While participation will be voluntary, companies that have made public commitments to targets will be listed as having not reported any progress towards their goal if they do not opt-in to the scheme.
Australian businesses can achieve their voluntary targets by either directly reducing their emissions, making decisions like deploying low-emissions technologies, or offsetting emissions through domestic offset units.
Those companies which opt-in will declare their annual progress towards corporate voluntary emissions and energy targets and give a renewable electricity percentage and net emissions figure as determined by the proportion of the corporation’s emissions and purchased electricity that is covered by the voluntary surrender of eligible units.
Amid growing international pressure to commit to achieving net zero emissions by 2050, there remains cynicism within the federal government about the public commitments made by individual corporations, especially resource companies, that they are driven by good public relations rather than genuine intent.
Mr Taylor first flagged the new scheme in December, when he pledged to assist ASX 200 companies to ensure they meet their targets, but said setting the goal was the “easy part” and “doing is another”.
Mr Taylor told corporate bosses the shared challenge between business and government was to translate commitments and ambition into “real and tangible outcomes”, with the first report to be published in the first half of 2022, in line with the reporting cycle for large energy-using businesses under the National Greenhouse and Energy Reporting scheme.
“This requires a practical plan, and a commitment to transparency and accountability,” Mr Taylor wrote.
Under the consultation plan, to be released on Friday, National Greenhouse and Energy Reporting companies would provide a summary of their corporate group’s commitment – for example, net zero by 2030 – and show the percentage change of total emissions output from the previous year as an indicator of their progress against the commitment each year.
Alternatively, reporters could be asked to provide a projection of where they need to be to meet their commitment and provide an update against this each year.
The Morrison government will incentivise greater corporate voluntary action by removing barriers to increased supply of domestic offsets.
Extra resources have been provided to the Clean Energy Regulator to halve the time it takes to develop new Emissions Reduction Fund methods and to develop an exchange-traded market for Australian Carbon Credit Units, each representing one tonne of carbon dioxide equivalent stored or avoided by a project.
Rob Harris is the National Affairs Editor for The Sydney Morning Herald and The Age, based at Parliament House in Canberra