25 October 2007
Sydney, 25 October 2007: Businesses need to take a critical approach to understanding what it means to be carbon neutral to capitalise on the opportunities presented by carbon trading as well as avoid future risks, a leading environmental lawyer at national law firm Clayton Utz said today.
Speaking at a Clayton Utz seminar on the risks and costs associated with carbon neutrality, Clayton Utz partner Brendan Bateman said in the absence of a generally agreed standard for measuring the reporting and abatement of carbon emissions, companies had to think carefully about how they chose to measure their carbon footprint.
"The reality is that the issue is complicated by a number of questions that the business must consider, including what is an emission of a business and what is not," Mr Bateman said.
Mr Bateman said companies faced a number of risks - regulatory, financial, business and reputational - if they failed to properly measure their carbon footprint or ensure the integrity of any abatement initiatives they may undertake.
"To the casual observer, the commitment of businesses to achieving carbon neutrality seems relatively straightforward - it means the business either cuts its emissions to zero or buys carbon offsets to pay someone else to offset its emissions. Or does it?" Mr Bateman said.
Mr Bateman was speaking prior to a panel discussion on the implications for business of the quest to achieve carbon neutrality. Members of the panel included Karel Nolles, an associate director of Macquarie Bank Limited, and Judi Hansen, general manager sustainability, Sydney Water.
Mr Nolles examined the wide range of carbon offset instruments available in the market and their price differentials, while Ms Hansen outlined Sydney Water's strategy for becoming carbon neutral by 2020 and the importance of having carbon reduction schemes independently verified.
The third panel member, Clayton Utz partner Paul O'Donnell, discussed the risks associated with types of carbon offset products, pointing to the advantages of regulated or verified offset schemes. "You don't always know what you're getting with non-verified emission schemes. If you claim a certain level of carbon neutrality or offsetting which is later proven to be incorrect, you may be liable for having made that claim. One of the advantages of verified schemes is the certainty that the abatement you are claiming has occurred," said Mr O'Donnell.
Clayton Utz has advised a number of businesses on establishing and participating in carbon offset schemes and on how claims regarding a business' carbon footprint can be made without reputational harm or legal risk.
