies were undecided on their support for an ETS for Australia.
– The vast majority of activity on environmental sustainability has been undertaken by companies using their own funding.

Download the full Environmental Sustainability and Industry, Road to a Sustainable Future report (PDF 4.29Mb)