Global Carbon Management

Deakin University November 18th, 2011:

New Frontiers in Sustainable Governance

Matthew Tukaki, CEO

The Sustain Group

www.sustaingroup.netwww.sustaingroup.net

- 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…


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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


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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


Carb

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Bra

nd

ing

Cash flow

Increased compliance

Hig

h w

ag

e

dem

an

d

Global Economy

US Job Numbers

GreeceUS Unemployment

The

Pric

e of

Iro

n O

re

The Chinese EconomyG

illard’s polling

Staff well being

Sale

s perf

orm

ance

Skills demand

To grow or not to grow

Interest rates

Inflation

Tax

Cost controls

Buyer

behavio

ur

The Board

Governance

Japans recovery

Demographics

Execu

tive loss

Climate change

Corruption

Competitors

Partners

Suppliers

The Banks

Early election

Coa

litio

n po

licie

s

Reven

ue d

iversity Payroll tax

Productivity

Leadership

YouTube

Social Media

Trade Barriers

Tw

itte

r

Invoicing

IT Systems

BudgetBlow outs

Security Pub

lic R

elat

ions

Market share

Death

Court Rulings

European idiots who can’t manage a buck

Political Environment


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.


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 environmentsPublic policy and planning Construction and infrastructure Governance and management Education and vocational training


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


Explanation of carbon pricing1. Legislation has been passed2. Carbon pricing to begin from July 1st 2011 3. 500 companies and sites to be affected – Australia’s heaviest emitters 4. Source of the emitters are those who are subject to current reporting

frameworks such as NGER’s5. They include a raft of organisations and sites from energy companies,

heavy industry, wholesale manufacturing through to waste management and landfill owners

6. The initial price will be $23 per tonne and this will rise by 2.5% in 2013-14 and again in 2014-15

7. From July 1st 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

8. 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

9. This is because New Zealand already has emissions trading in place


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Direct impacts

2. Pass through

3. End of the line

What impacts one impacts us all: impacts across the supply chain

1. Companies who will pass through

2. Companies who will be absorb

3. Companies and organisations who still have no idea

Example: Increase in the number of environmental and policy makers required to ensure compliance


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

Ch

ang

es in

b

ehav

iou

rIn the privacy of our own homes we know something needs to be done….

Question is: when and has that already translated into workplaces?


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”


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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 1st of 2014 which means it could be July 1st 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…


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....


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


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


Carb

on

Pri

cin

g

Bra

nd

ing

Cash flow

Increased compliance

Hig

h w

ag

e

dem

an

d

Global Economy

US Job Numbers

GreeceUS Unemployment

The

Pric

e of

Iro

n O

re

The Chinese EconomyG

illard’s polling

Staff well being

Sale

s perf

orm

ance

Skills demand

To grow or not to grow

Interest rates

Inflation

Tax

Cost controls

Buyer

behavio

ur

The Board

Governance

Japans recovery

Demographics

Execu

tive loss

Climate change

Corruption

Competitors

Partners

Suppliers

The Banks

Early election

Coa

litio

n po

licie

s

Reven

ue d

iversity Payroll tax

Productivity

Leadership

YouTube

Social Media

Trade Barriers

Tw

itte

r

Invoicing

IT Systems

BudgetBlow outs

Security Pub

lic R

elat

ions

Market share

Death

Court Rulings

European idiots who can’t manage a buck

Political Environment


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


Matthew Tukaki

[email protected]

www.sustaingroup.net

www.unglobalcompact.org.au

Thank you

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