|
 |
|
There are a number of key commercial drivers that make it an imperative to put action on climate change at the heart of business strategy.
|
|
|
Investor Interest
Investors and analysts recognise that carbon emissions represent a real business cost. They look at carbon assets and liabilities as they would any other item on a company’s balance sheet.
Put simply, if investors feel a company is not strategically managing its climate change impacts, that will be reflected in the share price. Companies are being screened against environmental and social criteria, and indices such as FTSE4good are becoming significant influencers.
Legislation
With the world’s legislators required to deliver a 60% reduction in emissions over the next 30-50 years, the pressure on companies is likely to get tighter. Even 'indirect’ legislation from Local Planning Authorities will put pressure on businesses for energy efficiency and renewable energy.
|
|
|
|
Public Demand
Society is changing. Environmental and climate issues are being taken far more seriously. We are changing the way we live, how we travel and what food we buy. For example, 40% of eggs bought in the UK are now free-range, despite their higher cost. Companies who are operating in the ethical arena have seen their profits soar. And they're proving that what’s good for the shareholder is also good for the environment.
"In the US, the consumer segment which makes its buying decisions in keeping with their values of social and environmental responsibility is growing at 1% per year … but the dollar (spend) going into the market --now at $355 billion -- is escalating about 10% a year."
Paul Ray, author of Cultural Creatives: How 50 million people are changing the world
|
|
|
|
Supply Chain Issues
‘Greening the supply chain’ has passed into the corporate dictionary. This has important implications for suppliers.
|
|
|
Even service-based companies with a small direct environmental footprint can be making high indirect impacts on climate change.
A bank’s choice of choice of paper suppliers, for example, could have a damaging effect on their reputation. And as it’s now common for procurement departments to interrogate the environmental credentials of their suppliers, this can seriously impact on gaining and retaining business.
|
“Environmental credentials are important to Honda. We have moved more and more of our courier business to a company that has made a commitment to going ‘green’ by going CarbonNeutral”
John Kingston, Environment Manager, Honda
|
|
|
|
Reducing Raw Materials
The big industry users of energy - those first to feel the cost of carbon compliance - will be passing on those costs to their customers.
Businesses that rely heavily on energy and raw materials like iron, steel and cement, will feel an immediate impact on their bottom line. Many organisations are taking the opportunity to reduce their carbon footprint at the same time as improving, efficiency, cutting costs and reducing their own climate change footprint.
|
| |
|
|
