The study – titled Cleaning Up: Australia’s Readiness for a Low Carbon Future - found 54% of Australian businesses feel ready for a low carbon economy, but nearly two thirds – 64% - reckon the process is being hamstrung by regulatory uncertainty.
The report by the Economist Intelligence Unit, and commissioned by GE Australia, reveals 70% of companies polled are already taking steps to cut carbon emissions, particularly by reducing energy usage. More than two thirds are reporting against specific, measurable targets to reduce energy usage but only 29% have assessed the impact of different carbon prices on their business.
Of the 131 senior business executives surveyed, 54% rate their readiness for a low carbon future as excellent or good, with 12% rating their company’s preparations as poor or very poor.
But uncertainty over Australia’s future environmental policies is holding back business investment, says the report. Many polled CEOs voiced concerns they are making poor investment choices because of a lack of regulation.
The president and CEO of GE Australia and New Zealand, Steve Sargent, said the report highlighted the need for a carbon pricing policy to be finalised. “A clearly defined carbon policy framework is a crucial element to encourage further change in business behavior,” he said.
Conducted before the Federal Government announced its plans for an interim carbon tax before an emissions trading scheme, a quarter companies polled favour a carbon cap-and-trade scheme, 20% prefer a simple tax on the carbon footprint of their operations, with 12% wanting a consumer tax on the carbon footprint of goods and services consumed.
AGL Energy was one of the companies surveyed. It’s head of economic policy and sustainability, Tim Nelson, said, “the longer we wait for certainty, the more bad investment decisions are being made. Energy firms will minimise their capital at risk by deploying the lowest-cost electricity generation equipment, which is generally the least efficient.”
Woolworths already factoring a carbon price
Woolworths is a company that is already factoring carbon price into its investments. Armineh Madirossian, Woolworths's group sustainability manager, said the company is well prepared for the new carbon-pricing scheme, having undertaken analysis of potential risks and opportunities that may arise from a low-carbon economy.
“We have put every possible scenario on the table and looked at what that might mean for us. It’s an opportunity to say what is right for the business, which investments make sense and which areas can bear an additional cost,” said Madirossian. “We do factor in a shadow carbon price into future investments.”
"More details about the proposed carbon price would definitely drive more investment into low-carbon technologies—investments that currently do not meet Woolworths’s return-on-investment hurdles," she concluded.
The survey also revealed business optimism about reducing carbon emissions is mixed, with 54% of company’s saying the opportunities of moving to a low carbon outweighed the threats, 24% saying the risks are balanced; and 22% feeling the risks outweigh opportunities in the long run.
Of those companies promoting the positives of a shift towards lower carbon emissions the biggest benefits were improved customer relationships and the potential to develop new products and services.
When analysing the threats, there were few surprises - 73% said cost, with lack of competitiveness the second biggest threat (49%) and the creation of an uneven investment environment third (42%).
The respondents worked in a broad mix of industries— energy and natural resources; construction and real estate telecommunications, transportation, travel and tourism, agriculture; logistics and distribution, technology, manufacturing, retail, healthcare and education.
