Is business carbon ready ... or not? - 11 June 2009

Business is far from ready for a carbon constrained economy according to a PricewaterhouseCoopers' survey of 151 Australian Chief Executive Officers (CEOs) released today

The survey, Carbon ready…or not, highlights a lack of certainty in the Australian business community. Less than a quarter (23.8 per cent) of Australian businesses are prepared for the introduction of the Australian Government's Carbon Pollution Reduction Scheme (CPRS). Nearly as many businesses, 22.5 per cent, have made no preparations for the scheme which is to be reviewed in the Senate next week.

Almost three quarters of the businesses surveyed (72 per cent) view the CPRS first and foremost as a compliance obligation.

PricewaterhouseCoopers' Sustainability & Climate Change Leader, Liza Maimone says, "CEOs continue to grapple with their role in the design and implementation phases of an emissions trading scheme, which they recognise is necessary to shift to a low carbon economy.

"Lack of clarity in leadership roles and a strong focus on the short term compliance requirements of the Government's CPRS is slowing momentum amongst businesses and impacting their preparedness."

According to the survey, around one in three businesses still haven't factored the CPRS into their forward corporate strategy.

This is a warning sign, says Sustainability & Climate Change partner Andrew Petersen, that Australian business has a poor understanding of the potential negative earnings impact of emissions trading. More importantly, it reveals that businesses can't see the opportunities for carbon reduction.

"The Australian Government needs to heed these warning signs and collaborate with business to stimulate billion dollar capital flows, develop, deploy and commercialise technology and encourage international markets for low carbon investments, leading up to the next round of talks at Copenhagen in December," he says.

"Although Australian business is failing to prepare for the CPRS more than two-thirds favour the proposed cap and trade model over a carbon tax or environmental regulation. We can expect to see further clarification around Australia's response following debate in the Senate next week.

Mr Petersen says that regardless of the outcome next week Australian businesses need to look beyond the political debate.

"While business has been given breathing space to prepare for the scheme after the Government announced a revised start date, carbon management is fast emerging as one of the measures of corporate success in the 21st century.

"Preparing a business to survive, respond and grow in a low carbon economy could well be the mark in the future between good and great business leaders," Mr Petersen says.

"Australia's proposed emissions trading scheme will reveal a robust price of carbon, raise carbon-related investment and drive behavioural change," says Ms Maimone.

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