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

Improving Australian greenhouse gas reporting and financial analysis of carbon risk associated... 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Sustainability Accounting, Management and Policy Journal Emerald Publishing

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

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
2040-8021
DOI
10.1108/20408021111162173
Publisher site
See Article on Publisher Site

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.

Journal

Sustainability Accounting, Management and Policy JournalEmerald Publishing

Published: Aug 30, 2011

Keywords: Climate change; Global warming; Taxes; Australia

References