Climate change is one of the greatest challenges of modern times and over the next twelve months there will be real pressure on business to demonstrate its green credentials. But if business follows the recommendations currently being hyped in the media then there is a real danger of putting the cart before the horse.
The current fixation around carbon off-setting is the modern day equivalent of the Catholic Church’s 13th century selling of indulgences – or get out of hell free cards. This will not contribute to the government’s target of 60% cut in carbon emissions. A robust approach to a carbon strategy must start as any business would for any ‘waste stream’ i.e. rethink, reduce, reuse and recycle, before even considering offsetting.
Climate change as a concern has been around for a long time – governments were discussing this more than thirty years ago and in 1972 established a global programme which eventually gave rise to the Intergovernmental Panel on Climate Change in 1988. Its role to assess the state of knowledge on climate change of the risk of human induced climate change has gradually acted as a wake up call and its latest report due in the spring is expected to add to the urgency.
The early responses by governments were to advocate energy efficiency and the benefits gained from reducing bills in energy transport and other operating costs given rise to the eco-efficiency concept in the early 1990’s. The more recent responses, particularly the trading schemes established in carbon seek to take a free market response to environmentalism – without an honest evaluation of whether or not this is an adequate response to climate change. The sulphur dioxide market established in the US is expected to cut emissions by a third in 20 years whilst regulations and legislation in Germany achieved a 90% cut in just over half that time.
In reality the full range of economic instruments will be needed to address the challenge of climate change and business does have a full role to play – but a more considered role than simply offsetting. Firstly simply knowing your own business’s direct carbon footprint gives you a base from which to devise a strategy – easier than it sounds for a service rather than manufacturing business. It is then about examining how you do business and what can be done to reduce your footprint.
For KPMG this has meant a whole range of measures – from promoting video conferencing (which has avoided more than 6.8m miles in 3 years if these meetings had all taken place), to promoting car-sharing through financial incentives, saving a further 5.3m miles over 3 years in efforts to reduce carbon intensity. These measures alone have avoided 3,000 tonnes of greenhouse gas emissions.
Beyond encouraging behaviour change we also have a utility steering group which sets targets for the business – and includes suppliers as part of that group as well. For our new headquarters we set carbon targets as part of the concept for the building – way ahead of legislation and much further up stream than we would have done in past times.
There is proven technology which has the potential to deliver carbon reduction without sacrificing economic or energy efficiency, which can be introduced for new buildings and should be considered for major refurbishments. We will be using a combination of trigeneration (the simultaneous production of mechanical power often converted to electricity, heat and cooling from a single heat source such as solar energy or fuel) and active chilled beams (energy efficient systems that combine radiant cooling and ventilation), to help us reduce our carbon footprint in our new building. Better to invest in reducing carbon at source than pay to offset later.
Carbon reduction is a business issue which must be treated as part of business strategy rather than a CSR initiative. Doing nothing is not really an option given the increasing scrutiny on this area and increasingly business will have to be more transparent – which brings with it a range of accounting challenges. It will impact on business reputation, which for us has a direct impact on recruitment and retention of staff.
What is really needed now is debate about how to account for carbon reductions in a clear and comparable way and quick action around changing business models. What we don’t need is a way of buying our way out of trouble and a focus on symptoms rather than causes of the mess we are in.
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