Market Forces Spur Carbon Management, but not Quickly Enough
Carbon Disclosure Project releases Global 500 report
It’s funny that while Republicans seem to want to fight any sort of carbon legislation, corporations are seeing CO2 reductions as a good business move. Perhaps in the case of carbon, laissez-faire capitalism might actually work. The only problem with that strategy, of course, is the fact that we’re running out of time and market adjustments, as we’ve been learning economy-wide over the past few years, don’t exactly deliver speedy or painless results.
Nonetheless, it is heartening to hear companies like Siemens, Samsung, and Bayer describe carbon management as "a strategic business priority and competitive driver." The three were among 500 companies who reported their carbon management strategies and results as part of the Carbon Disclosure Project’s (CDP) Global500 report, released this morning.
In fact, according to the report, nine out of ten companies surveyed identified significant commercial opportunity arising from climate change, representing a shift away from concern over the mismanagement of carbon as a risk factor, and toward the idea of identifying and seizing competitive advantages and cost-benefits related to successful carbon management.
Hooray! Now for the bad news: Although 65 percent of companies surveyed are implementing emissions reductions targets, only 19 percent are actually managing to reduce emissions. That’s the sort of news critics of reporting like to point to as evidence that simply revealing your goals and strategies doesn’t amount to much. In response, the folks at CDP counter that the audience for their reports is not just the general public, but investors as well, which gives companies a bigger incentive to improve.
“We ask companies to look at risks and opportunities in a strategic way, and if they do that it puts them in strong position to mitigate those risks and take advantage of opportunities,” says Marcus Norton, who heads up the new CDP Water Disclosure program.
“These requests are coming from investors who are either shareholders of these companies or potential shareholders, so it’s worthwhile for companies to prove to our investors that they can function well in a carbon-constrained and water-constrained world.”
The Global500 report shows two primary areas of action for companies: energy efficiency (largely driven by cost concerns), and product innovation. Not surprisingly, North America lags far behind Europe in both disclosure and performance.
Could increasing competition from Europe be what finally gets the United States working seriously on carbon management? Maybe.
“Fuelled by opportunities to reduce energy costs, secure energy supply, protect the business from climate change risk and reputational damage, generate revenue and remain competitive, carbon management continues to rise as a strategic priority for many businesses,” says Paul Dickinson, CEO of CDP. “Companies globally are seizing commercial carbon opportunities, often acting ahead of any policy requirements. More companies than ever before are reporting through CDP and measuring and reporting their emissions which is the first building block in working towards a low-carbon economy.”
In the end, it might be Benjamin Franklin, not Harry Reid, who brings carbon management stateside.