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CLIMATE CHANGE: Firms Coming Clean on Carbon
By Stephen Leahy
JOHANNESBURG, Apr 30 (IPS) - Thousands of companies supplying some of the world's largest corporations know climate regulations are coming and are agreeing to measure their emissions of climate-altering greenhouse gases.
"Companies, including those in least developed countries, are worried about the risks of extreme weather, water shortages and so on that climate change poses," said Paul Dickinson, CEO of the Carbon Disclosure Project (CDP), an independent not-for-profit organisation in Britain that is coordinating the effort.
Multinationals like Tesco and Unilever may not generate huge amounts of carbon emissions from their own stores or head offices, but their suppliers - which number in the thousands and are located all over the world - certainly do. It would be foolish to pretend these were not part of a corporation's carbon footprint, Dickinson told IPS.
"Unlike politicians, corporations have long lives. And everyday consumers 'vote' with their dollars," he said.
The CDP is the world's largest investor collaboration on climate change, with 385 institutional investors holding assets worth 57 trillion dollars. Increasingly, leading companies and their investors know that climate change poses significant business risks and liabilities and are attempting to reduce their risks by curbing emissions.
Under the CDP's Supply Chain Leadership Collaboration, 11 major corporations were asked to obtain information from their suppliers last January about greenhouse gas emissions, emissions reduction targets and climate change strategy.
The results have now been compiled, and were released Wednesday by CDP. They show that 96 percent of suppliers identified greenhouse gas regulation as a potential risk. Suppliers also foresee extreme weather conditions adversely affecting operations and slowing productivity. Some 58 percent identified reducing energy consumption as the best means of managing climate change-related risks.
However, only 26 percent have established greenhouse gas reduction targets so far, a number that disappoints, said Dickinson.
"There is a revolution in public consciousness around the world about greenhouse gas emissions. People are not going to buy products from companies whose emissions are going to hurt their children," he said.
The CDP is now preparing to roll out its supply chain to many more corporations such as Vodafone, Carrefour, IBM, Heinz and thousands of suppliers in May. By 2009 it expects the effort to fully take off, with "any company putting out significant amounts of carbon emissions" to be part of the assessment programme, Dickinson explained.
Measuring and then reducing carbon emissions will shortly be a way of life for all companies. The supermarket chain Tesco has announced that a range of its own brands will carry labels showing the size of the goods' carbon footprints. Britain is making carbon emissions reporting mandatory. The Canadian province of British Columbia will impose a carbon tax on all companies starting Jul. 1. Even the United States, under the George W. Bush administration, set up a fund to develop a carbon accounting system for industry.
Dickinson calls this a fundamental change, and believes companies that can produce low-carbon products will be the winners - reducing their energy costs and winning consumers.
This change is one reason why many investors and financial institutions are no longer investing in coal-fired power plants in the U.S. And a country like South Africa, which is experiencing significant electricity shortages, would be naive to build more coal-fired power, he said. South African per capita emissions are equivalent to Europeans, even though many millions of people live without electricity.
"The world's poorest are the most vulnerable to climate change. We can't forget about this. They will be the most affected by higher temperatures and water shortages," he noted.
While the rich can adapt to the worst impacts of climate change, poor people will be on the move hunting for food and water. South Africa's extremely high crime rate will only go higher as people become more desperate.
The CDP is a very useful endeavour because it makes nearly all the information available to the public on its website www.cdproject.net, said Andre de Fontaine, a climate researcher at the Pew Centre on Global Climate Change, a U.S. NGO working with business leaders, policy makers, and scientists.
"However, to get the reductions we need to avoid dangerous climate change, national mandatory emissions cuts are needed," de Fontaine told IPS.
The CDP data is good, and because investors can use it to see which companies are best prepared to cope with climate change, it will influence companies to make reductions. But voluntary approaches will not lead to the major emission reductions that are needed, he said. The Intergovernmental Panel on Climate Change (IPCC) has recommended global cuts of 70 percent from 1990 levels by 2050 to lessen the risks of dangerous climate change.
"I don't think the public in the U.S. will be making their purchases based on which product or service has the lowest carbon footprint for some time," de Fontaine added. "It may be different in Europe."
That said, he feels concern about climate is strong and more people are buying their food at local markets to both support local farmers and reduce carbon emissions from transporting food long distances.
(END/2008)
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