“Follow the carbon, find the cost savings.” This is the take-home message of a new report by analysts Verdantix for the Carbon Disclosure Project (CDP) setting out why more and more leading companies are defining carbon management as a strategic priority that can help save money, prepare for carbon regulation and protect brand reputation.
Sound familiar? It should. There’s been a steady flow of reports from investors, consultants and analysts in the past few years on how carbon management is moving up the political and business agenda, and how companies who ignore it do so at their peril.
This report is no different. It outlines the main drivers for carbon management, including energy costs, security of supply, carbon regulation and brand reputation. It warns that carbon’s strategic importance is expected to grow over the next ten years as a result of climate-related natural disasters, energy supply crises and national carbon regulation created in response to a global agreement on climate change. It itemises benefits of carbon management with reference to case studies from electronics firm HP, retailer Marks and Spencer (ENDS Report, March 2010) and carmaker Renault.
However familiar the message, it’s still spot on. The risks and opportunities of carbon management are clear. But aren’t we preaching to the converted? The report is based on interviews with ten heads of sustainability at global firms with billion dollar revenues. It builds on the CDP’s annual survey of 2,500 of the world’s largest firms listed on stock exchanges such as the FTSE 350 (ENDS Report, October 2009). Readers of the report will mainly be clued-up sustainability managers and their coterie of advisers.
But what about the myriad of medium-sized and small companies who have more mundane concerns, such as staying in business? They will only wake up to carbon management when it becomes a mainstream requirement, and the only way to do that is through effective regulation and taxation. But pressure on governments to push through such measures seems to be fading as a global agreement on climate change hangs by a thread. Effective carbon regulation is far from as inevitable as the report seems to suggest. And if we have to wait for climate-related natural disasters to spur us into action, it’s going to be too late.