Casting the carbon net wider

March 28, 2007

Reducing corporate impact on the climate should be about more than just offsetting and carbon neutrality, argues Ita McMahon of The Corporate Citizenship Company.

The recent flurry of climate-change initiatives announced by some of the UK’s most established brands is significant and should be welcomed. It is proof that the messages from the Stern Report and the Inter-Governmental Panel on Climate Change have not only filtered through to consumers, but also that business is recognising the benefits of brandishing green credentials.

As we move ever closer towards a carbon-constrained world, it is becoming clearer that companies with a comprehensive, integrated carbon management strategy will be best placed to attract, retain and do business going forward. So, what precisely are the emerging trends in carbon management, and how can carbon-conscious businesses set themselves apart from the pack?

Going carbon neutral is the latest trend and the ultimate ambition for many businesses. Carbon neutrality is usually achieved by reducing energy consumption and offsetting the remaining carbon emissions. Eco-savvy firms have taken onboard advice from environmental NGOs that offsetting should be seen as the last resort once other measures for reducing emissions have been implemented; forward-thinking businesses realise that it is the action taken to reduce carbon emissions, such as staff training, investment in green technologies and improved working practices, that will reap long-term benefits in a future low-carbon economy.

Nonetheless, in the race to declare carbon neutral status, there can be a temptation for companies to skip the earlier steps of carbon management and head straight for offsetting, bypassing the development opportunities a full carbon audit provides. This is a missed opportunity to set building blocks in place for the future. Moreover, the short-term reputational benefits gained at present from a carbon management strategy based predominately on offsetting may grow less attractive over time. As the general public becomes ever more carbon-aware, consumers are beginning to learn that carbon neutrality can actually mean very little and that the strategy behind the label reveals a company’s true environmental mettle.

Yet a surprising number of businesses continue to bang the offsetting drum, despite growing public scepticism of its effectiveness. Media coverage of discredited re-forestation schemes along with accusations that offsetting salves the corporate conscience and reinforces a ‘business as usual’ mindset have further stoked the debate. That said, the move towards renewable energy projects has opened up opportunities for more credible offset investment. The recent introduction by the government of a voluntary code of conduct for carbon offsetting schemes should also bring much-needed rigour to the table and guide businesses in the direction of more robust offsetting initiatives.

Nevertheless, just as government and offsetting providers are re-examining the sector, this is the ideal moment for businesses too to pause and re-consider what carbon neutrality means and what offsetting actually achieves.

A potential problem with the carbon neutral badge is that it is currently treated as a stand-alone objective. This inhibits innovative and creative thinking on how business can use its skills and influences to tackle climate change beyond its realm of immediate responsibility. Sending a team of environmental engineers to spread best practice in developing countries, incentivising employees to lower their carbon footprint outside the workplace, or working with suppliers to reduce upstream and downstream carbon emissions are activities that do not typically contribute towards carbon neutrality. Yet such projects have the potential to unlock carbon savings above and beyond a traditional carbon management strategy. Reputationally, an inclusive approach to carbon management that extends the traditional lines of responsibility is also more likely to withstand scrutiny from future generations of carbon-educated consumers.

Persuading business to invest in such groundbreaking schemes will be difficult unless stakeholders can be convinced that that their actions will generate public recognition and other business benefits alongside carbon savings. There are obvious parallels here with corporate community involvement, which has long recognised that business can act as a positive force within society. In recent years the moral impetus that business can and should be contributing towards a better society has been coupled with a realisation that business too can benefit from community investment. This in turn has spurred greater giving and has resulted in more and more innovative corporate community partnerships.
London Benchmarking Group companies are increasingly aligning their community affairs strategies with core company values, and the LBG model encourages members to measure the benefits to society and to the business – in terms of press coverage, brand association, employee pride, etc. The return to the business does not detract from the societal benefits: on the contrary, it is a helping hand to justify sustained corporate community investment.

It is now time for CSR managers to set carbon management in the wider business context and make a similar case for voluntary investment in low carbon projects. Managers should ask how their business can utilise core services, in-house expertise or spheres of influence to deliver innovative, carbon-reducing projects. Securing senior management buy-in will depend largely on the recognition that business has a wider role to play in tackling climate change and on evidence that such projects will deliver business dividends.

Case studies

BT’s Big Switch Off

BT’s BIG Switch Off campaign is reminding its staff to switch off computer monitors, printers and other equipment that are usually left on standby. Employees are also being encouraged to switch off lights at night and to unplug mobile phone and PDA chargers, which still take energy from the mains even when not connected to a device. Along with a host of other measures such as energy consumption management and its policy of buying all of its electricity from renewable energy sources, it’s estimated that the BIG Switch Off can save enough energy over the next four years to power around 40,000 homes. The scheme is part of a wider public target to reduce its greenhouse gas emissions by 25% by 2010, establishing the company’s recognition of climate change as a major issue.

E.ON UK’s Community Power

E.ON UK’s Community Power scheme ensures that the benefits of the company’s development and financing of small clusters of wind farms are felt by both the landowner and the local community in which they are built. Engaging the local community at an early stage in each project development, events such as public exhibitions, site visits and press releases allow local people to keep informed and get involved in the consultation process. The local community also receives a regular income to be invested in the community during the lifetime of the wind turbine cluster, as well as energy efficiency advice and products and educational materials for local schools.

Wal-Mart’s Sustainability 360

Wal-Mart’s Sustainability 360 has encouraged its employees, as well as its customers, communities and suppliers, to find ways to take nonrenewable energy off the shelves and out of people’s lives. As part of the Sustainability 360 environmental programme, the company’s CEO, Lee Scott, announced the importance of its employees understanding that sustainability is part of their business culture, and that each of their 1.3 million employees, including 150,000 in the UK, can make a difference to the environmental impact of their company.

The Corporate Citizenship Company and the carbon footprint

The Corporate Citizenship Company can help businesses move beyond the assumption that their carbon responsibility ends with the reduction of their own carbon footprint. The Corporate Citizenship Company can use its benchmarking and measurement skills to help businesses identify the right investment projects, ascertain the business benefits and measure carbon savings. Contact 020 7940 5610;;

Ita McMahon is London Benchmarking Group advisor at The Corporate Citizenship Company