INTHEBLACK February 2022 - Magazine - Page 9
Organisations that make
net-zero commitments
require “reasonable
grounds” to support a
transition to net-zero
and the reporting
requirements that follow.
have real consequences over and above
reputational damage.
The April 2021 supplementary update to
Climate Change and Directors’ Duties
Memorandum of Opinion (the highly influential
Hutley SC and Hartford Davis opinion) notes
that companies making net-zero commitments
require “reasonable grounds” to support the
express and implied representations contained
therein. A failure to do so potentially exposes the
company and its directors to claims of engaging
in misleading or deceptive conduct.
Even for companies that are unlikely to face
hostile member resolution at annual general
meetings, the inclusion of such commitments
in annual reports or other formal documentation
may well amount to “an assertion by
management”, the veracity of which may be
subject to assurance scrutiny.
Furthermore, practical changes in managing
and reporting on an emissions reduction
trajectory, particularly where the primary
emissions are indirect, as is the case with a
services-based business, should not be
discounted. The international dialogue on climate
change has shifted from a focus on carbon
budgets consistent with the Paris Agreement, to a
focus on achieving net-zero emissions by 2050.
The shift signals an increased urgency on reducing
emissions – both direct and indirect – to zero by
all economic sectors, with an increased focus on
the full value chain of emissions.
What further reasons would there be for a
medium-sized member services organisation,
such as CPA Australia, to commit to achieving
net-zero emissions? Looking beyond the more
immediate objectives of leading by example and
ensuring members can adapt to new challenges
and opportunities, it is the idea of a shared
collective responsibility. Our actions are driven
by a deepening awareness of our reliance on
the natural environment and the imperative for
humankind to arrest and redress the cumulative
harms that now imperil us all.
“OUR ACTIONS ARE DRIVEN BY
A DEEPENING AWARENESS OF
OUR RELIANCE ON THE NATURAL
ENVIRONMENT AND THE IMPERATIVE
FOR HUMANKIND TO ARREST AND
REDRESS THE CUMULATIVE HARMS
THAT NOW IMPERIL US ALL.”
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intheblack.com February 2022 9