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Will climate change kill business?

mail-2.jpg Failure to innovate will be disasterous for business, says Chris Bowden, CEO, of energy price and  risk management Utilyx

“It is now widely accepted among the scientific, political and business community that global warming is a real problem with potentially devastating consequences.

The problem is not and should not be the sole responsibility of our elected representatives and international bodies.  Forward-thinking business leaders have already recognised the need for a more sustainable approach. Mervyn Davies, chief executive of Standard Chartered Bank and a director of Tesco has said, “You won’t survive in business if you are not environmentally responsible.”

In James Murdoch’s view, “Corporations should be involved in the climate change debate… Tackling risk in one’s business strategy is what business leaders are supposed to do.”

As Stern pointed out, Sir Nicholas Stern’s report into climate change, published in late 2006,combating climate change could become a major growth industry, generating around £20 billion of business globally by 2050.  Nonetheless, many see only the prospect of green taxes and an enormous money sink.

But although there are likely to be a combination of taxes, targets and incentives in the future, investing in measures that reduce carbon emissions can result in significant financial dividends and competitive advantage.

The real question, therefore, is not, “Shall we do something?” but “What shall we do?”

Unfortunately, there is no one-size-fits-all policy that is equally applicable to all organisations.  But addressing climate change doesn’t necessarily require a leap into the unknown or an inordinate amount of risk: biomass technology has been with us for over ten years, for example, solar-powered heating and wind-generation for 20.  None now require as much capital investment as in the past and are all are tried and tested.

Of course there are long-term changes to be made.  We need to wean ourselves off our energy intensive habits such as air-conditioning and heating by designing more efficient building systems.

In the meantime, there are certain principles that every company needs to apply. Firstly, it is essential that any organisation understands its starting position.  What is the size of its carbon footprint?  How is it generated? What are the major sources of carbon emissions?

The second key issue is understanding and measuring current energy consumption.  A significant number of multi-site organisations still have metering and billing problems that are the result of incorrectly correlated data between them and their supplier, which makes it much more difficult to decide what to do and then measure the results.

And finally, education and communication are key, to ensure that even minor changes are adopted throughout the organisation, and that all relevant bodies are involved.

It is certainly possible to undertake these initial assessments in-house.  But when it comes to choosing appropriate technologies, making changes to working practice, and delivering real results, it is extremely helpful to call in the services of expert consultants.

For example, many ‘carbon neutral’ companies have in fact offset their carbon emissions. Energy experts will point out that while this may have some benefit in the short term it is essentially paying someone else to sort out the problem.  As a long- term solution it is flawed and potentially expensive.

Furthermore, calculating the full extent of a corporation’s carbon footprint is more complicated than it may at first appear.  For example, converting to gas may appear environmentally sound, but emissions from production, refinement and distribution can add tonnes of carbon to the final total.

Climate change is not going away, and we all have a role to play in reducing carbon emissions.  But what will set one organisation apart from its competitors is its attitude to this responsibility.  If you see it purely as a burden, that is exactly what it will become, and the business will lose ground.  But with the right help, combating climate change can be the spur to more efficient, sustainable and highly-competitive business practices.”

1 Comment

  • xyz
    Posted August 9, 2007 at 3:16 am

    be careful. lol

Comments are closed.

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