Global Carbon Management
- 1. Deakin University November 18 th , 2011: New Frontiers in Sustainable Governance Matthew Tukaki, CEO The Sustain Group
- 2. - What’s happening across business and industry in Australia? - What’s happening in New Zealand - What’s with the political narrative? - Some of the underlying key challenges business face - The global challenge: “sealing a deal” - The opportunities Themes…
- 3. About the Sustain Group We conduct carbon footprint analysis using the input-output method and the processes / tools first championed by the University of Sydney We work with organisations with diverse supply chains, both at home and abroad We run education briefing programs: in 2012 we will be launching several certificate and diploma level programs in partnership with an institution We have a sustainability employment and skills development division We also operate a “boots on the ground program” reviewing supply chains in foreign countries and conduct research into the business response to climate change We operate across 13 jurisdictions
- 4. About the United Nations Global Compact The worlds largest corporate citizenship initiative with more than 6,000 global signatories Signatories in Australia include Westpac, Woolworths, Nestle, Treasury Wine Estates, Rio Tinto, BHP, the ANZ, the National, KPMG, Allen’s Arthur Robinson, xStrata, St James Ethics Centre, Griffith Univeristy Recently with the Minister of Justice I announced the formation of a UNGCNA Leadership Group on Anti-Corruption and in February of 2012 we will establish a specific Leadership Group for the Environment 2012 will be a significant year in global public policy for climate change
- 5. Carbon Pricing Branding Cash flow Increased compliance High wage demand Global Economy US Job Numbers Greece US Unemployment The Price of Iron Ore The Chinese Economy Gillard’s polling Staff well being Sales performance Skills demand To grow or not to grow Interest rates Inflation Tax Cost controls Buyer behaviour The Board Governance Japans recovery Demographics Executive loss Climate change Corruption Competitors Partners Suppliers The Banks Early election Coalition policies Revenue diversity Payroll tax Productivity Leadership YouTube Social Media Trade Barriers Twitter Invoicing IT Systems Budget Blow outs Security Public Relations Market share Death Court Rulings European idiots who can’t manage a buck Political Environment
- 6. The New Zealand Emissions Trading Scheme New Zealand was the first country outside of the European Union to implement an emissions trading scheme – Implemented in full after a staged approach bringing different industries online at different times, the carbon price is $12.50 per tonne (Agriculture is yet to enter / 2015) Politics: implemented and legislated by a Labour Coalition Government and carried through by a National led coalition Government. When National came to power only a few minor adjustments have been made Reversal of deforestation is occurring: with a peak loss of 20,000 hectares in 2007, in 2012 the Government predicts that deforestation will decrease to 4,000, with afforestation increasing to over 7,000 NZ emissions are down: after a 23% increase in emissions between 2003 / 7, New Zealand’s net emissions have fallen for the last two years Just 2% have not met their obligations Dr Nick Smith, Climate Change Minister: Dr Smith said the Kiwi scheme had clearly changed behaviour, with forest areas getting larger and growth in price incentives for renewable electricity.
- 7. The New Zealand Emissions Trading Scheme “ Renewable electricity achieved an unprecedented 12-year high of 79% in 2010. 1340MW of new power have been consented to in the past year, with 59% wind, 26% geothermal, 13% hydro, and 2% tidal. No longer are fossil fuels dominating energy generation proposals.” “ As a result of New Zealand’s ETS, the government claims that it is on track to “comfortably” meet its Kyoto targets. Without the ETS, the country would be looking at exceeding its target by 19.5 million units and facing $485 in international costs. Now it looks like it will be hitting its Kyoto targets with a 21.9 million surplus.” Drivers to innovation in: Research in the agricultural and built environments Public policy and planning Construction and infrastructure Governance and management Education and vocational training
- 8. And this has happened at a time of great upheaval in New Zealand…. The Christchurch Earthquakes An economic recession The Pike River Mine disaster One Government followed another
- 9. Explanation of carbon pricing Legislation has been passed Carbon pricing to begin from July 1 st 2011 500 companies and sites to be affected – Australia’s heaviest emitters Source of the emitters are those who are subject to current reporting frameworks such as NGER’s They include a raft of organisations and sites from energy companies, heavy industry, wholesale manufacturing through to waste management and landfill owners The initial price will be $23 per tonne and this will rise by 2.5% in 2013-14 and again in 2014-15 From July 1 st of 2015 the price will be set by the market and there is no forecasting as to whether or not the price may increase or decrease There is likely to be a form of emissions trading before 2020 and it is even more likely that a form of emissions trading will take place between Australia and New Zealand This is because New Zealand already has emissions trading in place
- 10. The supply chain Direct impacts 2. Pass through 3. End of the line What impacts one impacts us all: impacts across the supply chain Companies who will pass through Companies who will be absorb Companies and organisations who still have no idea Example: Increase in the number of environmental and policy makers required to ensure compliance
- 11. People are much more savvy about the buying decision – they are seeking validation What impacts will cost increases have on me and my family The home front We want to know what we are getting is what it says on the packaging Require a higher degree of validation of the statements being made by retailers and manufacturers, service providers and even Government Increase in the number of social media campaigns being driven by the use of new mobile devices and access to online platforms Kimberly Clarke Sea Lord Nestle Sinarmus Changes in behaviour In the privacy of our own homes we know something needs to be done…. Question is: when and has that already translated into workplaces?
- 12. Australia and the business response & challenges Increasingly, and irrespective of regulation, business was beginning to respond to climate change because consumer behaviour was shifting – but not on volume (which is why regulation is sometimes needed) Government public policy execution in this area is still relatively infant – that is, unlike places such as Australia and New Zealand we currently do not have skills volume or surplus Education frameworks are not at a level of maturity where programs have been developed or are in place to effectively teach the dynamics of such a diverse and complex series of subjects The politics of climate change are still confusing the public narrative: this leads to business uncertainty when an Opposition riding high in the polls says they will scrap the “Tax”
- 13. The political Hypothetical An election in 2013 The Opposition wins / takes Government at the end of 2013 Already reached year 1.5 of the fixed price period The election cycle “ We will dump this unfair tax” Practically impossible to remove the scheme by January 1 st of 2014 which means it could be July 1 st of 2014 – the end of year two and start of year three Why is it practically impossible? The practicality of the politics and the complexity of a sophisticated piece of legislation. This is economic, structural, social and taxation “weaving” – also, it is plausible that the Senate will still be controlled by the Greens which would likely cause a double dissolution election – which is a very big risk to take…
- 14. Australia and the business response & challenges Business and industry have been, and continue to complete carbon footprint analysis and develop carbon reduction programs There is an expectation that investment will be unlocked and that will lead to innovation New Industries already beginning to take shape: carbon trading, consulting and research, education, skills and employment Henny Penny the sky will not fall in....
- 15. The opportunities Investment in renewable energy and transition Investment and research and the growth of new education programs / both tertiary and vocational The creation of both new jobs and the transition into changing roles Interoperability between the New Zealand and Australian programs Movement of skilled labour across the Tasman Leadership recognition for both Australia and New Zealand
- 16. The global challenge ahead Durban in 2011 and Rio in 2012 Large pieces of complex global change takes time It took decades for global trade agreements to take shape, it decades for a central governance watch dog to be in place - the World Trade Organisation Why did Copenhagen fail? The world was distracted
- 17. Carbon Pricing Branding Cash flow Increased compliance High wage demand Global Economy US Job Numbers Greece US Unemployment The Price of Iron Ore The Chinese Economy Gillard’s polling Staff well being Sales performance Skills demand To grow or not to grow Interest rates Inflation Tax Cost controls Buyer behaviour The Board Governance Japans recovery Demographics Executive loss Climate change Corruption Competitors Partners Suppliers The Banks Early election Coalition policies Revenue diversity Payroll tax Productivity Leadership YouTube Social Media Trade Barriers Twitter Invoicing IT Systems Budget Blow outs Security Public Relations Market share Death Court Rulings European idiots who can’t manage a buck Political Environment
- 18. The global challenge ahead “ Business is engaged because unlike Governments we cross borders and are transnational – therefore, by being held to account by shareholders and consumers alone, change occurs – with the rise of social media comes the added challenge of being governed by a watchdog that is also not a regulator…..welcome to the biggest change in compliance of all – the use of social media to force changes in behaviour” Matthew Tukaki
- 19. Matthew Tukaki matthew.tukaki@sustaingroup.net www.sustaingroup.net www.unglobalcompact.org.au Thank you