Top companies leaders in pollution, too

GREENHOUSE gas emissions by Australia's top 200 companies surged by more than 10 per cent year-on-year, prompting fresh calls for a price on carbon to combat growing emissions levels.

As Federal Parliament resumes this week with the government to put its carbon pollution reduction scheme before the Senate again, the superannuation fund VicSuper's Carbon Count 2009 report, to be published today, shows the companies listed on the ASX200 emitted 268.7 million tonnes of greenhouse gas in the 2007-08 financial year - 25.3 million tonnes higher than in the previous year.

Six companies accounted for almost 65 per cent of direct emissions over the period. Rio Tinto, BHP Billiton, BlueScope Steel, Qantas, AGL and Wesfarmers directly emitted more than 97.5 million tonnes of carbon equivalent.

Rio's emissions doubled year-on-year, hitting 30.3 million tonnes for the 2007-08 financial year, making it the single largest emitter of greenhouse gas. The increase was largely due to its acquisition of the Canadian aluminium producer Alcan.

BHP's emissions rose 15 per cent due to a sixfold increase in reported methane emissions.

The metals and mining sector contributed the biggest rise in direct gas emissions - up 28 per cent.

The Carbon Count report found a large rise in the number of companies reporting adequate data. However, those reporting in accordance with the Greenhouse Gas Protocol, an accounting standard developed by the World Resources Institute and World Business Council for Sustainable Development, made up just 8 per cent of the ASX200.

A carbon price of $10 a tonne would result in a cost of $2.69 billion this year, or 0.37 per cent of turnover from ASX200 companies.

Danielle Welsh, VicSuper's manager of sustainability investment, said a carbon price was the only way to allow the market to find the most efficient way of reducing emissions.

''We really need to implement a cap-and-trade system in Australia,'' she said. ''Without a market mechanism in place, we are not going to achieve any meaningful reductions. The report shows that despite the increased focus on emissions, they will continue to rise unless we have such a system in place.''

Ms Welsh said the pledge by the government last week to cut emissions by 5 per cent by 2020 was ''inadequate'' in reducing the risks of climate change for investors.

''As an institutional investor, we don't see that as enough,'' she said. ''Climate change is an investment risk, but unlike other investment risks it is very hard to reduce. You can't diversify away from the climate change risk; climate change doesn't obey borders or industry sectors.

''We are advocating an interim target of between 25 and 40 per cent, based on the science. This isn't an ethical thing for us. It isn't a feel-good thing. It is about helping our members build their wealth for retirement.''