Many companies are not waiting for government mandates. They are taking steps to reduce their emissions right now by implementing targets and other innovative programs in areas such as energy, carbon sequestration, and waste management.
For additional content on these strategies, read Corporate Governance and Climate Change: Making the Connection, a March 2006 report profiling the efforts of 100 leading companies, including 21 BELC companies, to address climate change. The report was released by the investor coalition Ceres.
For more detailed information on the BELC companies, please visit the Company Profiles in this section.
For details on how companies are bringing low-carbon innovations to market, visit the Innovation Project.
The following reports focus on some of the key issues confronting businesses as they address the climate change challenge. The reports (all pdfs) were produced by companies, investment firms and other non-governmental organzations and do not necessarily reflect the views of the Center.
The following reports are from other nongovernmental organizations and companies and are organized under seven categories:
- Corporate Governance
- Investor Resources
- Clean Technology and Low Carbon Economy
- Sector-Specific Resources
Ceres: Corporate Governance and Climate Change: Consumer and Technology Companies (December 2008). This Ceres report is the first comprehensive assessment of how 63 of the world’s largest consumer and information technology companies are preparing themselves to face this colossal challenge. The report employs a “Climate Change Governance Framework” to evaluate how 48 US companies and 15 non-US companies are addressing climate change through board oversight, management execution, public disclosure, GHG emissions accounting and strategic planning and performance.
Ceres: Corporate Governance and Climate Change: The Banking Sector (January 2008). This report is the first comprehensive assessment of how 40 of the world’s largest banks are preparing themselves to face the colossal challenge posed by climate change. It pays particular attention to how corporate executives and board directors are addressing the governance systems that will be needed to minimize climate risks while maximizing investments in solutions that mitigate and help society adapt to climate change.
Ceres: Corporate Governance and Climate Change, Making the Connection (March 2006). In this report, Ceres surveys 100 of the world's largest companies in 10 industry sectors and uses a "Climate Change Governance Checklist" to evaluate how these companies are addressing the issue.
Carbon Disclosure Project: CDP4 (2006). The Carbon Disclosure Project is a forum used by institutional investors to request information on greenhouse gas emissions from some of the world's largest companies. This report, the fourth in a continuing series, contains data on individual company's CO2 emissions and mitigation plans, and also includes analyses of new climate developments.
Deloitte & Touche LLP: The Risk Intelligent Energy Company: Weathering the Storm of Climate Change (October 2007). The energy industry has always dealt with risk. However, when the scope, complexity, and interdependency of risk factors increase, or when an emerging risk simultaneously presents significant opportunities, more comprehensive and integrated approaches are necessary. This Deloitte & Touche LLP paper provides insight into identifying key climate change risks, discusses how a Risk Intelligent approach to Enterprise Risk Management helps to manage these risks, and offers guidance on how to adapt business models to the implications of climate change.
Harvard Business Review: Competitive Advantage on a Warming Planet (March 2007). This article by Jonathan Lash and Fred Wellington of the World Resources Institute argues that companies that manage and mitigate their exposure to the risks associated with climate change while seeking new opportunities for profit will generate a competitive advantage over rivals in a carbon-constrained future. This article offers a systematic approach to mapping and responding to climate change risks. (Please note: clicking on the link above will take you to HBR’s download center where you can purchase the article for $6).
The Climate Group: Carbon Down, Profits Up (2007). The Climate Group, an international non-governmental organization, in the third edition of its "Carbon Down, Profits Up" report, describes actions taken by many companies to reduce greenhouse gas emissions. The report also highlights the advantages gained by firms that take early action to address climate change.
Business for Social Responsibility: Offsetting Emissions: A Business Brief on the Voluntary Carbon Market (December 2006). This report from Business for Social Responsibility is intended for companies considering the purchase of voluntary offsets for their greenhouse gas emissions. It offers clear steps that guide early assessments and enable corporate decision makers to become educated consumers within voluntary carbon markets.
Ceres and the Investor Network on Climate Risk: Managing the Risks and Opportunities of Climate Change: A Practical Toolkit for Corporate Leaders (January 2006). This Ceres toolkit provides a guide for corporations interested in developing climate strategies. It lists a series of steps corporations should take and includes case studies of companies that have successfully established such strategies.
California Management Review: Climate Change Strategy: The Business Logic Behind Voluntary Greenhouse Gas Reductions (2005). Many companies are taking advantage of the lack of a mandatory U.S. GHG emission reduction program to set targets at their own pace and in ways that complement their own strategic objectives, writes Dr. Andrew Hoffman of the University of Michigan in this California Management Review (CMR) article. They are doing so in order to prepare for the long term should GHG emission reductions become mandatory, while at the same time attempting to reap near-term economic and strategic benefits should new regulations not emerge. (Please note: clicking on the link above will take you to CMR's download center where you will be given the option of purchasing the article.)
Business Roundtable: Every Sector, One Resolve (September 2004). This is a progress report on BRT's Climate RESOLVE program, which is a multi-sector, CEO-led initiative to promote voluntary action to reduce the GHG intensity of the U.S. economy. BRT reports that as of July 1, 2004, 107 companies were taking action to reduce their emissions under the RESOLVE program.
Harvard Business Review: Winning the Greenhouse Gas Game (April 2004). Companies voluntarily reducing their greenhouse gases are helping to shape the governmental regulations that are coming soon. Dr. Andrew Hoffman of the University of Michigan and author of C2ES report "Getting Ahead of the Curve: Corporate Strategies That Address Climate Change" writes in this Harvard Business Review (HBR) article that if companies do not act now, they will find their competitors will write the rules for them. (Please note: clicking on the link above will take you to HBR's download center where you will be given the option of purchasing the article.)
Ceres: From Risk to Opportunity 2008: Insurer Responses to Climate Change (April 2009). Hundreds of new insurance initiatives, including coverage for green buildings, renewable energy, carbon risk management, and officers’ liability are being offered to tackle climate change and rising weather-related losses in the U.S. and globally, according to this report by the Ceres investor coalition.
Swiss Re: The Economic Justification for Imposing Restraints on Carbon Emissions (August 2007). This insights report discusses why government intervention is needed to impose restraints on carbon emissions and why an international policy is necessary. According to the authors, cap-and-trade policy is likely to be the most successful way of reducing carbon emissions. The report examines the economic reasons for government intervention, as well as mitigation policy options and issues.
Marsh: A Change in the Weather (January 2007). This article from insurance services company Marsh looks at the unique legal and regulatory risks climate change poses to companies. It also examines the fact that corporate behavior is being scrutinized more closely by shareholder activists.
Trucost: Carbon Counts US: The Carbon Footprints of Mutual Funds in the US (April 2009). Trucost’s analysis of 91 US mutual funds, with a combined value of $1,551,067 million, reveals a wide variation in carbon footprints. The highest carbon fund is found to be 38 times more carbon intensive than the lowest. The research covers 75 of the largest equity funds and 16 major sustainability/SRI funds, and examines greenhouse gas emissions associated with eight investment styles. The study highlights opportunities to manage fund carbon risk as climate change regulations are introduced.
Standard & Poor's: CreditWeek Special Issue: The Credit Impact of Climate Change (May 2007). Features of this S&P special report on the credit impact of climate change include the varied credit effects of a portfolio approach to coping with climate change, the costs of potential regulatory compliance and their effect on U.S. utility credit, and the impact of stringent environmental legislation on the world's automakers.
New Energy Finance: Global Clean Energy Investment Overview (September 2006). In this report, New Energy Finance, a financial services firm that specializes in low-carbon energy, analyzes the latest trends in clean energy investing. Investment in renewable energy and low-carbon technologies has more than doubled over the last two years, according to the report.
World Wildlife Fund and the Allianz Group: Climate Change and the Financial Sector: An Agenda for Action (June 2005). WWF and the Allianz Group -- a financial services firm -- teamed to produce this report, which identifies risks for the financial community arising from climate change and provides recommendations for how the sector can turn these risks into opportunities. Special attention is paid to financing low-carbon energy projects.
Goldman Sachs: Energy, Environmental and Social Index (February 2004). This report identifies specific environmental and social issues likely to be material for company competitiveness and reputation in the oil and gas industy, and attempts to quantify their potential impact on stock prices. Goldman Sachs concludes that BP and Royal Dutch Shell stand out for their environmental and social track record compared to their industry peers.
Ceres: Mutual Fund Industry Opposition to Climate Change Resolutions Begins to Thaw (April 2008). The mutual fund industry’s previously apprehensive attitude toward climate change shareholder resolutions is beginning to change as Wall Street starts to recognize the financial risks and opportunities of global climate change. This report analyzes the 2004-2007 voting records of 1,285 funds of 62 leading mutual fund firms, which illustrate that historic opposition toward such resolutions is softening. Some fund firms support many climate resolutions outright, and others abstain on most or all resolutions after opposing them in the past. Still, many mutual funds are acting inconsistently on climate change -- offering new climate-related funds and research products while continuing to oppose virtually all climate-related resolutions.
Goldman Sachs: Capital Markets at the Crossroads (September 2006). In this presentation to the Clinton Global Initiative, Goldman Sachs says that an “Eco-Efficiency Premium” may now be increasing as more investors focus on environmental characteristics when making investment decisions. Goldman Sachs also believes that opportunities in climate change and investing will continue to grow.
Goldman Sachs: Environmental Portfolio Strategy (August 2005). This paper provides a primer on socially responsible investing (SRI), with a particular focus on the investment implications of climate change. Goldman Sachs argues that climate change is an issue that all investors should consider, not just those interested in the SRI market.
ACEEE: The Size of the U.S. Energy Efficiency Market: Generating a More Complete Picture (May 2008). This report frames energy efficiency as an invisible powerhouse and an underappreciated investment opportunity. ACEEE seeks to quantify the size and scope of current investments in energy efficiency technologies both in terms of dollars invested and labor employed. The core question driving the current assessment is “How Big Is Energy Efficiency in the U.S.?” Despite the many obstacles and challenges, the authors develop estimates of current spending on efficiency and discuss how those investments compare to annual investments in conventional energy supply. The results suggest that the U.S. is not aware of the role that energy efficiency has played in satisfying our growing energy service demands. (Registration is required to view the full report.)
McKinsey & Company: Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost (December 2007). McKinsey & Co. worked with leading companies, industry experts, academics, and NGOs to develop a detailed, consistent fact base estimating costs and potentials of different options to reduce or prevent GHG emissions within the United States over a 25-year period. The study finds that the U.S. could reduce GHG emissions in 2030 by 3.0 to 4.5 gt of CO2e using tested approaches and high-potential emerging technologies. These reductions would involve pursuing a wide array of abatement options with marginal costs less than $50 per ton. Further information can be found at McKinsey's Climate Change Special Initiative.
Appollo’s Fire: Igniting America’s Clean Energy Economy (March 2007). This Web site, established by Congressman Jay Inslee and Bracken Hendricks, a senior fellow at the Center for American Progress, contains stories from businesspeople, engineers and others, who are working to advance the clean energy economy. Visitors to the site can submit their own stories about how they are promoting clean energy and helping fight global warming.
World Business Council for Sustainable Development (WBCSD): Water, Energy and Climate Change (March 2009). This report makes the case for collaborating on solutions for climate change, energy and water, making the case that the problems are naturally linked, and that solutions should also be connected.
Carbon Disclosure Project: CDP Supply Chain Report 2009 (March 2009). This CDP report presents the results of an initiative aimed at identifying and addressing opportunities to reduce emissions of greenhouse gases in the supply chain.
World Business Council for Sustainable Development (WBCSD): Energy Efficiency in Buildings: Business Realities and Opportunities (August 2007). This WBCSD report summarizes the first year’s work of the Energy Efficiency in Buildings (EEB) project co-chaired by Lafarge and United Technologies Corporation. It presents a picture of the challenge of energy use in buildings and a preliminary, high-level approach to addressing that challenge.
Harvard Business Review: Building the Green Way (June 2006). Well designed green buildings yield lower utility costs, greater employee productivity, less absenteeism, and stronger attraction and retention of workers than standard buildings do. So building green is no longer a pricey experiment; just about any company can do it on a standard budget by following the 10 rules outlined by author Charles Lockwood, in this Harvard Business Review (HBR) article. (Please note: clicking on the link above will take you to HBR's download center where you will be given the option of purchasing the article.)
World Resources Institute: Hot Climate, Cool Commerce: A Service Sector Guide to Greenhouse Gas Management (2006). This report offers a step-by-step approach for service sector companies that want to reduce their greenhouse gas emissions. It includes information on quantifying emissions and offers recommendations on how to reduce those emissions.
Many of our BELC companies have greenhouse gas (GHG) reduction targets. Some of these companies have achieved their targets and are currently evaluating new goals, while other companies are considering first-time targets. To learn more about the process of GHG target-setting, read our report Corporate Greenhouse Gas Reduction Targets (pdf).
ü Achieved Targets o In Progress
o An additional 7 percent reduction in energy consumption at our large air separation units per quantity of gas produced by 2015.
o An additional 7 percent reduction in fuel and feedstock consumption per quantity of hydrogen produced at our hydrogen, carbon monoxide and synthesis gas plants by 2015.
ü Reduce GHG emissions by 25 percent from 1990 levels by 2010 through improved resource use. Actual reduction was 26 percent.
o Reduce GHG emissions by 50 percent from 1990 levels by 2010 through improved resource use, assuming success with commercializing inert anode technology.
o Reduce total US GHG emissions by 4 percent from 2008 to 2013
o Starting in 2010, reduce 2005 levels of total CO2 intensity in Alcoa's Global Primary Products business (refining and smelting) by 20% by 2020 and 30% by 2030.
o RerRerrr Reduce the intensity of GHG emissions by 20 percent from 2008 levels by 2015.
o Reduce GHG emissions per volume of water it produces by 16 percent from 2007 levels by the year 2017.
ü Reduce total U.S. GHG emissions by 9 percent from 2004 levels by 2009. Actual reduction was 18 percent.
ü Reduce GHG emissions by 7 percent in energy and utility customers’ operations from 2004 levels by 2008.
ü Reduce total U.S. GHG emissions by 18 percent from 2004 levels by 2009.
o Reduce its absolute GHG emissions by 15 percent from 2011 to 2015, based on its 2010 baseline
o Bayer HealthCare will decrease its absolute GHG emissions by 5 percent from 2025 levels by 2020
o Bayer CropScience will decrease its absolute GHG emissions by 15 percent from 2025 levels by 2020
o Bayer MaterialScience will decrease its specific GHG emissions per ton of sold prodict by 25 percent from 2025 levels by 2020
o Reduce CO2 emissions from vehicles by 20 percent from 2007 levels by 2012
ü Reduce GHG emissions from operations by 10 percent from 1990 levels by 2010.
o Maintain net GHG emissions at or below 2001 levels over the next decade.
ü Reduce global GHG emissions by 25 percent per dollar revenue from 2005 to 2010. Actual reduction was 28 percent.
o Reduce CO2 emissions from its production activities by 20 percent from 2007 levels by 2015 emissions by 10 percent from 2005 levels by 2011.
o Reduce its CO2 emissions from its new European passenger fleet by 30 percent from 2007 levels by 2016
o Reduce the fuel consumption by heavy-duty commercial vehicles by an average 20 percent per ton-kilometer by 2020 compared to the base year of 2005.
ü Improve CO2e per RTM (revenue-ton mile, i.e. one payload of passengers or cargo transported one mile) by 10 percent from 2000 levels by 2010. Actual improvement was 28.2 percent.
o Delta will set a new goal for 2015.
ü In 2010, slightly more than half (56 percent) of Dominion’s total electricity production was fossil-fired. The rest was carbon-free nuclear and renewable energy.
ü Between 2000-2010, we reduced the average CO2 emissions rate per unit of output at our generation fleet by about 21 percent, while fleet capacity grew significantly. Dominion attributes this achievement to the balance and diversity of our fuel mix, combined with sustained productivity improvements at our power stations and a growing reliance on conservation and efficiency programs. Dominion expects its carbon intensity to continue to decline as the pieces of its climate change strategy fall into place in the coming years.
ü Since 2000, Dominion has added over 2,600 MW of non-emitting nuclear generation and over 3,500 MW of new lower-emitting natural gas-fired generation
o Dominion is proceeding with expanding the DSM program, a community solar program, and demonstration of smart grid technologies.
o Dominion has announced the retirement or conversion of 2,668 MW of coal fired power generation
o Reduce global intensity (Btu/lb) of its operations by 25 percent by 2015 based on a 2005 baseline.
o Reduce GHG intensity 2.5 percent per year from 2005 to 2015.
ü Reduce or offset power plant CO2 emissions by 5 percent from 1999 levels by 2005.
o Reduce CO2 emissions intensity (tons/megawatthour) of its electricity generation three to five percent from a 2000-2002 levels by 2012
o Reduce the carbon intensity (tons of CO2 emitted per net megawatt-hour of electricity produced) of the total generation fleet from 0.63 in 2005 to 0.50 by 2020.
o Reduce total global GHG emissions of Duke's US generation fleet by 17 percent from 2005 levels by 2020.
ü Reduce GHG emissions by 65 percent from 1990 levels by 2010. Actual reduction was 67 percent.
ü Hold total energy use flat at 1990 levels through 2010. Actual use in 2010 was 19 percent below 1990 levels
o Reduce total global GHG emissions by 15 percent from 2004 to 2015
o Source 10 percent of global energy use from renewable resources by 2010.
ü Stabilize CO2 emissions from U.S. generating facilities at 2000 levels through 2005. Actual reduction was 23 percent below target.
ü Reduce total U.S. GHG emissions from operating plants by 20 percent from 2000 levels by 2010.
ü Reduce total U.S. GHG emissions by 8 percent from 2001 levels by 2008. Actual reduction was more than 35 percent.
o Reduce, offset or displace more than 15 million metric tons of GHG emissions per year by 2020
o Reduce energy usage at company facilities by 23% from 2008 levels by 2020
o Reduce total global GHG emissions by 1 percent from 2004 levels by 2012.
o Reduce intensity of GHG emissions by 30 percent from 2004 levels by 2008.
o Reduce total global GHG emissions by 25 percent from 2004 levels by 2015
o Improve energy efficiency by 30 percent from from 2004 levels by 2012
ü Reduce on-site GHG emissions by 18 percent from 2005 levels by 2006. Actual reduction was 31 percent.
ü Reduce PFC emissions by 10 percent from 1995 levels by 2010.
o Reduce the combined energy consumption of operations and products 20 percent below 2005 levels by 2010.
o Reduce the GHG emissions from HP-owned and HP-leased facilities 20% below 2005 levels by 2013 on an absolute basis. HP has set an interim target to reduce the energy consumption in its facilities by 7% (the remaining percentage in this goal) below 2008 levels by the end of 2010.
o Reduce the energy consumption and associated greenhouse gas (GHG) emissions of all its products to 40 percent below 2005 levels by the end of 2011
ü Reduce global average net specific CO2 emissions by 20 percent from 1990 levels by 2010.
o Reduce CO2 emissions per ton of cement by 25 percent, compared to 1990 levels, by 2015
ü Achieve an absolute 10 percent reduction in PFC emissions from semiconductor manufacturing processes from 2000 levels by 2005.
ü Reduce average annual CO2 emissions equivalent to 4 percent of emissions associated with worldwide annual energy use from 2000 levels by 2005. Actual reduction was 6.2 percent.
ü Achieve annual energy conservation savings equal to 3.5% of IBM’s total operational energy use. Actual reduction or avoidance was 5.4 percent in 2009.
o Reduce total global GHG emissions (from operational energy used and PFC emissions from semiconductor operations) by 7 percent from 2005 levels by 2012.
o Reduce total global GHG emissions (from operational fuel and electricity use) by 12 percent from 2005 to 2012
o Reduce total PFC emissions from semiconductor operations 25% from 1995 levels by 2010
o Reduce total emissions reduction of 6% from a baseline of the average annual North American GHG emissions from 1998 - 2001, by 2010
ü Reduce PFC emissions by 10 percent from 1995 levels by 2010. Actual reduction by 2010 was 45 percent in absolute terms and over 80% on a per chip basis
ü Reduce global GHG emissions by 30 percent per production unit from 2004 levels by 2010. Acutal reduction by 2010 was 45 percent below 2004 levels on a per chip basis.
ü Reduce the absolute global-warming gas footprint from Intel operations 20% below 2007 levels by 2012. Actual reduction as of the end of 2010 was 40 percent
ü Reduce GHG emissions per dollar revenue by 30 percent from 2002 to 2012. This was achieved in 2008.
o Reduce GHG emissions per dollar of revenue by 30 percent from 2008 levels by 2018
ü Reduce US GHG emissions rate 21 percent from 2001 levels by 2008.
o Reduce US GHG intensity 27 percent from 2009 levels by 2024
ü Reduce CO2 emissions by 31% from 2000 levels by 2010.
o Reduce tons of CO2 megawatt hour from 0.8 tons to 0.5 tons by 2025, with an intermediate goal of 0.7 tons by 2015.
ü Reduce overall energy use at 88 facilities by 18 percent from 1999 levels by 2003.
ü Reduce annual sulfur hexafluoride (SF6) emissions by 50 percent from 1998 levels by 2002.
ü Reduce SF6 emissions by 60 percent from 1998 levels by year-end 2007.
o The company expects to meet California’s requirement that 20 percent of electric sales come from qualifying renewable energy resources, which emit no or minimal GHG emissions, by 2010.
o PG&E has customer energy efficiency savings goals for the three year period 2010 to 2012 of 3,100 GWh.
o PG&E has customer energy efficiency savings goals for the three year period 2010 to 2012 of 48.9 million therms.
o Reduce energy use at PG&E offices and service yards by 25 percent from 2009 levels by 2014
o Administer the California Solar Initiative, part of a statewide program to install 3,000 megawatts of new customer-owned solar by 2017.
o Sign contracts for 1,360,777 million metric tons of greenhouse emission reductions by 2011 for ClimateSmart program customers. As of the end of 2009, the ClimateSmart program has successfully contracted for almost 1.2 million metric tons of GHG emission reductions.
o Develop up to 500 megawatts (MW) of solar photovoltaic (PV) power by 2010
o Reduce CO2 emissions, or equivalents, by 7 percent per megawatt hour from 2002 levels by 2009.
o Obtain 10 percent of total energy comes from renewable sources by 2011 and 20 percent by 2020.
ü Reduce on-site GHG emissions per ton of product by 4.8 percent from 1990 levels by 2001.
o Reduce total GHG emissions per ton of product by 4 percent from 2003 levels by 2008.
o Reduce energy use per ton of product by 5 percent from 2003 levels by 2008.
o Reduce GHG emissions per unit of commodity production in by six percent from 2008 levels by 2013. Further reduce GHG emissions per unit of commodity production by 4 percent by 2015
ü Reduce GHG emissions from operations by 10 percent from 1990 levels by 2002.
o Maintain GHG emissions from operations at 5 percent below 1990 levels through 2010. In 2009, its direct (scope 1) emissions were around 35% below its 1990 level
ü Reduce energy consumption per unit of production by 15 percent from 2000 levels by 2005.
ü Reduce energy consumption, measured in Btus per building square foot (Btu/ft2) by 18 percent by 2011 from a 2001 baseline. Achieved in 2007.
ü Reduce energy consumption, measured in Btus per building square foot (Btu/ft2) by 26 percent by 2011 from a 2001 baseline. Achieved in 2011.
o Reduce energy consumption, measured in Btus per building square foot (Btu/ft2) by 32.6 percent by 2011 from a 2001 baseline.
o Reduce total energy use in North American operations by 27 percent per vehicle produced from 2002 levels by 2011. Not on target.
o Reduce CO2 emissions per unit of production from U.S. assembly operations by 10 percent from 2002 levels by 2012. Not on target.
o Reduce energy consumption by 10% from all Toyota Canada facilities by 2010
ü Reduce GHG emissions to 1990 levels by 2000.
ü Beginning July 1, 2007, reduce GHG emissions intensity by 12 percent from average intensity between 2003 and 2005.
o Achieve zero net GHG emissions from the company’s Canadian operations by 2024.
o Reduce GHG emissions by 40 percent from 2000 levels by 2020 through greater reliance on renewable fuels.
April 18, 2007
Pew Center Contact: Katie Mandes, (703) 516-4146
Citi Contact: Val Hendy, (212) 559-3362
CITI JOINS PEW CENTER'S BUSINESS ENVIRONMENTAL LEADERSHIP COUNCIL
Global Banking Giant Pledges to Take Immediate Action
WASHINGTON, D.C. – The Pew Center on Global Climate Change announced today that Citi has joined the Pew Center's Business Environmental Leadership Council (BELC) and its efforts to address global climate change.
One of the world's pre-eminent financial services companies, Citi has committed to a 10 percent reduction in GHG emissions by 2011, invested in and financed alternative energy and clean technology, and published equity research that highlights the relevance of climate change to various sectors of the global economy.
In a February 2007 position statement, Citi wrote that climate change poses significant potential risks to the global economy that require urgent action. Citi recognizes that climate change requires a global solution – and that U.S. national action and leadership are critical elements of a successful effort.
The company also supports a market-based national policy to reduce GHG emissions. As their February 2007 climate policy states, "Citi recognizes that establishing a price for carbon dioxide and other greenhouse gases is essential for reflecting the impacts of these emissions…Given the necessity to address emissions from all regions of the U.S. and the world, a national legislative framework will be the most effective and economically efficient response for the United States.”
"The leading financial firms have the most influential voice of any in the business community when it comes to core economic concerns,” said Eileen Claussen, President of the Pew Center on Global Climate Change. "I am delighted that Citi has committed to public leadership on this issue. By calling for a strong, market-based U.S. climate policy and new global approaches, they are protecting the long-term interests of their customers and the communities they touch.”
"Citi is honored to be joining the Pew Center's Business Environmental Leadership Council to work together with Pew and other companies on the critical issue of climate,” said Chuck Prince, Chairman and Chief Executive Officer, Citi Inc. "Citi recognizes the importance of business leadership on environmental issues, has demonstrated its value through initiatives such as the Equator Principles, and looks forward to contributing to this important work led by Pew, learning from our peers, and further developing Citi's responses.”
The BELC was established by the Pew Center in 1998, and the Center is a leader in helping these and other major corporations integrate climate change into their business strategies. The group is comprised of mainly Fortune 500 companies representing a diverse group of industries including energy, automobiles, manufacturing, chemicals, pharmaceuticals, metals, mining, paper and forest products, consumer goods and appliances, telecommunications, and high technology. Individually and collectively, these companies are demonstrating that it is possible to take action to address climate change while maintaining competitive excellence, growth, and profitability. The BELC is the largest U.S.-based association of corporations focused on addressing the challenges of climate change, with 43 companies representing over 3.8 million employees and a combined market value of $2.8 trillion.
The other members of the BELC are: ABB; Air Products; Alcan; Alcoa Inc.; American Electric Power; Bank of America, Baxter International Inc.; The Boeing Company; BP; California Portland Cement; CH2M HILL; Cummins Inc.; Deutsche Telekom; DTE Energy; Duke Energy; DuPont; Entergy; Exelon; GE; Georgia-Pacific; Hewlett-Packard Company; Holcim (US) Inc.; IBM; Intel; Interface Inc.; John Hancock Financial Services; Lockheed Martin; Marsh, Inc.; Novartis; Ontario Power Generation; PG&E Corporation; Rio Tinto; Rohm and Haas; Royal Dutch/Shell; SC Johnson; Sunoco; Toyota; TransAlta; United Technologies; Weyerhaeuser; Whirlpool Corporation; and Wisconsin Energy Corporation.
For more information about global climate change and the activities of the Pew Center and the BELC, visit www.c2es.org.
CLIMATE CHANGE POLITICS: A LANDSCAPE TRANSFORMED
SPEECH BY EILEEN CLAUSSEN, PRESIDENT, PEW CENTER ON GLOBAL CLIMATE CHANGE
XERISCAPE COUNCIL OF NEW MEXICO, MARCH 9, 2007
ALBUQUERQUE, NEW MEXICO
It is wonderful to be here in Albuquerque. I am honored to be a part of this conference, and to kick off Session III of these proceedings.
And what a journey you have been on. Your agenda shows that you have moved from the Desert Dryland of Session I through the Middle Ground of Session II . . . and today you have reached Session III: Oasis. I am just glad this Convention Center has ample parking for all of your camels.
Your journey reminds me of an old New Yorker cartoon. It shows a caravan in the desert with the camels piled high. A child in the group asks his mother the age-old question: “Are we there yet?” And the irritated mother replies: “Of course not, we’re nomads!”
So let me begin by paying tribute to the Xeriscape Council of New Mexico for bringing all of us—all of you—together. The Council understands that, when it comes to issues of how we use water and how we interact with the natural environment, we simply cannot continue blindly on our current course. We cannot keep treating the environment as an instrument for meeting our every whim and need. Or, at least, we cannot do this and expect our actions not to have repercussions, some of them quite severe.
I am here this morning, of course, to talk about climate change. And, given the Council’s interest in water issues, I want to talk a little bit about the relationship between climate change and water supplies. But, mostly, I want to talk about politics.
Now, I know what you’re thinking. You’re thinking: Oh, great. Someone is here from Washington to talk about politics. As if we don’t get enough politics in the news already.
But what I want to talk about is the politics of climate change—and how the political landscape in this country is changing in favor of stronger action to protect the climate. And it is changing for the same reason that events such as this conference are attracting more and more participants. Because people recognize that we have some very serious environmental problems on our hands—and because people see that there are solutions.
Of course, I am talking about people like you. And I am also talking about people like New Mexico’s governor, Bill Richardson.
Just last week, as I am sure you know, Governor Richardson joined with the chief executives of four other western states in a bold agreement to reduce greenhouse gas emissions and address climate change. I’ll talk more about this later, but for now I merely want to alert you to the fact that solutions to climate change are sprouting up right here in your own backyard. New Mexico and its neighbors, in fact, are at the vanguard in showcasing the new politics of climate change that I want to talk about today.
But let me start with a few words about water. Earlier this year, a United Nations panel called the Intergovernmental Panel on Climate Change (IPCC) issued a highly anticipated report on the current science of climate change. This report represents the combined efforts of hundreds of top scientists from around the world. And it received a great deal of attention in the media—chiefly, for confirming once and for all that sea level and global temperatures both increased at an accelerating pace during the 20th century.
Also newsworthy was the fact that the IPCC expressed a much higher level of confidence than in past reports (a greater than 90-percent certainty, in fact) that the changes we are seeing are the result of human actions. The primary culprit, of course, is emissions of carbon dioxide and other greenhouse gases from the burning of fossil fuels.
But there was other news in the IPCC report as well—and a lot of it had to do with water. For example, the report confirmed that mountain glaciers and snow cover have declined on average in both the northern and southern hemispheres. It also found that more intense and longer droughts have been observed over wider areas since the 1970s, particularly in the tropics and subtropics.
And that just covers what has happened to date. The IPCC also issued projections for the decades ahead. And, again, the news is not good. Global temperatures, according to the report, will rise by 3.2 to 7.2 degrees Fahrenheit by 2100, and sea levels will rise one-half to two feet. In addition, there is a 90-percent or greater chance that the world will see more hot extremes, heat waves and heavy precipitation events. And it is likely that we will see more droughts as well.
There it is: the dreaded D-word. The likelihood of more droughts is an obvious concern for people across the Southwest. The American Meteorological Society held a briefing on the IPCC report the other week in Washington, and Dr. Richard Seager of Columbia University made some very sobering points.
He said the report essentially confirms that the southwestern United States began a transition to a drier climate at the end of the 20th century, and that a new, drier climate is, in fact, well established as the 21st century gets under way. According to state-of-the-art models, conditions approximating a perpetual 1950s-style drought are likely to become the new climate of the Southwest in the decades to come.
In other words: If you want to keep a garden in New Mexico, and if you’re not into xeriscaping now, there is a 90-percent or greater chance you will be soon. There is no doubt about it: the changing climate will have serious implications for the Southwest. It will affect development, the allocation of water resources, cross-border relations with Mexico, everything.
And that’s just the forecast for the Southwest. Looking more broadly, the most recent IPCC report confirms beyond any reasonable doubt that climate change is a real problem, that it is caused in large part by human activity, and that it will accelerate in the years to come. If there is any silver lining in the contents of this report, it is this: the IPCC has provided the latest in a long line of scientific studies and pronouncements that have helped to change the political landscape on this issue in favor of solutions. And that is what I would like to talk about during the remainder of my remarks.
In his January State of the Union address, President Bush called global climate change a “serious challenge.” And, while his answers to the challenge fall far short of doing what’s needed, it is a remarkable rhetorical (and political) u-turn for this White House to even acknowledge that this is a challenge, let alone a serious one.
The reason for the u-turn can be found in part, as I said, in the increasing scientific certainty about climate change. Every month, it seems, the scientific case for action has become stronger—to the point that no responsible, thinking person can any longer deny that this is a real problem.
But science is not the only force that has compelled this White House and others to see that it is in their political interest to go public with their concern about this challenge. Equally important, I believe, is the fact that this Administration has become politically isolated on this issue, as governors and congressional leaders have stepped up and not only acknowledged the challenge but tried to shape real solutions.
The announcement last week by the five Western governors is a perfect example of this. People are not happy about the lack of leadership on this issue from Washington, and they’re setting out to fill the void.
Under the western governors’ agreement, New Mexico would join with Arizona, California, Oregon and Washington to set a regional target for greenhouse gas emissions. And, by August 2008, the states will establish a market-based system to enable companies and industries to meet the target as cost-effectively as possible. These five states combined emit more carbon dioxide than Canada, while accounting for more than 11 percent of total U.S. emissions. So this is a significant achievement.
New Mexico also is one of 12 U.S. states that have adopted their own statewide targets for capping and, ultimately, reducing their greenhouse gas emissions. And New Mexico’s are among the most ambitious targets out there--emissions will reach 2000 levels by 2012, they will be 10 percent below 2000 levels by 2020, and 75 percent below 2000 levels by 2050.
In December, Governor Richardson signed an executive order to help the state reach its targets. Among the steps he approved were the creation of a greenhouse gas registry, advances in technology to capture and store carbon emissions from power plants, and the promotion of renewable fuels.
New Mexico is the first major coal, oil and gas-producing state to set targets like these. New Mexico also is working with its neighbors in Arizona on a plan called the Southwest Climate Change Initiative. The goal: to pursue collaborative opportunities to reduce emissions.
The residents of this state deserve to be proud of all of the forward-looking things that are happening right here to address climate change. But New Mexico is not alone among the states. Over the past several years, lawmakers from coast to coast have been embracing new programs and policies to reduce their states’ greenhouse gas emissions.
California, like New Mexico, established an ambitious greenhouse gas emissions target—and California has gone the next step and passed legislation, with real enforcement, to give the targets the force of law. California also has taken steps to begin regulating carbon dioxide emissions from cars and trucks (a policy that 10 other states are poised to follow if it survives a legal challenge from the automakers). If the courts uphold it, California’s new standard for vehicles will reduce annual greenhouse gas emissions in the state by 30 million tons by 2020.
Many, many states are taking steps to rein in their emissions. For example, 22 states, including large emitters like Texas and California, have required that electric utilities generate a specified amount of electricity from renewable sources. Twenty-eight states have climate action plans.
And other states are working across their borders in the same spirit as New Mexico and its western neighbors. Seven Northeastern and Mid-Atlantic states have signed their own regional initiative. Known as RGGI, it is aimed at reducing carbon dioxide emissions from power plants in the region.
Now, you might think that one state’s actions could not possibly affect a global problem like climate change. But if you combine the RGGI states with the five western states that are taking collaborative action, that’s 22 percent of U.S. emissions that could soon be subject to emission targets under a market-based system. If all of these states were a single country, they would be the fourth largest emitting nation in the world. And consider this: California’s emissions exceed those of Brazil. Texas comes out ahead of Canada, the UK and Mexico. And Illinois produces more CO2 than the Netherlands.
States are a significant part of the climate problem, and many of them are showing they can be a significant part of the solution as well.
The states also are showing that it is politically possible to take action on this issue. In November, Governor Richardson was reelected to office with the support of 69 percent of New Mexico voters. It was the largest margin of victory for any governor in the history of the state. Think his support for serious action on climate change hurt him at the polls? Doesn’t look like it.
The same goes for California Governor Arnold Schwarzenegger. Polls have confirmed that his strong support for climate action helped him enormously with California voters in the 2006 election. The governor won the election with a strong 56-percent majority of the vote, vs. 39 percent for his Democratic opponent.
So, yes, the politics of climate change are different today. And it is not only because state leaders are stepping up and advancing solutions to the problem. Business leaders, too, have gotten into the act—making the case that it is possible to protect the climate while also protecting—and, in many cases, advancing—our goals for economic growth.
At the Pew Center, we work with a council of leading businesses that are committed to protecting the climate. Our Business Environmental Leadership Council began with 13 companies; it now includes more than 40 companies representing more than 3 million employees and with a combined market value of over $2.4 trillion. Members include a who’s who of U.S. corporate leadership, from Alcoa and GE to IBM and Intel, and many more. What are these companies doing to protect the climate? Here are a couple of examples: Over the last 20 years, Alcoa has reduced the electricity required to produce a ton of aluminum by 7.5 percent. Another Council member, IBM, has instituted energy conservation measures that resulted in a savings of 12.8 billion kilowatt hours of electricity between 1990 and 2002. The resulting reduction in carbon dioxide emissions: 7.8 million tons. And the resulting savings to the company’s bottom line: $729 million in reduced energy costs.
We can’t cut emissions? These companies don’t think so. And they’re showing it’s possible to do so in ways that do not compromise economic growth.
For many if not all of these companies, addressing climate change is about both opportunity and risk. Many business leaders see real risks to their operations from climate change. According to the global insurance giant, Allianz, climate change already is increasing the potential for property damage at a rate of between 2 and 4 percent every year. Tourism, agriculture, insurance, finance … all of these industries (and more) face serious and compelling risks. And consider the risks for electric utilities and other businesses that do nothing to address this issue now—and then are forced to play a costly game of catch-up down the road as governments finally (and inevitably) get serious about reducing emissions.
On the other hand, there are also many obvious opportunities tied to developing and deploying new and emerging low-carbon technologies. GE, for example, has committed to doubling its investment in environmental technologies to $1.5 billion by 2010. That is the equivalent of starting a new Fortune 250 company focused exclusively on clean technology.
Ten years ago, corporate America was a reliable ally for those opposed to any kind of serious action to address climate change. Well, that’s just not the case any more. And, in fact, many of the companies we work with are combining independent, voluntary action to reduce their emissions and develop climate-friendly technologies with high-profile public support for new policies to protect the climate.
Just last month, several of the businesses on our Council joined with the Pew Center and others in a high-profile appeal for U.S. government action to address climate change. The group is known as the U.S. Climate Action Partnership, and this wasn’t just a blanket call for government to do something. Rather, the USCAP group issued a specific proposal with specific targets and timetables—a real plan of action to slow, stop and reverse U.S. emissions.
Among the companies that were part of this unique call-to-action was Albuquerque’s own PNM Resources. PNM, of course, is the energy holding company whose utility and energy subsidiaries provide power to 941,000 homes and business in New Mexico and Texas.
Now, think for a moment about how an announcement like this changes the political landscape on this issue. When Fortune 500 CEOs take a stand for policies that in the past were tagged by private sector leaders as extreme or unwarranted, and worse, it moves the politics to a new place. Like the state leaders who have come out in favor of strong and effective policies, the business leaders we’re working with are sending a clear message to Washington, and the message is this: We must act to address this issue now, and we can do it without putting our economy at risk.
And Washington, finally, is beginning to listen. Beyond the President’s rhetorical bows to climate change, our nation’s elected leaders are laying the groundwork for substantive action on this issue in the months and years ahead. In 2005, the U.S. Senate passed a bipartisan measure calling for a national, mandatory, market-based program to slow, stop and, ultimately, reverse the growth in U.S. greenhouse gas emissions. Although the measure was nonbinding, it marked the first time the Senate has gone on record to support mandatory action on this issue.
And now, there is a new Congress in place with leaders who are strong supporters of climate action. The change at the top of the U.S. Senate committee with jurisdiction over climate change is a case in point. Gone as chairman is Senator James Inhofe of Oklahoma, who infamously referred to climate change as a quote-unquote “great hoax.” Replacing him is Senator Barbara Boxer of California, who could not pose more of a contrast as author of one of the most aggressive climate bills yet introduced in Congress.
In addition to Senator Boxer at the head of the Environment and Public Works Committee, we now have a Senate Majority Leader and a Speaker of the House who consistently have supported mandatory climate action. And we have leaders of other key committees on both sides of Capitol Hill who have expressed their support for action.
House Speaker Nancy Pelosi has signaled her intention to have the House pass a climate bill by July 4. And the biggest political development of the year on this issue may be that Congressman John Dingell of Detroit now agrees that it’s time to act.
As chairman of the powerful House Committee on Energy and Commerce, Congressman Dingell has long been considered an obstacle to serious action on climate change. But now he is saying that his committee will report a bill by early June. And his support for action, I believe, is very likely to bring in other Democrats who have been less than enthusiastic, and more Republicans too.
What all of these developments point to, if all the stars align, is a so-called “cap-and-trade” bill emerging from Congress, potentially before the 2008 elections. In the Senate alone, there are currently five bills proposing some form of cap-and-trade program for greenhouse gas emissions
Cap-and-trade, as most of you know, is a policy that requires emissions reductions while allowing companies to trade emission credits. The most important benefit of this approach: it establishes a value for emissions reductions, as well as an economic advantage for technologies that can achieve them.
The cap-and-trade model already has proven successful in this country in reducing emissions of the pollutants that cause acid rain. We know it can work. Cap-and-trade, in fact, is how California intends to achieve its emission targets. It is also the basis for the multi-state plans I mentioned here in the West and back East as well.
So there is, in fact, a great deal of movement on this issue in Washington. And there is additional pressure for solutions due to the upcoming 2008 Presidential contest. (Well, I suppose you can’t call it an “upcoming” contest anymore—sadly for all of us, it is already well under way).
In any case, on the Democratic side you have a number of candidates who have pledged to make climate change an important part of their platforms. And, among the Republicans there is U.S. Senator John McCain, who co-wrote the first cap-and-trade bill in the U.S. Congress way back in 2003. Conveniently, his measure currently is co-sponsored by two colleagues named Obama and Clinton (meaning we could see at least one point of agreement during the 2008 presidential debates).
Given the support for climate action among these high-profile contenders for President, I believe that the words “cap and trade” will become an important part of the political dialogue in this country in the lead-up to the 2008 election. And I also believe that, given the changed politics on this issue, it is plausible that the United States could have this kind of mandatory policy in place by 2008, and it’s likely we will have such a policy by 2010.
But implementing a cap-and-trade policy, while critical, is not all we need to do. We need a wider range of policies. We need to invest in research to develop some of the most critical, long-term, climate-friendly technologies. And we need policies to ensure that technologies that reduce emissions can gain a solid foothold in the marketplace.
And then there are policies aimed at specific sectors of the economy. For example, governments around the world have adopted more stringent policies than the United States to reduce tailpipe greenhouse gas emissions and/or increase the fuel economy of cars and trucks. Even China has higher standards than we do. If all of these countries are doing this and we aren’t, that says to me that it’s possible—that, despite the automobile companies’ resistance, technologies exist to reduce emissions from this sector. And by adopting tougher but reasonable standards, we can hasten the rollout of cost-effective, commercially available technology to reduce vehicle emissions.
It is also going to take international policies. This, too, is not in question. Climate change is a global problem requiring global action. Even if we were to get smarter about reducing the United States’ contribution to climate change, global energy use will continue to surge and climate change will remain a significant threat. We cannot protect the climate without a global framework that enlists all countries to do their part to reduce emissions, and that provides poorer countries with the support they need to do so.
And, in fact, a number of countries around the world already are taking action on this issue, which is another factor that has changed the political landscape here in the United States. The European Union, for example, has adopted its own emissions trading scheme. And countries like the United Kingdom have embraced ambitious goals for reducing their emissions and developing low-carbon energy sources.
While all of these other countries are moving forward, however cautiously, and trying to figure out how to reduce their emissions, the United States until now has remained largely on the sidelines. And we have remained on the sidelines despite the enormous risks that climate change poses for our economy—and the enormous economic opportunities as well.
As both the risks and the opportunities become clearer to U.S. leaders, the political landscape will continue to change. And we will see our country come around, once and for all, and embrace real action to protect the climate—and to ensure that our water supplies and other resources are protected as well.
And, by real action, I am talking about more than a prevention-only approach. Although reducing greenhouse gas emissions is critical to limiting the ultimate damage caused by climate change, it is clear that we must also adapt to what is already here and coming in the near future. The latest IPCC report tells us that, even if we stopped emitting greenhouse gases today, the average temperature of the earth would continue to rise significantly for decades to come, precipitation patterns would continue to change, and sea level would continue to rise for hundreds of years because of the inertia in the climate system. Obviously, we will not stop emitting greenhouse gases today, so the changes to come will be significant. We are going to have to adapt.
By reducing your water demand, you—the xeriscape community—are in the vanguard of the grassroots adaptation movement. But in the same way that voluntary action alone is not enough to prevent the worst effects of climate change, voluntary action alone will not ensure we can adapt. There is an essential role for government and public policy, including lots of planning at the local and state levels for droughts, storms, water shortages, extreme heat and other consequences. Water supplies, storm drainage, peak power capacity, emergency care and relief systems, evacuation planning—all of these and more will have to be enhanced.
There will be large costs associated with adaptation but there will be no choice, as the alternative is simply to suffer. Fortunately, we do have an opportunity, through aggressive mitigation, to minimize both the ultimate costs of adaptation and the amount of human suffering that our children and grandchildren will have to endure in the future. Every dollar spent avoiding climate change will save more dollars spent later on adapting to and repairing the damage.
Looking forward, the challenge of reaching agreement on effective national climate policies is not all that different from the challenges you face as gardeners. We need to prepare the soil by making our opinions known. We need to turn all of these buds and shoots I have talked about into healthy, thriving plants. And we need to pay close attention to issues of design—how we design policies to work together in the most effective ways.
In closing, I will go back to the question posed by the child in the caravan of camels: “Are we there yet?” And the answer is, we are certainly not. But unlike the nomads in the cartoon, we at least have a clear destination. We just need to get going.
Thank you very much.
Full article available (PDF)
This In-Brief describes how the built environment can make an important contribution to climate change mitigation while providing more livable spaces. It concludes that with current technologies and the expansion of a few key policies, significant reductions in greenhouse gases can be realized in the near term. Furthermore, combining technology research and development with clear and sustained climate and energy policies would drive more dramatic reductions over time.
Download the In-Brief (pdf)
This In-Brief draws heavily on the Pew Center report entitled Towards a Climate-Friendly Built Environment.
November 16, 2006
Contact: Katie Mandes, (703) 516-0606
BUILDING SECTOR IS FOUNDATION OF U.S. CLIMATE CHANGE SOLUTIONS
Pew Center Addresses Building Industry at Denver Conference
Denver, CO- Energy used in residential, commercial, and industrial buildings produces about 43 percent of U.S. emissions of carbon dioxide, and these emissions are growing as Americans build more buildings and bigger homes. This makes the building sector the largest source of American emissions of the greenhouse gases (GHGs) that cause climate change. Numerous stakeholders have begun acting to address the built environment’s role in climate change, and it is imperative that their commitment to green principles and innovation increases so that the building sector can reduce its contribution to climate change.
During a speech yesterday at the Greenbuild International Conference and Expo in Denver, Colorado, Eileen Claussen, President of the Pew Center on Global Climate Change, called on the building sector to play a more definitive role in America’s efforts to address climate change. “Building standards need to be strengthened and we need to factor the very real threat of climate change into every new building that is constructed. Low or zero emission buildings should be our goal.” Ms. Claussen challenged the sector to provide the foundation for U.S. climate solutions. The speech was given in conjunction with the release of a new In-Brief by the Pew Center entitled “Building Solutions to Climate Change.”
The In-Brief describes how the built environment can make an important contribution to climate change mitigation while providing more livable spaces. It concludes that with current technologies and the expansion of a few key policies, significant reductions in greenhouse gases can be realized in the near term. Furthermore, combining technology research and development with clear and sustained climate and energy policies would drive more dramatic reductions over time.
Ms. Claussen implored the building community to take the lead in cutting emissions of greenhouse gases. “If we do it right, protecting the climate could mean new industries, new markets, and new jobs for localities, states, and nations that successfully position themselves as centers of innovation and technology development for a low-carbon world.”
The Pew Center was established in May 1998 by The Pew Charitable Trusts, one of the United States’ largest philanthropies and an influential voice in efforts to improve the quality of the environment. The Pew Center is an independent, nonprofit, and non-partisan organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.
"Getting Ahead of the Curve: Corporate Strategies That Address Climate Change" Corporate Strategies Workshop
October 18, 2006
At this workshop, over a hundred business, academic, and NGO leaders convened to discuss the findings of a new Pew Center report, Getting Ahead of the Curve: Corporate Strategies That Address Climate Change. View the agenda by clicking here.
The report, authored by Dr. Andrew Hoffman of the University of Michigan, lays out a step-by-step approach for companies to reshape their core business strategies in order to succeed in a marketplace where greenhouse gases (GHGs) are regulated and carbon-efficiency is in demand. A number of key themes surfaced from the report and workshop discussions:
- Timing needs to be strategic. Some companies acknowledge the dangers of starting too early on climate action, while others highlight the risks of starting too late.
- The ultimate goal is a game-changing strategy. Such a strategy allows a company to leap far ahead of competitiors by creating or reshaping key markets that they can dominate. This requires a concerted effort, combining key functional areas of a company, such as research and development, marketing, supply chain management and policy engagement.
- An appropriate level of commitment needs to be made. While the companies in this report are leaders in their industries, some caution against getting too far ahead of the competition.
- Companies need to influence policy. Any policy that regulates GHG emissions will constitute a major market shift, setting "new" rules of the game. Companies in the report feel they cannot leave the ultimate form of such regulations to chance and must earn a seat at the policy making table.
- Companies need to create business opportunities. Companies with a history of climate-related activity are shifting their strategies from a focus on risk management and bottom-line protection to instead emphasize business opportunities and top-line enhancements.
Corporate Strategies Workshop Agenda
Lunch Keynote Speaker
- John Ranieri, Vice President and General Manager of Bio-Based Materials -- Energy and Specialties, DuPont (pdf of presentation - 10MB).
Overview of report process, key findings, and future research
- Andy Hoffman (pdf), Holcim (US) Professor of Sustainable Enterprise, University of Michigan
- Truman Semans (pdf), Director for Markets and Business Strategy, Pew Center on Global Climate Change
- Representatives from Report Case Study Companies
- Randy Armstrong, Manager, Compliance Assurance, Shell Oil Company
- Eric Kuhn, Manager, Climate Change Programs, Duke Energy
- Ed Mongan, Director, Energy and Environment, DuPont
- Mark Way, Head, Sustainability Issue Management & Reporting Team, Swiss Re
Click here to view streaming video of a subsequent workshop on the Pew Center's Corporate Strategies report held November 10, 2006, at the University of Michigan, which featured a detailed question and answer period between conference attendees and case study company representatives.
Panel #1: McKinsey & Company
- Kenneth Ostrowski, Director of the Americas Electric Power and Natural Gas Practice, McKinsey & Company (Chair)
- Jon Creyts, Principal, McKinsey & Company
- Rick Duke, Engagement Manager, McKinsey & Company
- Per-Anders Enkvist, Associate Partner, McKinsey & Company
- Christoph Grobbel, Senior Practice Expert of the European Electric Power and Natural Gas Practice, McKinsey & Company
- Steve Mitnick, Senior Advisor, McKinsey & Company
The presentations from the McKinsey & Company panel discussion are confidential. Those interested in McKinsey's work on climate change should contact Sally Lindsay, Senior Practice Manager, McKinsey & Company (202-662-2201, or Sally_Lindsay@mckinsey.com).
Panel #2: Perspectives on Sustainability, Legal, and Communications Dimensions of Climate Change
- Chuck Bennett, Senior Research Associate, The Conference Board
- Ken Berlin, Attorney and Partner, Skadden, Arps, Slate, Meagher & Flom LLP
- Bob Knott, Executive Vice President, Edelman
October 18, 2006
Contact: Katie Mandes, (703) 516-0606
PEW CENTER RELEASES COMPREHENSIVE GUIDE TO DEVELOPING CLIMATE CHANGE RELATED BUSINESS STRATEGIES
Report Shows Inaction No Longer a Viable Option
Washington, DC -- The Pew Center on Global Climate Change today released, “Getting Ahead of the Curve: Corporate Strategies That Address Climate Change,” a how to guide for corporate decision makers as they navigate rapidly changing global markets. The report presents an in-depth look at the development and implementation of corporate strategies that take into account climate-related risks and opportunities.
The report, authored by Andrew Hoffman of the University of Michigan, lays out a step-by-step approach for companies to reshape their core business strategies in order to succeed in a future marketplace where greenhouse gases are regulated and carbon-efficiency is in demand. The research shows a growing consensus among corporate leaders that taking action on climate change is a sensible business decision. Many of the companies highlighted in the report are shifting their focus from managing the financial risks of climate change to exploiting new business opportunities for energy efficient and low-carbon products and services.
Relying on six highly detailed, on-site case studies, as well as results from a 100-question survey completed by 31 companies, the report offers a unique and in-depth look at the development and implementation of corporate strategies that address climate change. The featured case studies include Alcoa, Cinergy (now Duke Energy), DuPont, Shell, Swiss Re, and Whirlpool Corporation.
One of the clearest conclusions is that businesses need to engage actively with government in the development of climate policy. Of 31 major corporations polled by the report author, nearly all companies believe that federal greenhouse gas standards are imminent, and 84 percent of these companies believe regulations will take effect before 2015. The report offers policy makers insight into how companies are moving forward on climate change and how they can most effectively engage in the policy discussion.
“If you look at what is happening today at the state level and in the Congress, a proactive approach in the policy arena clearly makes sound business sense” said the Pew Center’s Eileen Claussen. “In the corporate world, inaction is no longer an option.”
Lessons learned at each step of the strategy development process are presented and four overarching themes emerge:
- Strategic timing – For some there is a danger of starting too early; others highlight the risks of starting too late.
- Establishing an appropriate level of commitment – For many companies, uncertain demands from government, the marketplace, and the financial community–coupled with limited hard data and models to guide aggressive action–make it challenging to support extensive expenditures on GHG reductions.
- Influence policy development – Any policy that regulates GHG emissions will certainly constitute a major market shift. Early action is seen as a way for companies to gain credibility and leverage participation in the process of policy.
- Creating business opportunities – positioning to capture emerging opportunities and gain competitive advantage
The research draws from the experience of companies in the Pew Center’s Business Environmental Leadership Council (BELC). The BELC, with 42 companies representing over 3 million employees and a combined market value of more than $2.4 trillion, is the largest US-based association of corporations actively pursuing solutions to climate change. Wal-Mart and Goldman Sachs also gave input.
Representatives from Shell, Alcoa, Duke Energy, DuPont, Swiss Re and Whirlpool Corporation spoke about their companies’ corporate strategies to address climate change today at the National Press Club in Washington DC.
The members of the BELC are: ABB; Air Products; Alcan; Alcoa Inc.; American Electric Power; Bank of America; Baxter International Inc.; The Boeing Company; BP; California Portland Cement; CH2M HILL; Cummins Inc.; Deutsche Telekom; DTE Energy; Duke Energy; DuPont; Entergy; Exelon; GE; Georgia-Pacific; Hewlett-Packard Company; Holcim (US) Inc.; IBM; Intel; Interface Inc.; John Hancock Financial Services; Lockheed Martin; Marsh Novartis; Ontario Power Generation; PG&E Corporation; Rio Tinto; Rohm and Haas; Royal Dutch/Shell; SC Johnson; Sunoco; Toyota; TransAlta; United Technologies; Weyerhaeuser; Whirlpool Corporation; and Wisconsin Energy Corporation.
A copy of this and other Pew Center reports is available at www.c2es.org.
The Pew Center was established in May 1998 by The Pew Charitable Trusts, one of the United States’ largest philanthropies and an influential voice in efforts to improve the quality of the environment. The Pew Center is an independent, nonprofit, and non-partisan organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.