Senate Finance and Public Administration Legislation Committee [Part 2], , 1:53:30 to 2:12:41
Discussion on challenges in auditing climate policy, including Scope 3 emissions and sustainability reporting, followed by a committee break.
Topics: Climate change, Emissions reduction
Speakers: Dr Caralee McLiesh, Senator Susan McDonald, Unknown Speaker, Speaker 1
>> Okay. The ANAO's report said one of the challenges in auditing this space was contested science and political positions. Your letter to me, you stated regarding the points referred to in the presentation under the heading challenges, including the subd points contested science and political positions and vague definitions and unknowns. These were references to general challenges that can be faced by auditors when conducting audits within the portfolio. I'm not sure that this reference uh general challenges that could be faced. I don't accept that the audit office identifies these issues as challenges unless there was evidence of their existence. So I want to know based on what projects or policies did your office identify challenges as including contested science and political positions and vague definitions and unknowns.
Um so so the reference to vague definitions and unknowns as a challenge um in this presentation uh that uh that was that was made it's it's not an uncommon challenge for auditors um particularly in policies where uh measurement of outcomes is uh is difficult. So we see similar challenges in some social programs where it's difficult to measure um objective object objectively and um in a quantitative way uh outcomes. Uh we'd also use that um description for policies that are implemented over a long uh time frame. So similar challenges apply in infrastructure policy as well. Um it um as an example in climate change policy the measurement of uh scope 3 emissions um is uh is a challenge because of definitions and uh and and unknowns um particularly compared to financial auditing. The um measurement framework for scope 3 missions is relatively new. It's rapidly developed and um there are uncertainties for both for reporting entities but also for auditors as uh as well that are still being being worked through. Um so it's not an uncommon challenge and similarly the reference to contested science and political um positions. It's really about the fact that as auditors we are strictly politically uh neutral and you know our role is not to examine the merits or the appropriateness of uh of policy. Um our work is evidence. >> Sorry I'm just going to run out of time.
So do these still exist as challenges or have has the audit office uh had some of these concerns been assuaged?
>> We will always need to be careful in any area that has contested political in audits in any any policy area that has contested political vague definitions
and unknowns
>> and similarly uh will always be uh uh challenged when there are unknowns and um a lack of precision in definitions of
measures. give me an example of one.
>> Uh I well one of one is the uh the definition around uh scope 3 uh uh emissions. Um that that is an area that um um there is still there is further work that um is is underway. Um you know a different example would be uncertainties from modeling future climate scenarios. um there are challenges in getting precision in definitions and uh you know we we we don't know uh everything about what's going to happen in the future. So in
your annual report for 2526, you said through the ANAO Academy, more than 100 learning experiences were delivered across priority areas that the program had targeted emerging areas of strategic importance including foundational IIA uh AI capabilities and climate reporting and auditing. Can I have a copy of the learnings in relation to climate reporting and auditing? And in your own words, what were the most concerning learnings for the ANAO in terms of climate reporting?
>> Yes. So, this last financial year is um is the first year uh that the ANAO has um audited sustainability reporting that's now been required for four Commonwealth companies under the uh under the Corporations Act. And uh we do have um a series of lessons um from those. Um I think one of those is that um quantification practices are still um going to take some time to mature. We saw um entities using more qualitative um descriptions in their in their sustainability reporting. Uh and over time um that's likely to um evolve to having more quant uh quantified uh measures of uh of um sustainability. Um but we can uh examine what we have um available from some of the uh some of those some of those uh training courses that you've mentioned.
>> Senator McDonald, can I ask um how much more time you're going to need? We are running late. I'm just trying to work out if we break now and bring the AO back or if we can maybe proceed. I think Senator Hume's got about another 10 minutes. Is that right?
>> And I've got about the same.
>> You've got another 10? >> Yeah. In which case we shall break now at 9:30 and we will return at 9:45 with the ANAO. >> Welcome back. We will be continuing with