Companies in Japan, Malaysia and India are the most concerned in the Asia Pacific region about the impact of climate change on their operations.
But they are also among the most active in meeting the challenges head on. And they are turning what could be a negative into a competitive advantage.
Presenter: Karon Snowdon
Speakers: Hugh Grossman, executive director, Reputex; Greg Combet, Australian climate minister
SNOWDON: Joining forces, the ratings agencies, Standard & Poor's and Reputex found 90 per cent of respondents to a recent survey were very concerned about the impact of climate change on their industry.
More than half also view the risks associated with new regulations as serious.
But many are doing something about it, getting their own mitigation schemes in place even before government regulations.
Hugh Grossman is the executive director for Reputex, a research company which specialises in analysing carbon risks.
GROSSMAN: I think one of the interesting things to come from this is that the direct cost from emissions trading itself will be relatively low. In fact, the survey finds that of the entire cost only 3 per cent is likely to come from that function, from carbon trading. Whereas up to 97 per cent of carbon will come from indirect sources, so things such as the increasing price of electricity or the increasing cost of supply chain costs. So, what does that mean for pricing their premiums and all those sorts of things? I think the companies that are engaging now are potentially in a better position to actually create that value or mitigate the risk. And I think real estate is a good example of one of those industries that is taking advantage of the opportunities in the market right now with green buildings and those sorts of things.
SNOWDON: The report found Japan, China and South Korea produce the most carbon emissions in the region, with utilities like electricity and mining topping the list of industries.
New Zealand already has a mandatory emissions trading scheme, while Japan, Malaysia and South Korea are preparing for them.
In Australia's case, the minister for climate change, Greg Combet, says the government is committed to setting a carbon price quickly, along with other priorities of supporting renewable energy and energy efficiency nationally.
COMBET: This is an example of an economic reform that we need to undertake. One that will help with the long term international competitiveness of this economy and also help in relation to the fairness of our society, I believe.
SNOWDON: Greg Combet says there's been no decision on whether an emissions trading scheme or carbon tax will be Australia's preferred mechanism.
But he added the longer the delay on setting a carbon price, the bigger the economic cost and business wants an end to policy uncertainty.
COMBET: We haven't ruled in or ruled out any particular options at this stage. We will have a genuine look at what domestic economic reform, what mechanism can be implemented in relation to what consensus can be built in order to start the hard work of cutting emissions and getting a carbon price into the economy. And we know that in China and many other countries a lot of steps are being taken to reduce emissions and to invest in clean energy and that's something that we need to do in our own economy and that was one of the points I made in my address today.
Hugh Grossman says his study supports the minister's view that industry accepts the inevitability of climate change schemes.
GROSSMAN: That is a core finding here that 12 months ago the market was in a very different place - how do we avoid this cost, what can we do to lobby against a carbon trading scheme? Whereas now, I think, there is this inevitability, companies aren't lobbying as hard against a carbon trading scheme anymore. In fact, I think the market has almost switched to lobbying for it. So, I think surely we're at the point where we're likely to see that uncertainty lifted to a certain degree. I think the market is ready for that decision to be made.