Carbon and Business

After the success of Al Gore’s 2006 film, ‘An Inconvenient Truth’, and the attention attracted by the Stern Review, the pressure for action on climate change was bolstered in 2007 by the publication of the latest assessment reports by the Intergovernmental Panel on Climate Change.

This has added further pressure on governments to take action to reduce greenhouse gas (GHG) emissions and pressure is also building on companies, regardless of their inclusion in mandatory carbon reduction programmes.

There is a growing awareness of the need for effective and accurate carbon management. The Carbon Disclosure Project (CDP) Survey of FT 500 companies found that over 90% of responding companies flagged climate change as posing commercial risk and/or opportunity to their business.  Of these, 95% have implemented a GHG emissions reduction programme with a specific target and timeline¹. Many companies are now also offering carbon neutral products or pledging to go entirely carbon neutral.

Climate change legislation is changing the environment that businesses operate in. For example, the introduction of the UK Government’s Carbon Reduction Commitment (CRC) will affect over 4000 organisations. The CRC cap and trade scheme will require participants to not only calculate emissions and report annually but to forecast future emissions, devise a carbon abatement strategy, purchase sufficient allowances to cover emissions and maintain auditable records of data.  CRC and similar legislation around the world, are transforming strategic carbon management into a critical business need. 

Reducing emissions and developing low carbon strategies can bring many benefits to an organisation even when they are not affected directly by climate change legislation.  These benefits include lower fuel and energy bills and specific tax breaks. For example, transport emissions can have a significant impact on a company’s overall emissions and there are many options available to reduce this element of a company’s carbon footprint and cut transport costs at the same time.

Climate Change has become an important issue in the commercial world.  There is greater investor scrutiny of the environmental performance of companies, particularly of climate change policies and a push from consumers and clients wanting more information on the impact of the products and services they purchase.  Companies have the ability to identify emerging carbon markets and opportunities and demonstrate leadership to influence and strengthen their competitive advantage.

¹ Carbon Disclosure Project, 2007.

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