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Carbon tax fails to spur business to do better

8 Nov 2012 SYDNEY MORNING HERALD - PETER HANNAM - EMISSIONS


MANY companies might moan about the carbon price but there's little sign the tax is prompting extra efforts to cut emissions, or for corporates to disclose more of what they are doing.

Compilers of the annual Carbon Disclosure Project (CDP) expected July's start of the tax to spur an increased response from the top 200 companies on the stock exchange. Instead, just under half participated, little changed from last year.

Response to the seventh CDP survey was higher among top 100 stocks, 71 per cent, though slightly down on the previous two years.

"We'd expect, as the impact of the carbon price and climate change become more material, the response rate will increase over time," said James Day, director of the CDP for Australia and New Zealand.

Financial firms, such as Insurance Australia Group and National Australia Bank, were among companies placing the greatest priority on dealing with the challenges of climate change, possibly out of concern "over reputation and customer expectations", the report found.

Among the largest companies declining to respond to the survey were QR National, Westfield Retail, Lend Lease, and the ASX itself.

Bank of Queensland, based in a state hit by significant flooding three years in a row, was among seven respondents to CDP 2011 but declined to participate this year.

The report's compilers, which include Deloitte Touche Tohmatsu, said the findings suggest companies were becoming "increasingly comfortable" with a price on carbon.

For instance, some 69 per cent of ASX200 and the top 50 listed companies in New Zealand identified a risk from the carbon price to their business, down from 81 per cent.

Just three - David Jones, Origin Energy and Arrium (nee OneSteel) - consider the tax to be a high risk, unchanged from a year earlier.

Qantas and Virgin Australia were among companies worried that a carbon price might turn consumers off their services. Both, though, won praise for their thorough disclosure..

Just 52 per cent of ASX200 respondents reported absolute and/or emission-intensity reduction targets, up from 40 per cent two years ago. Surprisingly, companies in the highest emitting sectors were among the least active in disclosing such goals.

"We would hope to see that companies, particularly those in directly affected sectors, are moving to set real targets," said Shauna Coffey, director of sustainability and climate change at Deloitte.

Taking into account non-respondents, the survey estimates 92 per cent of listed utilities do not have targets to cut greenhouse gases, with energy and material firms only marginally better.

"This general level of unresponsiveness . . . is problematic and demonstrates a continued lack of preparedness to respond to carbon prices," the report said.