Free energy management diagnostic workshops for NSW manufacturers

For the past 18 months, Point Advisory has been working with the NSW Office of Environment and Heritage (OEH) to develop and pilot an Energy Management Assessment Tool for energy intensive businesses. Once the pilots are completed, the tool is scheduled for public release in the second half of 2019. The tool helps businesses understand how their approach to energy management compares to ‘best practice’, and then provides an action plan to help them make necessary improvements to remedy any deficiencies.

When it is publicly released, OEH will be offering up to $30,000 in funding to eligible businesses in NSW to implement the recommended improvements.

How does the Energy Management Diagnostic Tool and workshop work?

The Energy Management Assessment Tool is used as part of a facilitated 2-hour workshop with an energy expert. During the workshop, client representatives are asked a series of questions about their energy management practices. After the workshop an action plan is produced to help your organisation move towards best practice energy management.

OEH is providing free workshops and up to $30,000 in implementation funding to eligible businesses.

Who will be eligible for OEH support?

The free workshops and $30,000 implementation funding are available to energy-intensive businesses with manufacturing operations in NSW.

A few other key points:

  • The workshop itself is completely free and there is no obligation to undertake implementation activities.
  • Businesses wishing to proceed with implementation will be offered an incentive whereby the government would provide up to $30,000 in funding to implement key actions.
  • The funding is provided on an 80:20 basis, so the energy user would need to fund up to $6,000
  • The money cannot be used for capital expenditure and is intended to be used for improving energy management practices (e.g. by developing an energy policy, monitoring and analysing energy data, developing energy efficiency procurement guidelines, etc.).
  • Workshops are held at one of the business’ NSW facilities and take around 2 hours. Staff from energy and related roles are encouraged to attend – e.g. finance, procurement, operations, safety, health, environment and quality.
  • The workshop would involve your team collaboratively answering several questions about energy management practices in place. They would not need to prepare for the session.

*Note that this program is subject to change prior to its official launch.

How can the Energy Management Diagnostic Tool and workshop help?

The diagnostic tool will help you develop a self-sustaining Energy Management System (EnMS) that will help your business energy and money over time. It will also be useful in comparing your energy management performance relative to other businesses in the same sector.

Many companies already track energy usage on some level, and undertake projects intermittently to improve energy efficiency, however there is no unifying strategy. Development of an effective EnMS is a bespoke affair, with some companies needing to start from scratch, while other companies have existing environmental policies and systems requiring integration. Regardless, integrating an energy management system into an organisation is extremely beneficial because it requires the development of suitable systems to identify, capture, and verify energy savings and crucially, to drive continual improvement in energy performance.

 

This article was written by Ross Tunmer, Senior Manager in Energy & Climate Change at Point Advisory.

For further information you can contact Ross via email.

Climate risk series: Deriving strategic value #1

At the twenty first Conference of Parties (‘COP21’) in Paris in 2015 an agreement was reached on the imperative to limit global temperature rise to well below 2 degrees Celsius above pre-industrial levels by the end of the century. The Paris Climate Agreement has since led to increasing calls for governments and organisations to take ambitious action on climate change mitigation and adaptation. In this context, mechanisms such as the Science Based Target Initiative and the recommendations of the Task Force on Climate-related Financial Disclosures (‘TCFD’) have been developed to support organisations in understanding and embedding climate change considerations in the way they operate.

Since the release of the TCFD recommendations in June 2017, 785 organisations have committed to support the framework and 340 investors with nearly $34 trillion in assets under management are asking organisations to report under the TCFD[1]. This has translated in a strong push for action by companies to understand the exposure of their business to physical and transitional climatic impacts.

To monitor the implementation of the TCFD recommendations, the Task Force recently released its 2019 Status Report. In developing this report, the Task Force reviewed financial filings, annual reports, integrated reports and sustainability reports for over 1,100 organisations across 142 countries.

On the back of this report, and informed by other international media and our own observations through the work we do with our clients, we will publish a series of articles to discuss the progress to date, the key challenges faced by organisations and ways to overcome them. This first article discusses the importance of governance and ensuring the relevant people within your organisation understand their role in integrating climate change considerations in defining your business’ strategic direction.

Article 1: Governance

Key finding of the TCFD 2019 Status Report: “Mainstreaming climate-related issues requires the involvement of multiple functions”.

Breaking organisational silos is fundamental to truly embed climate change considerations into the business’ decision-making processes in an effective and efficient manner. Climate change can affect multiple functions within an organisation and therefore they all need to come to the table when discussing how climate-related drivers can impact (negatively or positively) the resilience of the business.

In our experience, an impactful way to bring everyone along on the journey is through tailored, carefully designed workshops. We have designed and facilitated several of these workshops and, gratifyingly, have been able to see Executive Leadership Teams, Board members and cross-functional senior management reach a common level of understanding of how different climate futures can impact their business. We found that the presence of one or more strong advocates from the most senior level of the organisation at these workshops can greatly help set the tone and drive participants to get on board and take ownership.

In some instances, we have observed a disconnection between the Board and the Executive Teams when it comes to driving the implementation of the TCFD recommendations. The Board wants to see the business respond to the challenge, but the Executive Teams may not always be able to prioritise the issue and find the best way to tackle it. This can lead the organisation to undertake climate risk work (frequently led by the Sustainability Manager) without having the full understanding and support of the Executive Team, producing outcomes that become hard to implement and embed within the organisation or that struggle to get the financial or operational support they require. While this will still allow the organisation to report on work done under the TCFD, it does not enable the business to access the strategic value that comes from truly cross-organisational scenario analysis work. It may also lead to incremental rather than transformational action, which is a missed opportunity for the organisation to think strategically about climate change and enhance its competitive edge.

Effective internal stakeholder engagement, not only at the beginning but all along the journey, is the best way to avoid this false sense of progress. This, coupled with a review of the organisation’s governance structure, processes and reporting lines, will ensure climate change is fully embedded in the governance of the organisation and decision-useful processes and disclosures can be developed.

When assisting our clients with climate risk-related governance and stakeholder engagement work, we involve our most senior staff, bringing the required strategic thinking, industry knowledge and relevant expertise to facilitate the discussion with your Board and Executive Team to achieve the desired outcomes. We are experienced workshop designers and facilitators, and bring a deep understanding of governance structures and processes gained through both in house and consulting experience. Some examples of our work to date include the design and facilitation of a climate risk workshop for Treasury Wine Estates’ Executive Leadership Team, the delivery of a climate-related physical risk assessment for a large multi-site industrial client, a TCFD disclosure gap analysis and climate risk assessment for Incitec Pivot Limited, and the development of Westernport Water’s Climate Change Adaptation Plan, amongst others.

If you would like to know more about our team and how we can help, please refer to our Climate risk & TCFD services or contact Marisa Sánchez Urrea.

This article was written by Marisa Sánchez Urrea, Senior Manager Climate Change & Energy.

[1] TCFD 2019 Status Report: https://www.fsb.org/wp-content/uploads/P050619.pdf

Upcoming event – Climate risk: The need for action – 13 March

“It is likely to be only a matter of time before we see litigation against a director who has failed to perceive, disclose or take steps in relation to a foreseeable climate-related risk that can be demonstrated to have caused harm to a company.” Legal opinion by Noel Hutley SC.

Climate-related risks and opportunities have become an issue for both investors and Boards.

In 2017, the G20’s Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) issued a set of recommendations providing structure and consistency for management and disclosure of climate-related risks. Companies are now looking to implement these recommendations in their reporting frameworks.

Climate litigation is also increasingly becoming a real risk with proceedings now being taken for lack of assessment or non-disclosure of climate risk.

In navigating assessment and disclosure of climate- related risks and opportunities, companies will face a number of challenges. With these challenges in mind, Norton Rose Fulbright, Point Advisory, and the Future Business Council have developed this practical session for participants which will cover:

  • current and emerging litigation risks relating to climate change and climate related disclosure
  • the investment community’s perspective on how climate risks should be addressed
  • how to build a business case to understand and elevate this issue within your organisation, helping you better communicate with and bring together Board members, senior executives, risk professionals, legal teams, and sustainability experts
  • AGL’s experience in navigating the TCFD recommendations and producing their first TCFD report.

Please join us for a discussion on why climate risk should be part of your business agenda and how you can make it happen.

Speakers:  

Elisa de Wit, Partner, Norton Rose Fulbright

Christophe Brulliard, Principal Consultant, Point Advisory

Emma Herd, CEO, Investor Group on Climate Change

Theo Comino, Manager Greenhouse and Sustainability, AGL Energy, and

James Wright, Chief Executive Officer, Future Business Council

Date:

Wednesday, 13 March 2019

Time:

4:45 pm – Registration

5:00 pm – Seminar starts

7:00 pm – Seminar ends

7:00 pm – 8:00 pm – Networking drinks

Where:

Norton Rose Fulbright

Level 15, RACV Tower, 485 Bourke Street

Melbourne, VIC

View on map

RSVP here.

Case Study: The Victorian Department of Health and Human Services’ Emissions Reduction Plan

The Victorian Department of Health and Human Services’ Emissions Reduction Plan

The Victorian Climate Change Act 2017 sets a state-wide emissions reduction target of net zero emissions by 2050, and a timeline of interim targets set at five year intervals. The Act requires government departments to contribute emissions reductions by setting pledges for each five-year period, with the first period covering from 1 January 2021 to 31 December 2025.

As the government entity with responsibility for Victoria’s public hospitals, an extensive portfolio of public housing, and sport and recreation services, the Department of Health and Human Services has a large and complex emissions profile that is material in the context of Victoria’s whole-of-government emissions inventory. To support its contribution to the whole-of-government emissions reduction efforts, DHHS engaged Point Advisory (and partnering organisations Norman Disney Young and Moreland Energy Foundation) to assist in developing a department-specific Emissions Reduction Plan.

The development of this plan (which has been designed to be iterative as Victoria progresses with setting interim targets) involved the calculation of a whole-of-department emissions inventory and modelling of a “business-as-usual” trajectory to 2050, and the identification of potential opportunities to reduce emissions across the department’s operations. The opportunities identified across health, housing, corporate and sport and recreation services were then evaluated for their capital costs and abatement potential and flexible emissions reduction pathways to 2025 and 2030 were modelled for the department’s consideration.

Subsequent iterations of this Emissions Reduction Plan will aim to define the scope and direction of the department’s emissions reduction pathway, and its first mandatory pledge under the Victorian Climate Change Act.

To see some of the other work we’re doing in the net zero space, check out our interactive online net zero model at (works best in Google Chrome browser). For further information, contact Charlie Knaggs.

Point Advisory welcomes Farema Yazdi

Point Advisory welcomes Farema Yazdi as a Consultant in our Melbourne team.

Farema has experience in qualitative research, data management and analysis in the climate change field, predominantly gained through her Master’s thesis and conducting research for local government and non-profit organisations. Farema has also conducted research for a UN Global Compact for Cities report which sought to inform climate adaptation policy in Victoria, and worked with the Climate Reality Project in Canada to assist with the research, development and launch of the National Climate League ahead of COP24.

In her Master’s thesis, Farema analysed the interactions between climate change mitigation and adaptation in the context of Melbourne’s city resilience. Farema is interested in the ways in which contributions of mitigation can be strengthened in resilience theory and practice, particularly in the Middle East. She hopes to eventually pursue a PhD in this field.

Outside of work, Farema enjoys all things art, culture and bouldering.

Farema can be contacted here.

Introducing our online Emissions Reduction Pathways tool

We have been working a lot lately on ‘net zero’ emissions strategies and emissions reduction plans for government and corporate clients. Through this work, we have seen the value of giving stakeholders the ability to visualise emissions trajectories and to play around with different abatement opportunities to understand the different pathways to emissions reductions.

Based on this experience, we are pleased to release our new Online Emissions Reduction Pathways tool, which can be viewed here.

The tool allows users to explore different scenarios via an intuitive and attractive interface. It helps distill complex concepts and calculations into a clean and intuitive format. For practitioners, the tool is relatively easy to update via an underlying spreadsheet (provided a carbon inventory and associated emissions reductions opportunities have been calculated).

If you are interested in developing your own version of the tool or talking further about emissions reduction strategies, contact Charlie Knaggs or Christophe Brulliard.

The Seven Steps of Climate-related Scenario Analysis

Planners and decision makers are often required to develop strategies in the face of an uncertain future. Climate change adds an additional (and substantial) layer of uncertainty to the mix.

Scenario analysis is an established method for developing and stress testing management responses under such conditions of deep uncertainty. Effectively a ‘what-if?’ test, each scenario presents a combination of plausible and internally consistent future events to planners and decision makers. A set of scenarios is used to span a range of possible futures that are outside the timespans of day-to-day decision-making.

In June 2017, the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (FSB TCFD) suggested that “organizations should use scenario analysis to assess potential business, strategic, and financial implications of climate-related risks and opportunities…”. The FSB followed this with a Technical Supplement on the use of Scenario Analysis.

Point Advisory have found the FSB’s technical supplement to be useful in application. However, we have also found that some organisations have difficulty in translating the FSB’s guidance into tangible steps. To assist, we have developed the following seven-step approach:

  1. Establish the organization’s context: Scenarios should be relevant to the organisation’s environment, including markets and competition, supply chains, etc. The planning horizons will be important in defining scenarios’ own milestones.
  2. Understand current governance: Scenarios will facilitate decision making; scenario development therefore need to be cognisant of how decisions are made.
  3. Assess climate-related risks and opportunities: This step could be the subject of its own article (or text book). Climate related future scenarios will modify these risks, but it is important to have a solid starting point and understand the risk areas to make sure scenarios have a higher level of resolutions within those areas.
  4. Develop the scenario set: This is the crux of the matter. Based on research and consultation, a set of scenarios can be defined. To ensure they are useful all assumptions should be clearly stated and then reviewed by key internal participants. The resulting scenarios should be plausible, internally consistent, relevant and challenging.
  5. Apply the scenarios: The scenarios are but a tool. Planners and decision makers use them to explore the implications of scenarios on decisions, strategies or objectives. This is the “stress test” and the key question to be asked is: How would existing (or proposed) strategies, decisions or actions perform under each scenario?
  6. Use the results of scenario analysis to influence strategic planning or to improve existing management responses. This is best done by embedding insights from the previous steps into processes, policies and the culture of the organization.
  7. Close the governance loop: Monitor, review, document, disclose and repeat as appropriate.

For further information please contact Christophe Brulliard and Ben Sichlau.

Upcoming Melbourne event: Journey to a net zero world…

Upcoming event: Journey to a net zero world…

Can you imagine a net zero emissions world? What does it look like? And how do we get there by 2050?

To achieve the Paris Climate Agreement commitments and have a chance of keeping global temperature rise below 2°C, we basically need to achieve ‘net zero’ emissions globally by 2050. So it’s not surprising that we’re seeing a huge increase in interest in the net zero concept – from defining emissions reduction pathways through to setting science-based targets and organisational carbon neutral commitments.

But what does net zero really mean? What are our state and local governments doing to reduce their fair share of emissions? How is the Australian private sector taking on the challenge to stay ahead of the game and remain competitive? And what steps can individual organisations take to start the journey to net zero?

Come and join us for a drink, a snack and a lively discussion about these questions. Expect interesting insights from both the public and private sector and some good examples on how the net zero concept can be translated into action.

Who will be there? The following panellists will share with you their insights on their work towards net zero emissions:

What will we talk about? We will create a forum for both government and private sector attendees to discuss the transition to a net zero economy. Our panellists will discuss:

  • Victoria’s legislated net zero target and the Climate Change Act 2017
  • how they are taking on the challenge and putting measures in place to contribute their fair share to reach net zero
  • the main barriers and challenges faced
  • key lessons learnt as they act on their commitments.

We’re expecting an interactive discussion, and will allow plenty of time for networking and continuing the conversation over a glass of wine.

Event details: The event will be held at Point Advisory’s offices in Melbourne’s CBD from 5pm to 7.30pm on Thursday 19 April. Drinks and nibbles provided.

Please click here to visit our Eventbrite site to RSVP.

Towards zero emissions by 2050

Towards zero emissions by 2050

At the twenty-first session of the Conference of the Parties (‘COP21’) to the United Nations Framework Convention on Climate Change (‘UNFCCC’) held in Paris, the world agreed to a global goal to hold average temperature increase to well below 2°C and pursue efforts to keep warming below 1.5°C above pre-industrial levels. To achieve the “well below 2°C goal”, the concentration of greenhouse gases (‘GHG’) in the atmosphere need to be kept under control, which means that the world has to operate within a given remaining ‘budget’ of carbon emissions. Currently we have a carbon budget of 850 billion tons of CO2 to have a likely chance (estimated as a 2/3 probability) of staying below 2°C. If we want to stay well below 2°C, we need to do better than that, and do it quickly. In this context, the Paris Agreement highlights the need for Parties to reach net zero emissions by 2050.

Australia ratified the Paris Agreement on 10 November 2016. Our Nationally Determined Contribution (‘NDC’), dated August 2015, sets an economy-wide target to reduce GHG emissions by 26 to 28 per cent below 2005 levels by 2030. This target has been rated as “insufficient, and with a level of ambition that, if followed by all other countries, would lead to global warming of over 2°C and up to 3°C” by the latest Climate Action Tracker assessment.

However, Australian state and local governments are taking further climate action to contribute their fair share to the world’s path to net zero emissions by 2050. Queensland has been the latest state government to announce their climate agenda with its Queensland Climate Transition Strategy, that includes a commitment for 50% renewable energy by 2030, net zero emissions by 2050, and an interim emissions reductions target of at least 30% below 2005 levels by 2030. This positions Queensland alongside South Australia, Australian Capital Territory, Victoria, New South Wales, and Tasmania in setting targets or aspirational goals of net zero emissions by 2050.

State Key commitments
Victoria
  • Net zero greenhouse gas emissions by 2050
  • Requires the government to set five-yearly interim targets for the period 2020 to 2050
  • Reduce Victoria’s emissions by 15-20 per cent below 2005 levels by 2020
  • Reduce emissions from government operations by 30 per cent below 2015 levels by 2020
  • Renewable energy generation targets of 25 per cent by 2020 and 40 per cent by 2025
Australian Capital Territory
  • Net zero carbon emissions by 2050
  • Interim emissions reduction targets
  • Renewable energy target of 100% by 2020
South Australia
  • Net zero emissions by 2050
  • Adelaide to be world’s first carbon neutral city
  • Achieve $10 billion in low carbon investment by 2025
  • Improve energy efficiency of government buildings by 30 per cent by 2020
Queensland
  • Net zero emissions by 2050
  • 50% renewable energy by 2030
  • Interim emissions reductions target of at least 30% below 2005 levels by 2030
New South Wales
  • Aspirational objective of achieving net-zero emissions by 2050
Tasmania
  • Aspirational long-term target to achieve zero net emissions by 2050

At Point Advisory, we have recently completed work for the ACT government to develop their net zero emissions trajectories at the broad sectoral level (stationary energy, waste and land use). We are also working with the Queensland government on their next demand management and energy efficiency strategy.

Local Governments are also making progress in Australia. Some examples of councils´ emissions reduction commitments are as follows:

Additionally, Melbourne and Sydney are part of C40 Cities, a network of 91 cities across the world committed to addressing climate change by reducing emissions and climate risks, while increasing the health, wellbeing and economic opportunities of their citizens. Together C40 member cities combined community emissions represent 2.4 Gt of CO2-e. During COP23, 25 cities, including Melbourne, pledged to develop climate action plans before the end of 2020 to deliver on their share of emissions reductions required to reach net zero emissions by 2050. New York City and Paris have already delivered on this commitment. Melbourne is on track to develop its climate action plan and has also been recognised as a lead of the C40 Low Carbon Districts network, with Fishermans Bend and Arden Macauley as examples of low-carbon, sustainable, and energy efficient neighbourhoods. Point Advisory is currently finishing developing a net zero carbon strategy for the Fishermans Bend Taskforce, which will inform the next stage of work to refine the climate action plan for the district.

Businesses are also stepping up and leading the way to accelerate the transition to a low carbon economy. COP23 witnessed commitments of unprecedented magnitude, such as Microsoft’s pledge to reduce its operational carbon emissions by 75 per cent by 2030, against a 2013 baseline – this has been estimated to avoid 10 million metric tons of carbon per year, which is equivalent to zeroing out the emissions of the City of Rome. Danone also saw its science-based target to become carbon neutral by 2050 getting approved by the Science-Based Targets Initiative (SBTi) during the conference, and so did the Singtel Group, becoming the first company in Asia (excluding Japan) to have its carbon reduction targets approved by the SBTi.

Over 630 companies around the world have made more than 1,000 climate-related commitments through the We Mean Business Coalition’s Take Action campaign. This includes commitments such as adopting science-based emissions reduction targets or joining the Low Carbon Technology Partnerships Initiative to achieve emissions reductions that lead to a net zero emissions economy by 2050.

Whilst setting targets does not directly reduce emissions, businesses’ pledges are sending a clear signal to the market that society is ready to embrace net zero and that regulatory uncertainty needs to be reduced to ensure investment stability and smooth economic growth.

Australian businesses are also playing a role. Point Advisory assisted Westpac to develop emissions reduction targets in line with SBTi criteria. Infigen Energy, Origin Energy, Teachers Mutual Bank, Australian Ethical Investment and Investa have also committed to setting science-based targets. Other Australian companies, such as AGL Energy, Energy Australia, Wesfarmers annd Telstra have shown their support to a 2050 carbon emissions reduction target for Australia that is consistent with the Paris Agreement to aim at net zero carbon emissions by 2050.

As climate action plans and emissions reductions targets get approved and communicated, the focus will shift to whether governments and businesses are in fact delivering on those commitments. To this effect, at COP23, countries agreed on the design of the Talanoa Dialogue, a framework to take stock of the collective progress towards net zero emissions of the Parties to the agreement. This will not only provide insight on the actual tons of emissions that have been removed from the atmosphere so far, but also set the scene for governments to up their NDCs under the Paris Agreement kicking off in 2020. The Australian federal government will then have another chance to truly embrace the challenge of decarbonising Australia’s economy, take on a leading role and unlock the significant economic opportunities the Paris Agreement could offer for Australia.

Draft NCOS Buildings & Precincts open for consultation

The Department of Environment and Energy has recently released drafts of two new draft standards for industry consultation: the National Carbon Offset Standard for Buildings and the National Carbon Offset Standard for Precincts. To see the draft standards and provide feedback, click here.

In addition, the Department (along with the NABERS team and the Green Buildings Council of Australia) are hosting a webinar on the draft NCOS for Buildings standard on Friday 16 December from 11.30am to 12.30pm. Those wishing to attend should register through the GBCA Event Calendar.

These voluntary standards will enable new and existing buildings and precincts to gain accreditation to declare carbon neutrality to the NCOS standard, and to use the highly-regarded NCOS trademark as a public statement of the integrity of their claim.

Point Advisory is very pleased to have assisted the Department in the development of these standards. We believe they are an important step in helping to drive the built environment sector towards the significant emissions reductions that we know are possible.

To discuss any aspect of NCOS or carbon neutrality, email Christophe Brulliard.