Global warming is of utmost importance and must be addressed by the private sector but, at the same time, it should not detract attention from community issues.
Climate change was recently described by the World Economic Forum in Davos as the most critical challenge confronting humanity. The issue has moved from the margins to the mainstream and is now at the forefront of business leaders’ minds. Few issues in the debate about corporate responsibility have been so effective in generating board room interest and spurring senior level support for action.
The upsurge in interest has created a whole new job market for climate change experts. Many companies are devoting substantial resources to assessing their carbon footprint and attempting to reduce their environmental impact. Much of the current activity around environmental impact is in response to media interest and public concern about the role of business in addressing global warming.
Ignoring this pressure would be wrong. However, this trend is fueling concern among some practitioners that broader aspects of corporate citizenship are moving off the agenda. It seems that they are right to be worried. A recent Ipsos MORI poll revealed that in the UK, the government is seen to be best placed to take responsibility for the environment. However, companies are considered by the public to have the ability to help limit climate change. Concern for the environment is now seen as the number one issue for companies to address – while supporting activities in the community appears way down the list of priority issues.
Ultimately it is not an either/or choice between society and the environment. While companies are undoubtedly devoting more time and effort to mitigating their impact on climate change, this should not be achieved at the expense of community investment and social regeneration activities.
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Businesses ignore climate change at their peril
Businesses have to improve the way in which they report the impact of their operations on climate change according to a report from the Association of Chartered Certified Accountants. Improving Climate Change Reporting – published on August 9 – found that of the 42 UK companies assessed, only 25% of those with a high product impact had a product climate change policy, and only 43% could provide long-term (over 5 years) targets. No organisation disclosed any product targets.
This finding is supported by research from KPMG and the Global Reporting Initiative, which found that sustainability reports focus on the opportunities posed by the phenomenon rather than the threats. Reporting the Business Implications of Climate Change in Sustainability Reports concludes that ignoring threats posed by climate change represents “serious economic risks”. Japanese companies were found to be leaders in the field of climate change reporting with most companies dedicating a section of their reports to climate change.
The UK’s Department for Transport has launched a new website, Best on CO2, that directs potential car buyers to the most environmentally friendly cars within their preferred vehicle category. Transport minister, Jim Fitzpatrick, points out that if consumers follow the website’s advice they could reduce their “CO2 emissions by 24% and potentially save a quarter on fuel costs”.
The website comes ahead of an EU decision on how to meet the target of reducing average fleet emissions to under 120g/km. Some MP’s are calling for cars that continue to emit more than 240g/km to be banned. Detailed legislation is not expected until the New Year.
The Interactive Media in Retail Group has awarded Tesco a “green Oscar” for its fleet of zero-emission electric vans. Announced on July 26, the award was in recognition of the supermarket being the first company in the UK to invest in a fleet of electric cars. The new vans, supplied by Modec and operating in the Shrewsbury area, are restricted to a maximum speed of 50mph and cover over 100 miles before they need re-charging. In another first among supermarkets, last month Tesco launched an initiative to allow customers the choice not to have plastic bags used to deliver their internet shopping.
British transport group National Express has halted a biodiesel trial for bus and coach operations after consultation with environmental groups revealed the use of biodiesel in this way may do more harm than good. National Express chief executive, Richard Bowker, said that they would not rule out the use of such initiatives in the future, but noted that “what appears to be the green option may not actually be green after all”.
Bowker cites concerns relating to biofuel production, such as habitat destruction and the rising price of food farming in developing countries, as reason for stopping the biodiesel trials. With coaches that are about five times as carbon efficient as cars, National Express claims it is already one of the most environmentally friendly transport companies in the UK. The biodiesel trials would have seen some buses running on up to 30% biodiesel.
Researchers at conservation charity the World Land Trust have published what it believes is evidence that a switch to biofuels over fossil fuels will actually raise carbon emissions and not lower them. It asserts that the switch will release between two and nine times more greenhouse emissions over the next 30 years than fossil fuels.
The report is the first comprehensive study of the emissions from biofuels and states that the land planned for biofuel production should be reforested. It also warns against deforestation to make way for biofuel plantations pointing out the huge quantities of CO2 that would be released in the process. The World Land Trust advises an increased focus on energy efficiency and renewables as a far more environmentally friendly alternative.
Merrill Lynch has launched a new energy efficiency index that identifies sectors and companies that Merrill Lynch believes should benefit from the growing interest in reducing carbon emissions. The index, which was announced on July 30, is currently comprised of 40 companies, which are mostly leading innovators in technologies designed to increase fuel efficiency.
The automotive industry, capital goods, semi-conductors and building materials are all sectors that Merrill Lynch has identified as having enormous potential for improving their energy efficiency. Although it is acknowledged that the vast improvements these industries are capable of are unlikely to occur without incentives or regulation.
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