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Improving Australian greenhouse gas reporting and financial analysis of carbon risk associated with investments

Tim Nelson (AGL Energy, Sydney, Australia)
Elizabeth Wood (AGL Energy, Sydney, Australia)
James Hunt (AGL Energy, Sydney, Australia)
Cathlin Thurbon (AGL Energy, Sydney, Australia)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 30 August 2011

Abstract

Purpose

Climate change policies such as carbon taxes and emissions trading schemes are being developed and implemented in ways which fundamentally transform the profitability of industries and businesses. While mandatory reporting of greenhouse gas emissions by individual Australian companies is now largely standardised, the financial implications of emissions trading and other forms of climate change policy are poorly understood. This paper aims to discuss these issues.

Design/methodology/approach

A literature review was conducted of financial analyst research on this issue and determined that this poor understanding is the result of either insufficient information being available to adequately evaluate the risk to business or a lack of understanding about how carbon policies will impact on business.

Findings

This paper proposes a “checklist” for evaluation of the risks and opportunities created by pricing carbon to address this analytical chasm. Most importantly, like any significant tax reform, the paper concludes that it is impossible to create simple metrics that can be used across all industries and companies.

Originality/value

The paper outlines, for the first time, a checklist for analysis of the impacts of carbon pricing on Australian businesses.

Keywords

Citation

Nelson, T., Wood, E., Hunt, J. and Thurbon, C. (2011), "Improving Australian greenhouse gas reporting and financial analysis of carbon risk associated with investments", Sustainability Accounting, Management and Policy Journal, Vol. 2 No. 1, pp. 147-157. https://doi.org/10.1108/20408021111162173

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited