Overview

Climate change is accelerating at a pace and scale that requires urgent action across all parts of society; and the business sector has a critical role to play here. Savvy CEOs now understand that "business as usual" is no longer possible and that taking action to reduce climate risk makes good business sense. Organisations that are simply trying to undertake their normal operations may be asking what it is that they can do? The answer to this is "a huge amount" as is now well documented. From energy efficiency to improved operational processes, most business responses to climate change will usually save money as well as carbon.

Raise awareness to manage carbon

The first step to managing greenhouse gas emissions is to measure them. Organisations need to know which areas of the business produce the most emissions, otherwise they simply grasp at different responses to climate change without a real understanding of how effective any one action may be. Once information is available companies are better able to focus attention, allocate resources accordingly and set emission reduction targets.

This has been the premise of the Carbon Disclosure Project (CDP) to whom some 2,500 organisations globally disclose their emissions and climate change strategies every year. By going through the measurement process, these companies find that their operations are not as streamlined or as free of waste as previously thought.

From the smallest SME to the largest corporation, significant efficiencies are often the result of taking this step.

Why respond to the escalating threat of climate change?

There are real risks to organisations from climate change. The physical consequences of climate change, be it flooding, extreme weather conditions or lower agricultural yield may pose either direct risk through an organisations own operations or indirect risk through its supply chain. As awareness of climate change increases, there is also risk of changes to consumer demand. New markets and technologies will emerge and businesses who wish to remain competitive will need to adapt to the demands of the low carbon market. Other risks may include regulation, security of supply and economic challenges.

Furthermore, customers are beginning to request this information. With climate change threatening critical commercial, financial, operational and brand implications, an increasing number of customer organisations are looking beyond their direct impacts on the climate to understanding their entire carbon footprint. These organisations understand that if their suppliers are not managing the future challenges around regulation, scarcity of resource or the effects that changes in the climate could have on their business, then their ability to supply and even operate in the marketplace could be dramatically affected.

The role of standards and initiatives

Whilst there are no globally dominant carbon standards for consumers in the same manner as FSC applies to forest products, for businesses the Greenhouse Gas Protocol is the most widely used international accounting tool that enables business leaders to understand, quantify and manage greenhouse gas emissions.

As companies take their first steps to develop a carbon reduction strategy there are organisations such as CDP, a not-for-profit that provides companies with a structure to voluntarily report and to manage their carbon emissions. CDP has a dedicated questionnaire for small to medium sized suppliers that report through its supply chain program.

Main standards and initiatives from Ekobai database are provided in the list to the right.