CHAPTER 14 Performance measurement 583gas was burnt) causing sea levels to rise significantly. This has not been accounted for in the United Nations’
reports. So with the population set to rise to 9 billion by the year 2050, climate change is a key focus.
One initiative that could help is the carbon disclosure project (CDP). CDP is a not-for-profit organisation
that provides a platform for companies and cities to measure, disclose, manage and share environmental
information. CDP is focusing on companies and cities rather than countries. The success of the Kyoto Pro-
tocol in encouraging countries to reduce carbon emissions has been mixed. Governments which signed
and subsequently implemented carbon reduction schemes saw major activities relocate to countries with
cheaper and less stringent carbon emission policies. The advantage of CDP is that it aims to focus attention
on individual companies (not nations) regardless of where they are located. Critics of CDP have contested the
quality of the data submitted to CDP and, therefore, the value of the reports. Nonetheless, the CDP is trying
to work with the world’s largest corporations to reduce their negative impact on the environment. The web-
site, http://www.cdproject.net, contains the latest CDP city reports. JB Hi-Fi Ltd responds annually to the CDP and
claims to have ‘systems in place to ensure it is reporting and monitoring energy consumption and greenhouse
gas emissions’ (JB Hi-Fi Ltd 2015, preliminary final report, p. 9). Their CDP scores in 2013 and 2014 were
63E and 73E respectively. This indicates an improvement from 2013 to 2014.
For a number of years, Australia has had in place regulatory requirements for reporting of information
relating to greenhouse gas emissions, greenhouse gas projects and energy use. The first reporting period began
on 1 July 2008 and requires entities whose characteristics meet the National Greenhouse and Energy Reporting
Act 2007 (NGER Act) thresholds to report their performance on greenhouse gas emissions. As well as the
NGER Act, in August 2009 the Australian government implemented the Renewable Energy Target (RET)
Scheme, which aims to ensure that 20 per cent of Australia’s energy requirements will come from renewable
resources by the year 2020. The Australian government has also committed to reducing Australia’s green-
house gas emissions to 5 per cent below year 2000 levels by 2020. However, there is a proposal to change this
commitment to cutting 26 per cent of the 2005 carbon emission levels by 2030. It is this commitment that is
driving the government to consider carbon pricing and other initiatives such as investment in renewable energy
research and development, upgrading of regulations to set standards for new buildings, appliance and vehicle
efficiency, and providing funds for manufacturers to invest in cleaner technology and landholders to explore
biodiversity initiatives. These developments would make it necessary for entities to measure their environ-
mental performance and to start planning and costing this into their normal operations. Globally, all coun-
tries are expected to contribute to the lowering of carbon emissions and, as such, have pledged their Intended
Nationally Determined Contributions (INDC). These commitments are based on an expectation that global
temperatures will not rise more than 2 degrees above the pre-industrial (1880) temperature.
From an accounting perspective, climate change may affect the value of assets (see reality check
‘Great Barrier Reef scorecard poor’). Physical assets such as land, high energy use assets and assets that
are used to produce non-green products may be impaired and need to be revalued.
REALITY CHECKGreat Barrier Reef scorecard poor
The impact of man on the environment has led to a number of performance evaluation initiatives by
government. One such initiative was for the Great Barrier Reef (GBR), one of the natural wonders of the
world. The GBR was listed as a World Heritage Site in 1981 in recognition of its Outstanding Universal
Value and is protected under national environmental law. The Australian and Queensland governments
have the obligation to maintain this value and, as such, performance reporting of its condition is crucial.
Deciding on what is ‘value’, selecting appropriate performance measures, monitoring and reporting are
all key steps in meeting its obligations to the global community.
In the latest report card, delivered in September 2015, the assessed performance was poor. The report
showed actual performance and conditions were well below targets. The report monitored inputs, run-off,
and the condition of the Reef’s marine eco-system during 2009–2014. There were improvements in some
measures, such as a 12 per cent reduction in sediments. However, there was a 0.4 per cent loss of riverbank