Aaron Magner
UNSW Sustainability
Sustainability + CarbonPeople + profit + planet
The role of the CFO
CFO Symposium University of New South Wales
Overview
Sustainability + Carbon
> Carbon price impacts
> Mandatory reporting: carbon + greenhouse emissions
> Voluntary reporting: carbon + sustainability
> Evolving role + responsibilities of CFO + corporate finance
> Trends in sustainability reporting
> Sustainability and carbon issues to address now.
What Sustainability means for you
Sustainability = the capacity to endure.
Environmental> Energy—fuel, oil, alternative> Water> Carbon emissions> Waste reduction> Recycling> Reprocessing/re-use> Green cleaning> Agriculture/organic foods> Packaging> Product content> Biodiversity
Economic> Accountability/transparency> Corporate governance> Stakeholder value> Economic performance> Financial objectives
Social> Public policy and advocacy> Community investments> Working conditions> Health/nutrition> Diversity> Human rights> Socially responsible investing> Anticorruption and bribery> Safety> Fair Trade
The carbon price
Carbon emissions data = financial data> Clean Energy Futures package:
> Clean Energy Bill 2011 > sets up the carbon price. > Clean Energy Regulator Bill 2011 > sets up regulator. > Climate Change Authority Bill > advise government
on carbon price mechanism.
> 1 July 2012: $23 tonne CO2-e.
> 1 July 2015: Emission Trading Scheme
> Directly applies to 500 facilities.
> Pass through to consumers: indirect liability.
Carbon = NGER Reporting
National Greenhouse and Energy Reporting Act (NGER)Must submit by 31 October for year end 30 June:
> Energy consumed + energy produced> Based on invoices for electricity, gas, fossil fuels.> Calculate emissions for each ‘facility’ and each type of greenhouse
gas for each facility expressed as CO2-e.> Department of Climate Change and Energy Efficiency audits + fines.
NGER methodology underpins:> Carbon tax and Emission Trading Scheme> Government National Greenhouse Inventory. > National Carbon Offset Standard.
Carbon = voluntary reporting
Carbon + emissions data = financial data
> Energy Auditing and Management> Carbon tax liability assessment> Emissions Management Plan> Life Cycle Assessment> Carbon Neutral Certification for Company
or Product/Service> The Carbon Disclosure Project> Data visualization, smart grid, energy
efficiency opportunities.
Role of the CFOSustainability + Carbon data has becomeembedded in CFO’s traditional areas of focus.
> Access to evidence> Data collection processes> Strong analytical skills> Reporting skills> Reporting culture> Consistency of approach> Internal audit function> External audit relationships.
Sustainability reporting not yet mandatory.
Why report if you don't have to?
> Develop administrative capacity.> To drive value creation> Quality of management insight> Demonstration of value creation to stakeholders> Risk management incl. supply chain risks> Investor + customer demand> Competitor pressure> Request from stakeholders > To prepare for future mandatory reporting.
Sustainability IndexesSustainability Equity indexes> FTSE4Good
> Dow Jones Sustainability Index
> RepuTex
Credit rating agencies + investment brokers > Moodies + Standard and Poor's
> Thomson Reuters + Mercers
> Socially Responsible Investment (SRI)
> Environment, Social and Governance (ESG).
Sustainability reporting frameworksInternational
> The Global Reporting Initiative – GRI 3.1
> The UN Global Compact
> AA1000 Series
> Social Accountability 8000.
Australian> GRI followed by 90% of sustainability reporters> National Carbon Offset Standard> AUASB to issue ASAE 3410 Greenhouse Gas Statement.
Trends: Walmart + supply chain
> Suppliers must provide detailed sustainability data.
> Category of questions:> Energy & Climate> Material Efficiency> Nature and Resources > People & Community.
Trends: Product responsibility
Product reportingEthical shopper guide 0- Choice
What you can do
> Work with sustainability staff> Engage and connect sustainability data holders.> Develop sustainability performance metrics> Training staff in carbon accounting and sustainability reporting > Communicate a sustainability vision & mission> Establish a sustainability management committee for governance > Establish business rules and policies and procedures.> Consider carbon management and sustainability reporting software.> Consider third party audit and assurance.
Actions for CFO’s to take to enhance corporate value through sustainability
Thank you + Keep in touch
Aaron Magner Director UNSW Sustainability UNSW SYDNEY NSW 2052www.unsw.edu.au/sustainability
LinkedIn linkedin.com/in/aaronmagner Twitter @aaronmagnerSlideshare slideshare.net/aaronmagnerFacebook facebook.com/SustainUNSW
