How the Energy Transition Presents Opportunities for Australian Organisations

June 4, 2024 - 5 minutes read

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The pressure to reduce carbon emissions in a business or not-for-profit could seem like a high risk or a threat, but it needn’t be. In fact, Australia’s energy transition can be transformed into more of an opportunity. Here’s how!

Transitioning to net zero

The Australian government has committed to net zero carbon emissions by 2050.

The government is also committed to improving the quality of climate-related financial disclosures. What this means is that some large companies will be obligated to report information regarding their climate-related activities, starting 1 July 2024.

The disclosure requirements include information on emissions from operations (Scope 1), emissions from energy purchased and used (Scope 2), and indirect emissions (Scope 3). Other disclosure requirements include climate strategies, targets and plans, and responses to transition risks and opportunities.

But even though small to medium enterprises won’t have mandated climate-related reporting requirements, they can still play a part in this by improving their sustainability and reducing their carbon footprints, and by developing transition plans and strategies.

This might include switching to renewable energy, paying for carbon offsets, encouraging greater active transport at work, reducing car and air travel, and plenty more.

However, a 2023 survey by NAB indicates that many businesses are not keeping up with the pace of change. The survey found that only 26% have developed a strategy towards achieving net zero, and that 20% are making no effort to reduce emissions. In addition, of the biggest carbon emitters (including electricity, mining, agriculture and transport), 72% have no net-zero strategy at all.

There are benefits!

But taking steps to reduce emissions is not all about the risks, costs and efforts involved. Doing so can also come with considerable benefits for organisations of all types and sizes.

This includes improved reputation and ability to attract customers. For example, according to research by McKinsey & Co, up to 75% of survey respondents said they consider sustainability when making purchases. Over the years there has also been other research with similar findings.

Other potential benefits include increased capacity to attract investment, reduced staff attrition, greater business resilience, and lower costs through less use of materials, energy and other resources.

What about Not for Profits?

In a similar way to small businesses, NFPs can also do their bit by improving their sustainability.

Sustainability is often defined as having a positive effect on the environment and on society in general. So, to be more sustainable in this sense, businesses and NFPs should aim for a positive impact in these areas.

But sustainability is also about long-term thinking – keeping your organisation resilient and continuously thriving. This includes ensuring you are meeting your purpose, and that your organisation is financially healthy.

The best way to start with improving environmental sustainability is to address your current carbon footprint, assess the risks and opportunities that come with reducing your emissions, and take steps to embed sustainability into your organisation’s vision and operations.

Some simple steps that NFPs can take to make a start this process include:

  • reusing and recycling where possible
  • buying local (reduces delivery requirements)
  • reducing use of throwaway items (e.g. single-use plastics, disposable coffee cups, coffee pods)
  • turning off lights and appliances when not in use
  • reducing printer use
  • reducing or eliminating unnecessary car trips
  • switching to low emissions alternatives such as electric vehicles and solar panels, and
  • office redesign for improved energy efficiency.

Taking these steps can not only help reduce your carbon footprint but also potentially your costs in terms of energy and other resources and delivery costs.

Importance of assessing the risks and securing insurance cover

It’s true that these shifts tend to come with a degree of uncertainty, however. This makes it essential to ensure you have strategies in place to manage the impact of climate change on your church or charity.

Adequate insurance cover is also crucial to transfer the risks where possible and to financially protect your organisation.

To further discuss your climate-related risks and insurance needs for your church or charity, please call 13 000 FAITH or send us an email.

Written by Tess Oliver



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