As we are well aware by now, negotiations in Copenhagen failed to deliver international legally binding GHG emissions reductions targets. But how much impact does this have on companies and what role should they be taking?
Despite the lack of an international climate change agreement, increased energy costs and scarce resources over the next few years are reason enough for companies to continue with their climate change commitments. The reality is that the economic recession has led to more emissions reduction than any climate policy has been able to deliver. As such, the pressures for environmental efficiency will perhaps continue to take the bottom-up rather than top-down approach.
This is evidenced by the fact that many companies continue to set their own challenging targets and put in place far-reaching strategies for reducing emissions. News stories featured this month demonstrate this; with increased engagement by corporations with suppliers on climate change, as well as through actions taken by companies such as M&S, Sainsbury’s and BMW.
It is arguable that the biggest change and most significant impact can be made by large companies through their global supply chains. Yet smaller firms should accept their role in the fight against climate change and realise there are benefits to be had. Setting energy reduction targets of their own will save money if nothing else.
This is a strong message and should encourage smaller firms and those who are less engaged to get on-board. It will be interesting to see if initiatives such as the interest free energy efficiency loans offered by the Carbon Trust provide enough additional incentive for smaller companies to take climate change action.
Katie is a senior researcher at Corporate Citizenship. Email her on Katie.dodds@corporate-citizenship.com to discuss measuring environmental impacts including carbon footprinting.
Carbon disclosure project publishes second annual supply chain report
On February 1, the CDP published its second annual CDP Supply Chain Report. The report summarizes the responses of 710 suppliers. The 44 corporations that now comprise the Supply Chain project, including Google, IBM, and Pepsico, requested responses from a total of 1,402 suppliers. According to the report, 89% of members have a strategy for engagement with supply chain companies on GHG emissions and climate change, and 56% state that in the future they expect to deselect suppliers for failing to meet their carbon management criteria, although ‘today’ only 6% are able to deselect suppliers for this reason. Contact: Carbon Disclosure Project www.cdproject.net
British Chamber of Commerce pushes interest-free loans for energy efficiency upgrades
The British Chamber of Commerce (BCC) is urging small and medium sized enterprises (SMEs) to take advantage of the Carbon Trust’s interest free, unsecured loans of up to £500,000 for energy-saving upgrades. By replacing old inefficient equipment, companies can significantly cut their costs, and in many cases, improve their productivity by between 20 to 30%, according to BCC. Business loans are available from £3,000 to £500,000 for businesses to invest in energy-savings projects and equipment upgrades. Contact: Energy Saving Hub www.britishchambers.org.uk/business_services/carbon/
International brands leading the way in disclosing their global forest footprint
A report published on February 10 by the investor-backed initiative the Forest Footprint Disclosure (FFD) project, reveals the names of those businesses that have responded to its first call to disclose details of their ‘Forest Footprint’. This term indicates the extent to which procurement policies for Forest Risk Commodities (FRCs) such as palm oil, soy, timber, beef, leather and biofuels are linked to deforestation. The report identifies best performers in certain sectors, including Marks & Spencer and Sainsbury’s. In total, 35 companies disclosed in response to this first approach, including British Airways, BMW, Travis Perkins, L’Oréal, Adidas, Nike and Unilever. Contact: Forest Footprint Disclosure www.forestdisclosure.com
Post Cop15 survey: outcomes and business impacts
SustainAbility published a post Copenhagen report in February, outlining the key findings of a survey of 635 respondents from the private sector. The survey found that despite the lack of a binding treaty, less than half of respondents thought there was a medium to high risk that sectors would be stuck in a business-as-usual mode. Regarding the impact of Copenhagen, respondents said that carbon markets were likely suffer the most negative impact, while clean energy will face the most positive. The survey asked respondents; All things considered, how do you think your company will respond to the climate challenge in 2010? The responses showed that companies are most likely to set reduction targets and incorporate carbon pricing into decisions, whilst they are least likely to modify their corporate governance structure. Contact: SustainAbility www.sustainability.com
Standard & Poor’s warns carbon risks are set to bite
On 3 March, Standard & Poor’s published a report investigating how European companies look to carbon markets and reduction measures to manage their emissions exposure. The survey, which canvassed the views of 513 corporate issuers rated by Standard & Poor’s on their current and anticipated carbon exposure, finds that while emissions are becoming an accountable item for a large number of companies, only around 40% of respondents are fully integrating carbon exposure risk and carbon reporting into their funding decisions and financial statements. A similar percentage do not factor carbon emissions into any corporate financial calculations at all. However, the poll also provided evidence that attitudes to carbon risks are shifting and exposure to rising carbon prices could soon inform firms’ credit ratings. Contact: Standard & Poor’s www.standardandpoors.com
Money spent on tar sands projects could decarbonise western economies
A research report released on 15 March by the Co-operative and WWF states that the £250 billion cost of developing Canada’s controversial tar sands between now and 2025 could be used to decarbonise the western economy by funding ambitious solar power schemes in the Sahara or a European wide shift to electric vehicles. The same amount of investment would also help the world to hit half of the Millennium Development Goals in the 50 least-developed countries. Paul Monaghan, head of social goals at the Co-op comments that the report (‘The Opportunity of the Tar Sands’) ‘…puts things into perspective and demonstrates not only the scale of the problem, which could take us to the brink of runaway climate change, but also the opportunity being lost.’ Contact: The Co-operative www.co-operative.coop
Carbon Trust concerns over carbon leakage
In March, the UK government-funded Carbon Trust released a report entitled ‘Tackling carbon leakage: sector specific solutions for a world of unequal carbon prices’. In the absence of agreement on equal and simultaneous action at Copenhagen, the report responds to concerns that differential action may result in carbon-intensive producers moving out of regions imposing a carbon cost, causing carbon emissions and economic activity to ‘leak’ outside these regions. The report considers a range of strategies to prevent carbon leakage, and includes an in-depth analysis of the three sectors considered to be most at risk, namely steel, cement and aluminium. Contact: Carbon Trust www.carbontrust.co.uk
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