Business also has a key role to play in lobbying government to ensure that the legislation introduced is market-friendly and is developed in conjunction with government. Dermot Gaffney, Tax Director at KPMG, said there is a strong likelihood that government might introduce a carbon or ‘green’ tax. “Business needs to rally together to lobby government and ensure a favourable dispensation.”
Business should not wait for regulation, however, said Shamini Harrington Environmental Advisor to SASOL, since it might be too late to respond in an appropriate manner only when the legislation is released. “Various mechanisms are already being used by business to measure their impacts, including the use of accredited agencies to provide assurance on the reported emissions data.”
In addition, investors are increasingly placing greater emphasis on the sustainability disclosures of a business before making decisions to invest in a company, said KPMG’s Zoe Lees – Associate Director, Sustainability Services. “The Carbon Disclosure Project (CDP) [in which companies declare their carbon emissions] is not only driven by compliance, but by investors who are starting to put higher value to companies who are responding to this issue.” A year-on-year analysis of CDP reports reveals that there have been some improvements in carbon emissions from the companies that have disclosed this information. As the lead sponsor of the CDP, KPMG chose to become involved because of the ability of the project to encourage companies to report on carbon emissions, related strategies, risks and opportunities, she said.
A further benefit to participating companies is that they have begun to manage their companies more efficiently and have seen reductions in water and energy usage and costs, for instance. To assist in addressing climate change issues, a combination of technologies is required. “Most companies that have begun to address the issue have introduced, or are considering, a portfolio of technologies,” added Harrington. “Companies should be addressing the low-hanging fruit in the form of energy efficiency measures, as currently low carbon technologies can be costly, and there are other issues to take into account such as long lead times for research to ensure the feasibility of technological solutions in different geographical zones.”
“A strong indication has come from government,” said Andrew Gilder of Imbewu Sustainability Legal Specialists, “that the country is prepared to shoulder its burden, recognise its responsibility to go hand in hand with the rest of the world in dealing with climate change and to take action to deal with greenhouse gases.” The consequence is that it is “very likely” that there will be increasing obligations on industry to address climate change in the form of regulation and legislation by the end of 2012.