On July 16, the Australian Government released proposals for its plan to tackle climate change by reducing carbon pollution, setting out a number of policy options, the government’s preferred policy to establish an emissions trading scheme and the support proposed to help households and businesses adjust to this economic transformation.

The government intends that the scheme will commence in 2010. This is a whole-of-economy reform on par with past economic reforms such as the reduction in tariffs or deregulation of the financial system.

At the heart of the Carbon Pollution Reduction Scheme is emissions trading, in which the government will set limits on how much carbon pollution industry can produce. The government will then sell the permits up to that limit, creating an incentive to look for cleaner energy options. Companies will be able to buy and sell permits from each other depending on how much they value them, thereby enabling the market to find the most efficient ways to reduce carbon pollution.

With this in mind Chartered Secretaries Australia is seeking your views on how prepared business is to meet the challenge of the government’s climate change agenda and keep investors informed.

1. Has your board discussed the impact of proposed climate change reforms on your business?

a) Yes 64%
b) No 36%

Comment

Preliminary discussions only.
Only actual not anticipated compliance is usually considered. Speciality is putting out spot fires, not forward planning!
A paper was prepared by management commenting on the emissions control and trading proposals/requirements and potential impact. An initial audit is being undertaken.
Given our company will not be directly regulated it has been listed for board discussion later in the year.
Preliminary discussion only with more details to be provided once assessment completed.
Yes, in significant detail.
Being in the telecommunications sector climate change reforms are not seen as impacting on our business.
We have a group-wide target to reduce our carbon profile.
We have continued to develop our sustainability strategy over the past 12 months of which planned emissions trading forms part.
Next meeting.

2. Is the board spending more time on climate change as a risk management issue?

a) Yes 64%
b) No 36%

Comments

With regulatory implications (and therefore penalties) the board needs to educate itself about the requirements and its impact on the business.
Only actual not anticipated compliance is usually considered.
Emissions control proposals are now included in the action programme for the Audit & Compliance Committee, with management requested to report annually.
Preliminary awareness discussions only.
Not excessive. Incorporated in overall risk management topics.
Standing agenda item. The board is committed to being at the forefront.
Time spent coming to terms with the likely impact of the reforms on the company from a compliance perspective, cost impact and likely opportunities. We have it on our board agenda as a standing item to report against at each meeting.

3. Has your board considered what additional skills and competencies will be required by the board to oversee your company’s response to the whole-of-economy climate change reforms?

a) Yes 40%
b) No 60%

Comments

Not specifically at this point beyond seeking further understanding.
Only actual not anticipated compliance is usually considered.
Not directly to my knowledge, though board evaluation and succession planning processes may include this as a criterion.
Not so much skills of the board, but there have certainly been assessment of the skills required within the organisation.
In place.
We have a dedicated Sustainability Officer as a senior manager and this person has a support team.
We recently appointed a board member with expertise in this area. We have also recently constituted an OHSE Board Committee with a brief to look at this area.

4. Is there a gap between the skills and competencies of the current board and what will be required to fulfil its oversight role in response to climate change reforms?

a) Yes 18%
b) No 82%

Comments

Not expected — should be able to apply existing skills to this new risk management issue.
Lawyers abound.
Risk management skills are required, rather than specific skills.
Too early to determine.
Not apparent at this time.
I don't think there is. We have been involved in carbon trading/emission control for at least 5 or 6 years now. This is not new to our board.
Not any more. We recently appointed a board member with expertise in this area. We have also recently constituted an OHSE Board Committee with a brief to look at this area.

5. What steps is your board undertaking to close the gap and recruit the necessary skills and expertise to the board?

Comments

Only actual not anticipated compliance is usually considered. Speciality is putting out spot fires, not forward planning!
Not required — we have experienced staff in this area.
None at this stage.
Advice being obtained from technical consultants.
When considering the mix of skills required by a prospective board member we gave consideration to candidates with skills and experience in this area.

6. Has your board set up a committee to specifically address the issue of proposed climate change reforms?

a) Yes 23%
b) No 77%

Comments

Existing Ethics and Compliance Committee is addressing the issue.
Only actual not anticipated compliance is usually considered. Speciality is putting out spot fires, not forward planning!
No, but this will fall within the remit of the Board Committee with responsibility for sustainability matters.
Yes, but not a board committee.
Sustainability Committee was formed.
We have a Group Sustainability Committee chaired by the Group Sustainability Manager. This Committee reports to the Group Executive Committee.
We have recently set up a board OHSE committee and also an executive working group to focus on sustainability issues.

7. Is the company secretary in your company spending more time on the reporting of the impact of climate change reforms and other environmental issues relating to risk management generally?

a) Yes 18%
b) No 82%

Comments

Enormous increase in understanding the implications and drawing on business heads to assess regulatory and risk impact.
No, although would like to, it's hard when continued funding is any issue.
CRO has accountability.
At this stage, the executive responsible in this area is Managing Director.
Preliminary issue identification and research legislation with relevant operational management.
We have a separate function that focuses on such risks.
Other managers have this responsibility.
Additional time is spent facilitating setting agendas and holding of OHSE meetings and ensuring changes in the area are brought to the attention of management and the board.

8. If it is not the company secretary, who in your company is spending more time on the reporting of the impact of climate change reforms and other environmental issues relating to risk management generally?

Comments

EGM Risk
Environment specialists
Senior Risk Manager
Additional resources being sought to assist
No-one
CRO (Chief Risk Officer)
No one nominated
The managing director draws on the resources of the General Manager Strategy & Planning
Covered through our Brand Development & Positioning executive; also Operational Risk for risk generally
Chief Risk Officer
Operational managers
Manager sustainability reporting and the GM of Environmental Services
Scientific reports to risk management committee
Vice-President Sustainability
The Group's Sustainability Manager is responsible for overseeing action against the Group's sustainability strategy, targets and commitments.
Time is also being spent by operations executives on the impact on their operations and by the accountants who are responsible for monitoring and recording carbon emissions in accordance with the new legislation.

9. Will your company seek or has it sought assistance from climate change and/or risk management consultancies to assist it to prepare for the impact of climate change reforms on your business?

a) Yes 45%
b) No 55%

Comments

Both operationally and areas such as IT.
Potentially if we identify any gaps.
At this stage an initial audit has been instructed.
Do not know.
Legal advice on potential reporting implications from NGER as predecessor to ETS.
Depends on complications that may arise for our industry.
Internal science person.
The Group consults with many consultants at considerable cost.
It is likely that we will as the issue escalates and reporting deadlines draw closer.

10. Has your company developed and implemented internal and external reporting processes on its management of climate change as a risk management issue, such as those sought under Principle 7 of the ASX Corporate Governance Council and the Global Reporting Initiative?

a) Yes 41%
b) No 59%

Comments

Generally working towards meeting expected timetables.
Detailed internal reporting on emissions in place. This was necessary to comply with reporting responsibilities under the Energy Efficiencies Opportunities Act and to assess contractual issues with clients as to which party will report emissions under NGER and consequent potential profit impact. External reporting will be at a general level until the detail of how NGER will operate is settled.
These continue to evolve and will become more extensive and detailed over time.
But working towards achieving this by way of data capture.
In the process.
Regular reporting to Board and Management Committee by the Climate Change Working Group.
Not seen as impacting on the CG obligations for our business.
Not considered a significant risk for our industry.
The Group produced its Sustainability Report for 2007 which covers areas such as sustainability priority areas, business conduct and responsibility of employees, corporate governance, environmental impact, climate change action etc.
It is in the process of implementing these reporting processes. Climate change is just one of many company risks that need to be managed.