GE-commissioned report investigates business readiness for the low carbon future
Sydney – Australia, 16 May 2011 – Australian business readiness to move to a low-carbon economy is higher than expected but an unclear regulatory environment is hampering progress. That’s the finding of a new Economist Intelligence Unit report, commissioned by GE, released today.
The survey of 131 senior executives in Australia across a broad mix of industries found that more than half (54 percent) felt their organisation was ready for a low-carbon future, with the vast majority (70 percent) already implementing strategies to reduce their own carbon emissions. Notably, 29 percent of businesses are already modeling a carbon price into operations, with another 33 percent planning to do so.
64 percent of respondents cited an unclear regulatory environment as the biggest barrier to making further progress. This regulatory uncertainty is holding back investment, and some businesses even voiced concern that they were making poor investment decisions as a result.
When it comes to Australia’s transition towards a low carbon future, 54 percent of respondents feel that the opportunities outweigh the threats, while 24% are neutral. Some of the opportunities highlighted include improvement in customer relationships, and the development of new products and services.
Many companies are investing in resources today to create these opportunities – 38 percent have new dedicated roles and teams to identify products and services for a lower carbon economy.
Commenting on the report, Steve Sargent, President and CEO of GE Australia and New Zealand said: “Businesses are already on the move. The findings suggest a broad acceptance and preparedness for the transition to a low carbon economy. The survey found that a majority of businesses feel the opportunities outweigh threats but uncertainty is holding us back. A clearly defined carbon policy framework is a crucial element to encourage further change in business behavior.”
AGL calls for certainty
Tim Nelson, head of economic policy and sustainability, AGL said: “The longer we wait for certainty, the more bad investment decisions are being made. Energy firms will minimise their capital at risk by deploying the lowest-cost electricity generation equipment, which is generally the least efficient.”
Woolworths ahead of the curve
Woolworths is a company that is already factoring carbon price into its investments. Armineh Madirossian, Woolworths's group sustainability manager, said the company is well prepared for the new carbon-pricing scheme, having undertaken analysis of potential risks and opportunities that may arise from a low-carbon economy.
“We have to remain competitive...so we have put every possible scenario on the table and looked at what that might mean for us. It’s an opportunity to say what is right for the business, which investments make sense and which areas can bear an additional cost,” says Ms Madirossian. “We do factor in a shadow carbon price into future investments.”
Regulatory uncertainty has hampered decision making. Ms Madirossian says that more details about the proposed carbon price would definitely drive more investment into low-carbon technologies—investments that currently do not meet Woolworths’s return-on-investment hurdles.
Sydney – Australia, 16 May 2011 – Australian business readiness to move to a low-carbon economy is higher than expected but an unclear regulatory environment is hampering progress. That’s the finding of a new Economist Intelligence Unit report, commissioned by GE, released today.
The survey of 131 senior executives in Australia across a broad mix of industries found that more than half (54 percent) felt their organisation was ready for a low-carbon future, with the vast majority (70 percent) already implementing strategies to reduce their own carbon emissions. Notably, 29 percent of businesses are already modeling a carbon price into operations, with another 33 percent planning to do so.
64 percent of respondents cited an unclear regulatory environment as the biggest barrier to making further progress. This regulatory uncertainty is holding back investment, and some businesses even voiced concern that they were making poor investment decisions as a result.
When it comes to Australia’s transition towards a low carbon future, 54 percent of respondents feel that the opportunities outweigh the threats, while 24% are neutral. Some of the opportunities highlighted include improvement in customer relationships, and the development of new products and services.
Many companies are investing in resources today to create these opportunities – 38 percent have new dedicated roles and teams to identify products and services for a lower carbon economy.
Commenting on the report, Steve Sargent, President and CEO of GE Australia and New Zealand said: “Businesses are already on the move. The findings suggest a broad acceptance and preparedness for the transition to a low carbon economy. The survey found that a majority of businesses feel the opportunities outweigh threats but uncertainty is holding us back. A clearly defined carbon policy framework is a crucial element to encourage further change in business behavior.”
AGL calls for certainty
Tim Nelson, head of economic policy and sustainability, AGL said: “The longer we wait for certainty, the more bad investment decisions are being made. Energy firms will minimise their capital at risk by deploying the lowest-cost electricity generation equipment, which is generally the least efficient.”
Woolworths ahead of the curve
Woolworths is a company that is already factoring carbon price into its investments. Armineh Madirossian, Woolworths's group sustainability manager, said the company is well prepared for the new carbon-pricing scheme, having undertaken analysis of potential risks and opportunities that may arise from a low-carbon economy.
“We have to remain competitive...so we have put every possible scenario on the table and looked at what that might mean for us. It’s an opportunity to say what is right for the business, which investments make sense and which areas can bear an additional cost,” says Ms Madirossian. “We do factor in a shadow carbon price into future investments.”
Regulatory uncertainty has hampered decision making. Ms Madirossian says that more details about the proposed carbon price would definitely drive more investment into low-carbon technologies—investments that currently do not meet Woolworths’s return-on-investment hurdles.
Key findings
GE’s Australian Low Carbon Readiness Index is the first of an annual series analysing business preparedness for a low carbon future in Australia. The key findings are:
An unclear regulatory environment is holding back implementation of carbon-reduction strategies. 64% of respondents rate unclear regulatory environment as the main barrier to making further progress on carbon reduction in their company.
Despite the uncertainty, most firms (70%) do have a strategy for reducing carbon emissions. More than two thirds are reporting against specific, measurable targets to reduce energy usage but only 29% have assessed the impact of different carbon prices on their business. 31% have no current plans to model a carbon price into their planning.
More than half of the Australian businesses surveyed feel ready for the transition to a low-carbon future. 54% rate their company’s readiness as excellent or good, 34% say they are about average, with just 12% saying poor or very poor. This is markedly different from their view of the general economy’s readiness: only 15% think the Australian economy’s readiness is excellent or good, 54% think it’s poor or very poor.
Australian businesses recognise that the opportunities outweigh the threats in a low-carbon economy. 54% feel the opportunities outweigh the threats, 24% feel they are balanced, and just 22% feel the threats outweigh the opportunities in the long run.
Meanwhile, businesses are split equally on whether the opportunities created by introducing a carbon price will outweigh the risks. More than two-thirds of respondents do, however, feel that cutting Australia’s carbon emissions is principally a matter of changing corporate behaviour.
The improvement of customer relationships and the development of products and services were identified as the biggest opportunities (47% each). 34% of respondents cited risk mitigation, with a quarter suggesting that access to new markets were opportunities.
Increased cost identified as biggest risk of a low-carbon future. When analysing the threats, there were few surprises that 73% said cost, with lack of competitiveness the second biggest threat (49%) and the creation of an uneven investment environment third (42%) .
About the report
The research involved surveying over 130 Australian-based senior executives who are familiar with their respective companies’ sustainability strategy. Many of the respondents are in senior management—57% are in the C-Suite or sit on the board. In terms of size, 47% work at companies whose global headcount exceeds 1000 people. Some 45% of respondents work at firms whose global annual revenues exceed US$1bn.
The respondents work in a broad mix of industries—23% work in the energy and natural resources sector; 18% work in construction and real estate; 11% are in the telecommunications industry; 11% work in transportation, travel and tourism; 10% are in the agriculture and agribusiness sector; and the remainder work in logistics and distribution; IT and technology; manufacturing; consumer goods; retailing; healthcare, pharmaceuticals and biotechnology; professional services; and education.
The survey took place before the Australian Government announced plans for a carbon tax in February 2011.
Media contacts
Joanne Woo
Corporate Communications Director
GE
(02) 9324 7467
0409 330 731
joanne.woo@ge.com
GE’s Australian Low Carbon Readiness Index is the first of an annual series analysing business preparedness for a low carbon future in Australia. The key findings are:
An unclear regulatory environment is holding back implementation of carbon-reduction strategies. 64% of respondents rate unclear regulatory environment as the main barrier to making further progress on carbon reduction in their company.
Despite the uncertainty, most firms (70%) do have a strategy for reducing carbon emissions. More than two thirds are reporting against specific, measurable targets to reduce energy usage but only 29% have assessed the impact of different carbon prices on their business. 31% have no current plans to model a carbon price into their planning.
More than half of the Australian businesses surveyed feel ready for the transition to a low-carbon future. 54% rate their company’s readiness as excellent or good, 34% say they are about average, with just 12% saying poor or very poor. This is markedly different from their view of the general economy’s readiness: only 15% think the Australian economy’s readiness is excellent or good, 54% think it’s poor or very poor.
Australian businesses recognise that the opportunities outweigh the threats in a low-carbon economy. 54% feel the opportunities outweigh the threats, 24% feel they are balanced, and just 22% feel the threats outweigh the opportunities in the long run.
Meanwhile, businesses are split equally on whether the opportunities created by introducing a carbon price will outweigh the risks. More than two-thirds of respondents do, however, feel that cutting Australia’s carbon emissions is principally a matter of changing corporate behaviour.
The improvement of customer relationships and the development of products and services were identified as the biggest opportunities (47% each). 34% of respondents cited risk mitigation, with a quarter suggesting that access to new markets were opportunities.
Increased cost identified as biggest risk of a low-carbon future. When analysing the threats, there were few surprises that 73% said cost, with lack of competitiveness the second biggest threat (49%) and the creation of an uneven investment environment third (42%) .
About the report
The research involved surveying over 130 Australian-based senior executives who are familiar with their respective companies’ sustainability strategy. Many of the respondents are in senior management—57% are in the C-Suite or sit on the board. In terms of size, 47% work at companies whose global headcount exceeds 1000 people. Some 45% of respondents work at firms whose global annual revenues exceed US$1bn.
The respondents work in a broad mix of industries—23% work in the energy and natural resources sector; 18% work in construction and real estate; 11% are in the telecommunications industry; 11% work in transportation, travel and tourism; 10% are in the agriculture and agribusiness sector; and the remainder work in logistics and distribution; IT and technology; manufacturing; consumer goods; retailing; healthcare, pharmaceuticals and biotechnology; professional services; and education.
The survey took place before the Australian Government announced plans for a carbon tax in February 2011.
Media contacts
Joanne Woo
Corporate Communications Director
GE
(02) 9324 7467
0409 330 731
joanne.woo@ge.com
Now that we have policy in legislation, business is getting on with the job of reducing their carbon footprint and becoming more energy efficient. More than two thirds of all firms surveyed already have some sort of carbon-reduction strategy in place, and almost a third (29%) has modeled the impact on their business operations.
Firms directly affected by carbon pricing are leading the way. Of the firms which will be directly affected by carbon pricing, some 85% have a carbon-reduction strategy in place, with a further six per cent in the midst of developing one. Of the firms which will be indirectly affected by carbon pricing, only 10% have conducted such modeling.st Item
Business agrees carbon pricing here to stay. Three quarters of Australian businesses agree that it is here to stay, at least in one form or another. Almost half believe a new, better pricing regime will eventually replace the current proposed scheme, with almost two-thirds believing A$23 per tonne price is too high, and around 10% believing it is too low.
The corporate agenda has shifted towards cost reduction. While opportunities in “improving relationships with customers” (33%) and “developing new products and services” (24%) remained appealing, this year “cost reduction” (35%) has risen to the top of the corporate agenda.
Companies are investing in resources to capitalise on these opportunities. Of the companies directly impacted, more than half have set up dedicated roles or teams to identify greater energy efficiency measures internally. Around 30% have hired external consultants to help identify opportunities.
“The results demonstrate that an imminent price on carbon is working to change behaviour and drive action,” said Ben Waters, Director of GE ecomagination in Australia and New Zealand.
“This is the new business reality; doing more with less will be important this century. As with all new trends, business will react and adapt in different stages, however it is encouraging to see that starting to happen,” said Mr Waters
About the report
The research involved asking 136 Australia-based senior executives about their companies’ sustainability strategy. Many of the respondents are in senior management—40% are in the C-suite or sit on the board. In terms of size, 51% work at companies with a global headcount of over 1,000 people. Some 46% of respondents work at firms with global annual revenues in excess of US$1bn.
The respondents work in a broad mix of industries—24% work in the energy and natural resources sector; 15% are in manufacturing; 12% work in construction and real estate; 12% work in the retailing sector; 10% are in IT and technology; and the remainder work in logistics and distribution; transportation, travel and tourism; agriculture and agribusiness; consumer goods; and telecoms.
The first survey took place before the Australian Government announced plans for a carbon price in February 2011.
“This is the new business reality; doing more with less will be important this century. As with all new trends, business will react and adapt in different stages, however it is encouraging to see that starting to happen,” said Mr Waters
About the report
The research involved asking 136 Australia-based senior executives about their companies’ sustainability strategy. Many of the respondents are in senior management—40% are in the C-suite or sit on the board. In terms of size, 51% work at companies with a global headcount of over 1,000 people. Some 46% of respondents work at firms with global annual revenues in excess of US$1bn.
The respondents work in a broad mix of industries—24% work in the energy and natural resources sector; 15% are in manufacturing; 12% work in construction and real estate; 12% work in the retailing sector; 10% are in IT and technology; and the remainder work in logistics and distribution; transportation, travel and tourism; agriculture and agribusiness; consumer goods; and telecoms.
The first survey took place before the Australian Government announced plans for a carbon price in February 2011.
Australian businesses believe carbon pricing is here to stay
• 85% of directly impacted businesses are already implementing strategies
• Nearly 75% of Australian businesses believe carbon pricing is here to stay
Sydney – Australia, 26 June 2012 – Almost three-quarters (72%) of Australian firms believe the carbon price is here to stay, in one form or another, and 85% of firms directly impacted already have a carbon reduction strategy in place, according to a new business survey.
The second annual ‘Australian Low-Carbon Readiness Barometer’ from the Economist Intelligence Unit, released today and commissioned by GE, found that overall, more than two-thirds of all Australian firms have some sort of carbon reduction strategy in place, and almost a third (29%) have modeled the impact on their business operations.
The survey of 136 senior executives in Australia across a broad mix of industries found more than half of those firms directly affected have developed broad energy efficiency strategies that encompass their external partners or supply chains.
This is despite business feeling slightly less prepared for the transition to a low carbon economy than they did last year, before the Multi-Party Climate Change Committee agreement on a carbon price was announced.
"Business is getting on with the job of reducing their energy usage and therefore reducing their emissions,” said Steve Sargent, President and CEO of GE Australia and New Zealand.
“Now it is about action rather than policy. It is encouraging to see that the companies that are directly affected by carbon pricing are taking action. The big opportunity for business is in improved productivity from lower energy usage and innovation aimed at cost reduction and growth,” said Mr Sargent.
Key findings
The Australian Low Carbon Readiness Index is the second of an annual series analysing business preparedness for a low-carbon future in Australia. The key findings are:
• 85% of directly impacted businesses are already implementing strategies
• Nearly 75% of Australian businesses believe carbon pricing is here to stay
Sydney – Australia, 26 June 2012 – Almost three-quarters (72%) of Australian firms believe the carbon price is here to stay, in one form or another, and 85% of firms directly impacted already have a carbon reduction strategy in place, according to a new business survey.
The second annual ‘Australian Low-Carbon Readiness Barometer’ from the Economist Intelligence Unit, released today and commissioned by GE, found that overall, more than two-thirds of all Australian firms have some sort of carbon reduction strategy in place, and almost a third (29%) have modeled the impact on their business operations.
The survey of 136 senior executives in Australia across a broad mix of industries found more than half of those firms directly affected have developed broad energy efficiency strategies that encompass their external partners or supply chains.
This is despite business feeling slightly less prepared for the transition to a low carbon economy than they did last year, before the Multi-Party Climate Change Committee agreement on a carbon price was announced.
"Business is getting on with the job of reducing their energy usage and therefore reducing their emissions,” said Steve Sargent, President and CEO of GE Australia and New Zealand.
“Now it is about action rather than policy. It is encouraging to see that the companies that are directly affected by carbon pricing are taking action. The big opportunity for business is in improved productivity from lower energy usage and innovation aimed at cost reduction and growth,” said Mr Sargent.
Key findings
The Australian Low Carbon Readiness Index is the second of an annual series analysing business preparedness for a low-carbon future in Australia. The key findings are:
2001 Report
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About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through its global network of more than 650 analysts and contributors, it continuously assesses and forecasts political, economic and business conditions in more than 200 countries. As the world's leading provider of country intelligence, it helps executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. For more information, please visit www.eiu.com or follow on Twitter at www.twitter.com/theeiu
Media contacts
Jessica Power
n2n Communications
(02) 9213 2332
jpower@n2n.com.au
Anthony Spargo
GE
(03) 9921 685
Anthony.spargo@ge.com
About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through its global network of more than 650 analysts and contributors, it continuously assesses and forecasts political, economic and business conditions in more than 200 countries. As the world's leading provider of country intelligence, it helps executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. For more information, please visit www.eiu.com or follow on Twitter at www.twitter.com/theeiu
Media contacts
Jessica Power
n2n Communications
(02) 9213 2332
jpower@n2n.com.au
Anthony Spargo
GE
(03) 9921 685
Anthony.spargo@ge.com
Australian businesses are preparing for a low carbon economy: Economist Intelligence Unit Report
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