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Carbon-exposure survey of Aus companies: BHP, Rio, BlueScope, Qantas account for half top-200 emissions

Posted by gmarkets on 27 September, 2007

A survey of the carbon exposures of Australia’s top 200 listed companies conducted for institutional investor VicSuper found three out of four did not disclose comparable emissions data, wrote Peter Hannam in The Age (26/9/2007, p.2).

The dirty four: Analysis of available infor­mation for VicSuper by consult­ants Trucost found that just four – BHP Billiton, Rio Tinto, BlueScope Steel and Qantas – accounted for almost half the top 200 companies’ direct emis­sions. The report argued investors also needed to understand com­panies’ indirect emissions, par­ticularly those resulting from their electricity use. About 90 per cent of AMP’s carbon footprint, for instance, was the result of such indirect emissions.

Cement supplier the worst: The most exposed company was cement supplier Adelaide Brighton. Assuming a price for carbon dioxide-equivalent of $28.81 a tonne (the price of European carbon trading as of March 31), the company’s carbon cost amounted to 52 per cent of its earnings before interest and tax, 12 per cent of sales and 5 per cent of market value. Still, only about one in four companies had carbon exposure greater than 1 per cent of annual turnover, the report found. “We are trying to get people to see that responding to this problem is not going to bankrupt Australia,” said Bob Welsh, VicSuper’s chief executive.

An investor concern: Investors were keen to understand what physical risks companies faced to their returns, how government policies, including emissions trading, would affect them, and what strategies they were taking to reduce exposure or grab opportunities, Welsh said. “Our interest is not to just pick the stocks but get all of the companies in the market to reduce their risk,” he said. The fifth Carbon Disclosure Project report, also released yes­terday, gave a mixed picture of Australia’s performance.

The Age, 26/9/2007, p. 2

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