An urgent deadline is approaching, one that the inhabitants of this little blue-green planet are on track to miss. Unfortunately, the consequences of letting this deadline slide by are likely far more dire than a citation or a fine. Think cataclysmic.
The deadline in question: The IPCC (Intergovernmental Panel on Climate Change) stated in 2007 that by 2050, developed economies must reduce GHG (greenhouse gas) emissions by at least 80 percent in order to avoid dangerous climate change. Yet despite the efforts of global companies to cut emissions, Earthlings aren't on pace to meet the necessary reductions in GHGs until 2089, 39 years too late.
Such are the findings of "The Carbon Chasm" [PDF], a report released this week by The Carbon Disclosure Project, a nonprofit organization that holds the largest database of corporate climate change information in the world. The report, written in conjunction with BT and drawing on data from and interviews with companies such as Cisco, Microsoft, IBM, and Nokia, isn't entirely doom and gloom. It provides recommendations for organizations to develop and hone GHG-reduction targets to help the global community meet the critical 2050 deadline.
One of the key recommendations from the CDP report: Every company should set a CO2-e (carbon dioxide equivalent, which covers the six major greenhouse gases, normalized to CO2) reduction target. As it stands, companies establish various types of goals that can fall under the umbrella of environmental stewardship. Some measure in terms of CO2 reduction ("We'll shrink our annual carbon emissions by X percent by 2015"), whereas others measure in terms of energy consumption ("We'll reduce energy consumption by X percent by 2015") or energy efficiency. Some organizations establish more than one type of target, though among the CDP's Global 100, CO2-e targets are most popular; 62 percent of the targets are CO2-related, compared to 15 percent based on energy consumption and 9 percent based on energy efficiency.
Yes, cutting GHG emissions is generally intertwined with reducing energy consumption or boosting energy efficiency. Using the latter as a target is "often favored because of the more direct link to reduction in energy costs as well as emissions." But by setting a clear target for shrinking your organization's carbon footprint, you elevate the critical task of cutting carbon emissions from a by-product to a key business priority.
Setting a target and tracking your progress does require rolling up your sleeves and digging into your organization's operations. As with any green project, measurement is critical to setting a starting point, developing targets, and assessing progress. It starts with establishing your baseline, then identifying hotspots for emissions reductions. Selecting a methodology and target scope follows, then you set your target.
According to the CDP, "most companies use the measurement process to identify the highest impact areas or best opportunities for reduction and targets are developed from there. The other major consideration ... is the assessment of what is reasonable, aggressive and achievable and will have the highest impact from an emissions-reduction perspective." Technology offerings from companies such as CA and Microsoft have emerged of late to help organizations measure and track eco-oriented projects.
Setting targets -- particularly specific targets over a long period of time -- can be a real challenge. For example, organizations must determine whether to set absolute missions reduction targets or intensity emissions reduction targets. An absolute target is firm -- that is, X tons of CO2 in 5 years. An intensity percentage target refers to a goal to "reduce over time the ratio of emissions relative to a business metric " such as revenue, sales, or production unit.
There are pros and cons to both types of targets. Absolute targets are clear and transparent -- but can be potentially restrictive to business growth. After all, if your organization enjoys a significant growth spurt, it's probable that you'll need to use more electricity, fuel, and/or other carbon-producing resources. Thus, you might face the choice of restricting growth or breaking a pledge to cut GHG emissions.
An intensity percentage target is vague and potentially unappealing to shareholders. However, it's flexible in that it allows for growth and even a potential increase in emissions. (The CDP found that among the Global 100, absolute targets outnumber intensity targets at a nearly two-to-one ratio.)
[ Last November, IBM reported cuts in energy consumption but increased carbon emissions. ]
One final observation from the report: Long-term planning is essential, yet only "84 percent of target deadlines are set to 2012 or before. [This] suggests that businesses are waiting to hear outcomes of the United Nations Climate Change Conference in Copenhagen this December, before setting longer-term reduction goals." Given that companies aren't looking far into the future when setting their carbon-reduction goals, the CDP suggests, "Governments need to agree on clear medium- and long-term reduction goals in Copenhagen to provide a framework for business to set required targets to stimulate companies to embrace longer-term targets."
[ Governments already have gotten involved in steering companies toward cutting CO2 emissions. ]
Heartening though it may be to see more and more companies worldwide rising to the challenge to reduce GHG emissions -- sometimes prodded by customers, governmental bodies, or stockholders -- there's clearly plenty more work that needs to be done. 2050 may seem like a far-away date, and I certainly concede that the IPCC's deadline may be off by a decade. Maybe we'll know more in December as to what needs to be done by when.
In the meantime, it's incumbent on organizations to work harder to cut emissions and to be better environmental stewards -- and not necessarily because the government is telling them to. Yes, there are often cost savings and other potential business benefits associated with reducing CO2 emissions. Preserving the planet, however, is the biggest benefit of all.
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