The greatest environmental challenge of our time is without a doubt climate change. Over the coming years and decades climate change will have a stark influence on our lives. Not only through the physical changes in the climate, but also through changes in our energy consumption, travel patterns and many other aspects of our life. Companies will not be unaffected by these changes. Markets will change, as will client requirements and there will be a steep rise in legislation with regards to climate change and greenhouse gas emissions. Developing a comprehensive climate change strategy is therefore an essential part of good business management. This article gives a brief description of the elements that each corporate climate change strategy should include.
The management of climate change should adopt two distinct strategies: climate change mitigation and climate change adaptation. Climate change mitigation deals with the reduction in greenhouse gases to the earth’s atmosphere. Carbon foot-printing and carbon accounting form typical measures that are used within the framework of this strategy. Climate change adaptation revolves around measures that address the changes and vulnerabilities of the organisation that will be present as a result of the inevitable physical change in our climate. A good corporate climate change strategy addresses both mitigation and adaptation.
1. Understanding greenhouse gas emissions of the organisation
An understanding of the organisation’s greenhouse gas emissions is fundamental in every credible corporate climate change strategy. To achieve this a comprehensive greenhouse gas inventory should be made. The inventory is a first step to manage and reduce the emissions, which are also key elements of a corporate climate change strategy. The inventory combined with the management and reduction form the core of a greenhouse gas accounting system. At this moment there are two internationally recognised systems for greenhouse gas accounting available. These are the ISO 14064 standard and the Greenhouse Gas Protocol.
2. Understanding climate change vulnerability
Most large organisations have started to make a greenhouse gas inventory and have adopted measures to reduce their carbon footprint. As I described in the introduction, climate change adaptation also forms an important part of a comprehensive corporate climate change strategy. To develop an understanding of an organisation’s vulnerability to climate change a review of the operations, products and services, transport needs should be made as well as an understanding of the physical changes to the climate in which the organisation operates. There are no clear guidelines on how to develop an understanding of the climate change vulnerability, although the United Nations Panel on Climate Change has published a range of reports documenting the predicted changes to the climate in each of the global regions over the course of the current century. In addition to these global publications, many governments have funded research predicting the potential climate change at a national level.
3. Commit to reduction in GHG emissions
As part of credible corporate climate change strategy, a commitment to reduce greenhouse gas emissions should be made at the most senior level in the organisation.
4. Develop internal corporate capacity
Development of internal capacity is an essential element to drive through improvements to both the greenhouse gas emissions and the climate change vulnerability. It is the people within the organisation that are best placed to identify practical solutions that will support any improvement programme. Ensuring an adequate level of knowledge and understanding within the members of staff with regards to the climate change issues that are facing the organisation is therefore a key element in the corporate climate change strategy.
5. Work with supply chain and engage with stakeholders
A significant contribution to the carbon footprint of a product that an organisation produces is made during the processing by suppliers. In addition an organisation should be aware of the climate change vulnerability of its own supply chain. A corporate climate change strategy should therefore address the role of the supply chain in managing climate change issues.
6. Adopt and implement improvement action plan
The first five elements provide a thorough understanding of the climate change issues facing an organisation. Based on this understanding an improvement plan should be drawn up. As with any credible action plan the actions should consist of SMART targets, be fully funded, and be relevant to the organisations climate change threats and opportunities.
7. Publish an annual report
The final element is the publication of an annual report that demonstrate progress against the action plan, re-affirms the commitment to improvement and accounts for the carbon emissions.