Investors will flock into carbon-efficient companies: report

Along with fuel bills, carbon bills will now be added to the list of concerns of Australian top companies, as these are estimated to hit $5 billion under the proposed emissions trading scheme.


According to the latest report on carbon disclosure, ASX200 companies have improved reporting on carbon emissions, but the huge costs of carbon management present a pressing need to innovate and improve operations.

The report came as VicSuper, with the support of the Environment Protection Authority Victoria, commissioned environmental research firm Trucost to analyse the carbon disclosure and performance of companies in the S&P ASX200.

Also examined in the report was potential profit risk under the impending carbon pollution reduction scheme, which would apply a carbon price of $20 per tonne.

A further 10 per cent of corporate carbon emissions have been disclosed this year, with sectors including airlines, media and textiles disclosing emissions for the first time.

The report revealed companies in the ASX 200 emitted 243 million tonnes of greenhouse gas, equivalent to 42 per cent of total carbon emissions in Australia.

The costs of carbon emissions by top companies are expected to total more than $4.8 billion.

VicSuper chief executive Bob Welsh said carbon performance would be a key criterion for attracting investors in the future as the staggering costs of carbon emissions would affect companies’ profitability.

“The good news is that more Australian companies are measuring and publicly reporting their carbon emissions than last year,” Mr Welsh said.

“The bad news is that the environmental damage costs of these emissions are significant. The challenge now for corporate Australia is to eliminate these costs through innovative design and process improvements.”

By ratifying the Kyoto Protocol, the Australian Government is determined to cut greenhouse gas emissions by an average of five per cent against 1990 levels between 2008 and 2012.

Trucost chief executive Simon Thomas said now the need for accurate carbon data is greater than ever to enable investors to assess the carbon performance of companies.

“The report shows that many more companies are now accounting for their contribution to climate change. This comes in response to the Australian Government’s commitment to addressing business greenhouse gas emissions as well as requests by responsible investors,” Mr Thomas said. 

“Quality carbon data is vital for investors in Australian equities to identify risks to portfolio returns, as well as opportunities to develop low-risk portfolios that favour carbon-efficient companies.”


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