CONCERN that the Australian manufacturing sector is under prepared for the impending carbon trading system has increased after a recent report found that 73% of manufacturing leaders have taken no action on climate change.
According to a report by PricewaterhouseCoopers, industrial product companies are staring down the barrel of a carbon crunch, with only 1.6% of industry leaders putting money behind plans to respond to climate change.
Industrial product companies responses to climate change is in direct contrast to resource companies, according to the report, with 28% of resources companies already having allocated budgets.
"Industrial product companies do not have the lobbying power of the resources sector, and they do not have the customer interface of the retail and consumer companies," PwC said in its Industrial Products Outlook report.
Data from the federal department of climate change shows the industrial sector is one of the biggest emitters of greenhouse gasses and will pay a high price if it fails to adapt.
PWC industrial products leader Graeme Billings said industrial companies have work to do, with Australia's carbon trading platform due to begin operating in 2010.
"They must act with urgency to assess the risks they face and set up robust systems to manage their carbon costs," he said.
"This is the first step towards building revenue, brand value and reputation.
"Companies that move first will have an advantage over competitors."
Under legislation that takes effect in July, many industrial products companies will have to report their greenhouse gas emissions and energy production and consumption.
According to the government, big energy users will face cost increases in 2010, and the market will penalise companies that do not have strategies to manage these costs once carbon trading begins.
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