Financial Implications of Climate Change

As part of managing the financial implications of climate change, IPL has resources in place to manage the risks and opportunities associated with carbon pricing. Our Vice President of Sustainability has accountability for sustainability strategy, advocacy and communications. The role approaches sustainability from a commercial perspective, focusing on actions that create economic value driven by a clear strategy. This position reports to the Chief Financial Officer and is charged with providing periodic updates to the Board's Health, Safety, Environment and Community Committee on carbon regulation and other sustainability risks and opportunities.

Risks and opportunities associated with climate change

In 2010, as part of the process of developing our sustainability strategy, a small cross-business risk exposure team identified and prioritised sustainability risks and opportunities across the supply chain using a risk impact assessment process.

From this process, potential sustainability risks to be managed and opportunities to be leveraged, including carbon regulation, have been considered at a high level by Corporate and Business Units in creating and acting on business strategies. In particular, risks and opportunities associated with climate change are listed in the table available here.

Australian carbon pricing scheme

We are currently focusing on the risks and opportunities associated with the carbon pricing scheme that will be introduced in 2012.

IPL has manufacturing operations across Australia, employing approximately 1,500 people. We are defined as a large emitter under the Australian Government's National Greenhouse and Energy Reporting system, emitting 1.2 million tonnes of greenhouse gas a year from current operations. Some 95% of our Australian greenhouse gas emissions relate directly to our Australian manufacturing sites.

With the commissioning of the new ammonium nitrate facility at Moranbah, Queensland, Australia in 2012, our annual emissions will increase.

During FY2010/11 we met with representatives of the Australian Government, including the Department of Climate Change and Energy Efficiency and made submissions on the Government's Clean Energy legislative package. We were also represented in submissions by the Business Council of Australia and other industry bodies.

IPL recognises that the Australian Government is committed to reducing Australian greenhouse gas emissions and helping shape a global solution:

• in this context, IPL supports a well-considered and appropriately designed carbon trading scheme;
• in the absence of an international framework, any pricing mechanism must provide assistance to trade-exposed commodity businesses; and 
• lack of appropriate assistance will result in the offshore migration of manufacturing investment and jobs to countries without domestic carbon regulation, which will not achieve a net reduction in global emissions.

We support, in principle, the Carbon Farming Initiative (CFI), legislation for which was passed by the Australian Government in August 2011. However to generate maximum carbon offsets, we believe the CFI must create economic value for farmers.

We are addressing the opportunities associated with a carbon tax by developing new products and services to help our customers reduce their emissions and meet changing consumer behaviours. For example, our fertiliser business in Australia formed a group called the Agronomy Community, with a specific focus on environmental issues such as soil carbon management and the implications of a price on carbon for farmers. Our explosives business is working on a range of opportunities, including projects such as new explosives that minimise post-blast NOx fumes. More information is available in both the 'Be Responsible' and the 'Use Less' sections of this website.