Companies have until the end of August to register under the National Greenhouse and Energy Reporting Scheme, but Ernst & Young partner and climate change leader Lorraine Stephenson cautions against leaving it until the last minute.

Registering for NGERS, which will impose reporting obligations on companies that have crossed its emissions or energy use thresholds, can be a complicated process and "is probably taking longer than a lot of companies had anticipated", she told CE Daily.

Companies must structure their reporting lines to comply with NGERS requirements, which won't always match the way they have previously reported under various internal or external regimes, she cautions.

As well, many companies' corporate structures will oblige them to lodge separate NGERS registrations for different reporting lines.

That means it's "worthwhile" to start the registration process now, even if your company hasn't finalised its thinking on reporting procedures, because the Department of Climate Change will probably be able to help resolve any remaining issues, she says.

Registration will also enable companies to check that their reporting framework is compatible with the OSCAR online reporting tool that registered entities will use to supply their emissions and energy use data to the Government.

'Companies can see the value'

Despite the complexities, most companies recognise the potential benefits of NGERS, Stephenson says.

"Companies are seeing the value in terms of going through this process.

"It's quite rigorous. It's very comprehensive. But the data ... gives decision-makers within their companies a lot more confidence about not only their current emissions, and therefore the liability, but also it's a very sound basis for their future projections."

That in turn allows them to think about "what their abatement action might like be over the next five years or so", she says.

"Although it's quite onerous for some companies to get to this level of completeness in their reporting, I think overall we will see significant benefits that flow from it."

Stephenson adds that some companies are taking the extra step of having their NGERS emissions and energy use data audited as they get ready for the scheme's October deadline for the lodgement of first-year reports.

"Although there is no obligation to undertake any assurance, some of the boards and executive teams are finding that because this is the first year of mandatory reporting that they do find it beneficial to have some level of assurance over the data," she said.

Not only will it give senior executives greater confidence that they have met their NGERS obligations, "it gives them a very strong base in terms of understanding what their future liability may be under the CPRS".

'More orderly approach'

Stephenson says the Rudd Government's decision to push back its proposed CPRS start date has given companies breathing space to think more strategically about how they will respond.

There is more opportunity to focus on strategy and develop a "more orderly and methodical approach", she says.

The additional time – and the release of CPRS bills – has also allowed "some sort of percolation of information and understanding through the senior management ranks".

Despite the lingering uncertainty over the fate of the bills in the Senate and the international policy confusion, "there are things companies can do now which are very much in their control", Stephenson says.

One of those is internal abatement and – thanks in part to programs such as the federal Energy Efficiency Opportunities scheme – many companies already have a list of potential abatement projects.

A lot of companies are now revisiting those lists and assessing whether and how the merit order will change with a price on carbon, she says.

"That is now something that can be evaluated and by undertaking abatement now it will reduce their forward risk," she says.

Stephenson says companies should also now be thinking more broadly and developing internal decision-making tools that will allow them to rank different options under a range of carbon price scenarios – whether it be internal abatement, investing in carbon sink forestry or purchasing international credits.

U.S. firms turning to Australia for advice

One of the "ironic outcomes" of the nature of the climate policy debates in Australia and the U.S. is that Australian companies are proving to be a "significant resource" for their American colleagues who are scrambling to get on top of the issues, Stephenson says.

Australia has had years of "very detailed debate, discussion and analysis" and business has been heavily involved in the development of the legislation.

That means Australian companies are "much more embedded in the detail", she says.

"Since the Obama Administration was elected they have moved at what is almost lightning speed to get a very complex bill through the Congress," she says.

"The U.S. companies, particularly those that are the large emitters, have not spent the detailed time in understanding it – just because the time hasn't been made available ... they have had a very compressed timeframe and we have had quite a long one," she says.

Stephenson says there are numerous requests being made to Australian companies, "whether it be in the power sector particularly or the emissions intensive industries, to understand how we've thought about the issues here and the level of analysis that is being carried on".

"And that in turn is going back to the U.S. to allow their industry associations and individual companies to try and get to the nitty-gritty of what the U.S. legislation is all about."