A year-long collaboration between the peak body for energy generators and retailers, the Australian Energy Council, and the University of Adelaide has produced new guidance to uplift climate disclosure reporting across the energy sector.
The Australian Energy Council's members worked closely with Dr Tracey Dodd, a governance and climate policy expert, and Professor Melissa Nursey-Bray, to develop the guides as part of the University's sustainability showcase initiative.
The work, a national first, will be showcased as part of the Governance Institute of Australia's Leadership Conference in Sydney today.
The project has clarified some of the more complex aspects of Australia's new climate disclosure regime, which came into effect this year. Under the regime large organisations must comply with Australian Sustainability Reporting Standard AASB S2 Climate-related Disclosures, which is designed to enhance climate transition planning across the economy.
"Compliance with AASB S2 is a significant uplift in corporate disclosures related to climate change and compliance with these standards has been established as a duty of company directors. While some energy companies have prior experience preparing public climate scenario analysis, for most this is a new exercise", Dr Dodd said.
The two guides are:
- Emissions Reporting Guide - Establishes an industry approach to scope 3 emissions reporting in the electricity sector, with a focus on accuracy and avoiding double counting. It is intended as a living document that will evolve alongside corporate climate disclosures.
- AASB S2 Scenario Analysis Practice Guide - Provides a framework to help energy companies assess climate risks and opportunities under different scenarios, including steps to build analysis, test assumptions, and recognise limitations.
"This has been an important piece of work and a very successful collaboration. Through participation in this project, electricity companies have gained a better understanding of different industry practices, their strengths, and limitations when it comes to climate transition planning. This knowledge sharing will encourage more robust climate resilience," Australian Energy Council's Project lead, Rhys Thomas said.
"Businesses that apply healthy scrutiny of material assumptions and variables will find it easier to integrate evolving scenario analysis, re-emphasising the benefits of undertaking early and robust climate resilience assessments", Dr Dodd added.
In the next stage of its collaboration with the University of Adelaide, the AEC is working with Dr Dodd to develop a training module to support climate competency in business.
The AEC would like to thank Professor Melissa Nursey-Bray at the University of Adelaide for sponsoring the project as part of the University's sustainability showcase initiative; Dr Tracey Dodd, as well as Vivian Li and Nicholas Marzohl for their research support; Alinta Energy's Siraj Jardine, Chair of the AEC's Climate Disclosure Sub-Working Group, and all Sub-Working Group members for their contributions to this project and ongoing facilitation of the working group.
About the Australian Energy Council
The Australian Energy Council is the peak industry body for electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. AEC members generate and sell energy to 10 million homes and businesses and are major investors in renewable energy generation. The AEC supports reaching net-zero by 2050 as well as a 55 per cent emissions reduction target by 2035 and is committed to delivering the energy transition for the benefit of consumers.
