Climate change is forcing companies of all sizes to rethink the way they do business.. to find ways to sustain growth in a low, rather than high, carbon economy.
Leadership, focus and commitment are success factors in creating a climate for change and a business that strives towards a zero carbon footprint. Reducing carbon is no different from many other management tasks to improve a company’s performance and reputation, and prudent companies embed such thinking into their core business management systems.
A comprehensive climate change strategy can affect almost every aspect of the operations of a company. As with all organizational change, a phased approach with strong leadership, commitment to continual improvement, effective employee engagement, ongoing monitoring and regular evaluation is necessary.
However, the signal to staff, shareholders and other stakeholders of the company’s intentions is also important. Signals move markets and the signal that management intends to reduce emissions cannot be overstated. Telling your staff that your company will reduce carbon emissions may seem simplistic, but even simple actions, such as a notice on the company’s intranet and in the common room, can be effective. When the US Environmental Protection Agency wanted to promote the Green Lights programme for energy efficiency lighting, for example, they wrote directly to CEOs. Many companies reported that the simple action of posting the letter to company bulletin boards motivated staff, with positive results following. The simple act of asking for ideas leads to some innovative solutions.
Forming a climate action team can include a diverse staff, including representatives from operations management, design, product/service development, procurement, marketing, communications and accounting. The team can then produce a strategy with specific goals. Specific targets will help to provide focus and goalposts against which to track progress.
Some companies have used a continual improvement process called ‘energy kaizen’ (from kai meaning ‘change,’ and zen meaning ‘for the better’), a process of implementing change and investing in thinking and changing processes. In the case of Kodak, an energy kaizen led to immediate changes in climate and lighting controls and a reduction in unnecessary ventilation exhaust. This helped the company stop losing US$1 million a year in unnecessary electricity costs at no capital outlay.
The team may also have to engage your board members to approve investments that have varying returns. As mentioned above, some carbon reductions can be made just by simple changes to existing processes using only human capital as well as the cost of coordination and control. Others however, require financial capital that may have varying returns and payback periods. Even with lucrative returns, however, businesses can be reluctant to part with reserve or borrowed cash. This is where leadership and a strategic commitment can really make a difference.
Not always an easy sell
In 2003, the world’s largest shipper, FedEx, announced a programme to replace the company’s 30,000 medium duty trucks with diesel-electric hybrids over the next 10 years. Four years later, FedEx has purchased fewer than 100 hybrid trucks, or less than one-third of one per cent of its fleet, although fuel savings should pay for the higher costs of hybrids over the 10 year lifespan of the vehicles. FedEx, which reported record profits of US$2 billion for the fiscal year that ended May 31, decided that breaking even over a decade wasn’t the best use of company capital. According to Business Week, the company said its fiduciary responsibility to shareholders meant it couldn’t subsidise the development of this technology for their competitors.
Mindy S Lubber, Director of INCR, and Russell Read, California Public Employees’ Retirement System, look at the pressure put on companies to make climate change a priority issue by investors. 
