How to resolve AdBlock issue? No CO2 and no BS: Carbon Reduction Institute helps business leaders ‘get real’ about Net Zero
By Leon Gettler, Talking Business >>
TO COMBAT climate change, the Australian Government has set a target of Net Zero for Australian companies.
But companies are struggling with their climate reporting.
An audit conducted by the Carbon Reduction Institute found that very few were managing to do it.
Rob Cawthorne, CEO of the Carbon Reduction Institute, believes companies are not ready for Net Zero.
Mr Cawthorne said the reporting that is currently occurring under the Australian Assurance Standards Board, or under the Corporations Act, is “probably far from what was desired by the legislation”. 
He said the last report showed an improvement in 17 of 33 organisations reviewed and “one organisation managed to go backwards”.
“Many organisations are asking for better supplier information while at the same time, not publishing it themselves,” Mr Cawthorne told Talking Business.
“It becomes a circular loop if that occurs.”
Quality carbon disclosure system is the key
Mr Cawthorne said the Carbon Reduction Institute was not looking, so much, at the organisations’ positions on climate change but on the quality of their disclosure,
“Across with these disclosures, there might be half a dozen documents to get to the actual information,” he said.
“So they might publish a climate inventory in their disclosure report and then you might find a spreadsheet somewhere else on their web page that actually has the fine detail of what’s included in that inventory.
“The headline claim made doesn’t match,” Mr Cawthorne said.
“Another major issue is Net Zero claims that are impossible. You might have a Net Zero claim to achieve Net Zero by 2040, but it is reliant on the government achieving a Net Zero by 2050 and that, of course, becomes an impossible pathway.”
Mr Cawthorne also said the complexity of the reports was a major factor.
“The fact that you’ve got to read to get to the actual information – five, six, seven reports to get the actual detail. No consumer, no reasonable investor can do these, so the disclosures limit their usefulness," he said.
“Its bigger issues are complexity, impossible pathways where you can’t achieve it even though you’re making the claim and claims based on highly deficient data.
“And supplier specific reliance is also a significant issue popping up.”
Carbon accounts are just the starting point
Mr Cawthorne said organisations needed to start with comprehensive financially-reconciled carbon accounts.
“If your accounts reconcile to your financials, they are likely to be complete,” he said.
“When there are deficiencies between the two, completeness becomes impossible, comparison becomes impossible and the decision usefulness of the data becomes not decision useful.
“I, as an accountant ,can’t take that data and work out what the supplier specific emissions factors are. If the data becomes more comprehensive, I then can.”
Mr Cawthorne said this was difficult for investors and government bodies.
“Understanding carbon accounting and then applying that to a financial report for someone who doesn’t have significant experience and skills in this area is maybe impossible – or close thereto.”
Mr Cawthorne said, on the other hand, a lot of that can be handled with artificial intelligence (AI).
He said his means businesses are nowhere near ready for Net Zero. 
Mr Cawthorne singled out Telstra and South 32 as the only organisations in Australia whose reporting was useful.
“I’m talking about two companies that reach the rating we would call reasonable,” he said. "Across the 33, or there’s 48 we’ve reviewed, they’re the only two that get to decision useful.”
Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness
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