Best Practices and Policy Expectations CLIMATE SERIES 2009 Survey of Caring for Climate Signatories CARING FOR 2 3 Table of Contents Acknowledgements Foreword 5 The UN Global Compact Office would like to thank the Danish Government and the Confederation of Norwegian Enterprise for their generous support to this report. Executive Summary  6 Methodology  9 Section A: Companies and Climate Practices 10 1. Company Performance  10 2. Best Practices  12 3. Leadership  18 About the United Nations Global Compact Launched in 2000, the United Nations Global Compact is a both a policy platform and a practical framework 4. C  ompanies in Emerging Economies  20 for companies that are committed to sustainability and responsible business practices. As a multi-stakeholder leadership initiative, it seeks to align business operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption and to catalyze actions in Section B: Climate Policy Frameworks  24 support of broader UN goals. It is the world’s largest voluntary corporate citizenship initiative, with over 6,500 signatories based in more than 130 countries. Visit www.unglobalcompact.org. 5. Global Business Initiatives  24 About the United Nations Environment Programme The mission of UNEP is to provide leadership and encourage partnership in caring for the environment by 6. National Policy  26 inspiring, informing and enabling nations and peoples to improve their quality of life without compromising that of future generations. UNEP is headquartered in Nairobi, Kenya, The UNEP Division of Technology, Industry 7. International Policy  32 and Economics (UNEP DTIE) is the division leading the work with business and industry on climate. With its longstanding activities in the areas of sustainable production and consumption, energy, ozone, chemicals, trade, economics, finance and corporate responsibility, the division aims to help decision-makers develop and Appendix 1: adopt policies that are cleaner and safer; make efficient use of natural resources; incorporate environmental costs and reduce pollution and risks for humans and the environment. Visit www.unep.org. Climate Champions Interviewed  36 Appendix 2: Climate Success Stories  38 Editor, Caring for Climate Series: Cecilie Arnesen Hultmann Designer: Tannaz Fassihi Disclaimer The views expressed in this publication are not necessarily those of the United Nations (including the UN Global Compact Office and the UN Environment Programme). The inclusion of company examples in this publication is intended strictly for learning purposes and does not constitute an endorsement of the individual companies by the United Nations. The material in this publication may be quoted and used provided there is proper attribution. Cover Photo: © Josef Kubicek 4 5 Foreword Caring for Climate (C4C) was introduced by United Nations Secretary-General Ban Ki-moon in July 2007. The Secretary-General challenged Global Compact participants to exercise leadership on climate issues by: • making climate change a leadership issue for strategy and operations; • setting emission reduction targets and exploring low-carbon technologies; • supporting public policy efforts aimed at achieving low carbon economies; • sharing experiences and publicly disclosing progress made on an annual basis. Less than two years on, Caring for Climate has emerged as the world’s largest and most diversi- fied business engagement platform on climate, with more than 350 corporate signatories in over 60 countries. Less than seven months before the crucial UN Climate Change Conference in Copenhagen, we are releasing several new research studies and reports, the Caring for Climate Series, to offer a range of perspectives on the role of business and investors in tackling climate change. It is our hope that the findings of the C4C Series will inspire more businesses to make climate change a priority issue, so that policy makers will feel more confident that business is ready to be part of the solution. The good news is that businesses from all regions and sectors have already started their journey towards energy efficiency, innovation and GHG emission reductions. Indeed, in many instances businesses have embraced climate action as an opportunity to drive efficiency and to gain competitive advantages, even where Governments have not yet taken action. Caring for Climate participants recognize that climate change is not only an environmen- tal issue. Around the world, businesses are beginning to feel the economic impacts as well. Consequently, some have made the connection between mitigation and adaptation, putting in place long-term measures to address not only emissions, but also food and water concerns and related natural resource issues. In fact, this drive towards energy efficiency and carbon reduc- tions, combined with a proactive management of systemic climate risks, is defining a new level of environmental stewardship. Long-term investors, asset managers and analysts are also begin- ning to integrate these considerations into investment analysis and decision-making. The bad news is that, despite encouraging and inspiring leadership, the number of busi- nesses that are actively addressing climate change is far too small. Too many are still sitting on the fence waiting for others to act first. What is needed now is Government leadership to produce a clear incentive structure that fa- vors good performance and a global deal on climate change that creates certainty. Governments should be confident that change is possible. If Caring for Climate is any indication, business and investors certainly have the capacity and understand the compelling case for taking action. We therefore hope that the C4C Series will give policy makers and negotiators the confidence and inspiration to bring the Copenhagen Climate Conference to a successful conclusion. Claude Fussler Georg Kell Programme Director Executive Director Caring for Climate United Nations Global Compact United Nations Global Compact 6 7 Executive Summary ernments focus on regulation and compliance enforcement. Most signatories also stress the Similarly, signatories believe the most important outcomes from a post-Kyoto agree- need for governments to develop education ment will be participation by all major GHG and awareness-raising activities to address emitters, and financial mechanisms that Introduction stories about successful initiatives to reduce climate change. support reductions in developing countries. The United Nations Global Compact engaged greenhouse gases (presented in Appendix 2). At the international level, signatories out- Other important outcomes will be broad con- GlobeScan to carry out a study of climate Together, they offer a clear definition of line their expectations for a post-Kyoto agree- sensus on emission targets, a cap-and-trade strategies implemented by companies signed corporate ‘leadership’ on climate. They define ment in 2009. They recommend that govern- system that includes developed and develop- up to its Caring for Climate initiative. Caring companies that play a climate leadership role ments meeting in Copenhagen in December ing countries, and an agreement to mobilize for Climate, launched in July 2007, is a vol- as those that provide solutions and lead by 2009 should ensure universal participation business by sector. untary global business initiative to mobilize example; exercise social responsibility beyond by developed and developing nations, as well Finally, it is notable that signatories the business community to develop solutions reducing their own emissions; and demon- as the United States. The governments should addressing climate change in developing which reduce climate risk and create value strate a sincere commitment to addressing provide visionary leadership by actively en- nations are more likely to call for a cap-and- for the company. climate change. suring they reach an agreement, and setting trade scheme applied to developed countries Of 200 signatories, 81 companies respond- The signatories also define climate priori- GHG reduction targets even if compromise only, for global per capita targets, for a global ed to a first round of the survey, and 19 also ties for companies operating in large emerg- is required. Moreover, they should establish taxation system on carbon emissions, and for gave in-depth interviews. Another 16 signato- ing economies: focus on clean and efficient workable mechanisms to help nations meet an agreement that mobilizes industry sector ries responded to a second round of the sur- energy; employ climate-friendly technology; targets, along with incentives for business. by sector. vey, offered to new signatories and signatories and set targets and standards. who had not responded to the first wave. Climate policy frameworks Companies and their climate activities At the network level, signatories appreciate Caring for Climate signatories rate their the UN Caring for Climate initiative. They own performances in positive terms. They most often mention the UN Global Compact rate positively the effectiveness of their own and Caring for Climate as a global business climate change activities overall; almost no initiative that helps companies achieve their company rates its performance on climate as climate change goals. Further, signatories ‘very poor’, and five rate their performance suggest the initiative could strengthen its ad- as ‘excellent’. Signatories also rate posi- visory function, its advocacy to influence gov- tively their performance in specific climate ernments, and its authority — by introducing activities, such as building internal capac- benchmarking and compliance monitoring ity to understand climate change, setting (an approach favoured by almost one-quarter voluntary targets and strategy, and engaging of signatories). A plurality would also like to stakeholders; however, they recognize room see the initiative communicate to reach more for improvement in implementing strategies, companies, and collaborate effectively with and in sharing climate experience with other similar initiatives. companies. According to their responses, the At the national level, signatories describe best performing signatories comprise large government policies that support their companies with high revenues and large climate activities. The most helpful national workforces; these companies report higher- government policy approaches, they indicate, costing climate activities that bring substan- include investing in technology, long-term tial financial benefits. climate planning, encouraging citizens to The signatories appear to be a diverse contribute, and promoting international pol- group of companies with useful experience to icy. However, fewer signatories find national share in addressing climate change. They im- policy approaches that put a cost on carbon to plement a wide range of activities to address be helpful. Notably, signatories that carry out climate change, across a variety of indus- climate activities in developed nations tend to tries and geographical regions, including 36 find mandatory schemes and national regula- countries. Most initiatives are implemented at tory approaches more helpful than their peers a relatively low cost of less than US$1m, and in developing nations, who tend to favour are expected to bring low financial benefits. voluntary schemes. The main difficulties faced are financial con- In addition, the signatories call for na- straints, low awareness, and technical limita- tional government leadership in addressing tions. Strategies to overcome these difficulties climate change, and active governmental rely on technological, internal, and external support for developing and implementing resources. Champions offer a selection of climate solutions. Some would like to see gov- 8 9 Methodology The entire universe of Caring for Climate signatories (about 200 companies, including small and medium-sized companies) were invited by the UNGC to participate in the first wave of the online survey. GlobeScan expected about half of the signatories to participate at minimum (approximately 100 respons- es). In the first round of the survey, 86 responses were received from 81 differ- ent companies. The companies range in size from those with fewer than 1,000 employees to those with more than 50,000 employees, and from revenues of less than $1m to more than $10bn. Over half of the respondents indicate their company has significant operations in a large emerging economy, such as Brazil, China, India, South Africa, and Russia. After presentation and delivery of an in- The Champions interviewed represent a terim report, the survey was extended to variety of regions and sectors. However, al- new signatories and signatories who had not most half operate in the chemical and utilities participated in the first round. Sixteen new sectors (see list on page 36). responses were received in the second round, In addition, the survey benefitted from resulting in 102 responses in total. Findings desk research carried out by students from from the second wave of responses were then the Center for Business and the Environment integrated into the interim report. at Yale University. The study identified actions The first wave of the survey was fielded taken by “Caring for Climate” signatories between July 24 and August 15, 2008. The according to their pledges made under the second wave was fielded between November initiative; examined how signatories’ actions 20 and December 16, 2008. compare to defined best practices for busi- Over half of survey respondents were will- ness solutions to climate change; and made ing to have information about their initiatives recommendations for scaling-up efforts by included in the report, and for their company signatories. to be identified. Notes to Reader Preliminary research All charts in the report present figures in To prepare for the design of the on-line percentages calculated from 102 respondents. survey, in-depth interviews were conducted Total percentages may not equal 100, due with 19 corporate leaders identified by the either to rounding or to multiple responses UN Global Compact Office as ‘Champions’ in given by respondents. In some bar charts, the Caring for Climate initiative. The cham- white space represents the portion of respon- pions were selected among early supporters dents who answer ‘do not know’ or who offer of Caring for Climate, who had developed ‘no answer’ (i.e. DK/NA). comprehensive climate strategies and proac- tive outreach (see list on page 36). Interviews were conducted by telephone, although a small number of interviews were completed electronically to facilitate communication across time zones and language barriers. The interviews took place in June and July, 2008. All interviewees were willing to have infor- mation about initiatives included in the report and the company identified, though some requested a chance to review their entry before publication. Many champions provided written material to summarize their good practices. 10 11 Section A: Companies and Climate Practices rate themselves positively on mobilizing Performance* of own Company (All Signatories) employees around the values of caring for climate, and more than six in ten compa- Building company’s capacity to understand nies rate themselves positively on working 71 19 8 1. Company Performance together with other companies to address implications of climate change Setting voluntary targets / Signatories rate positively the effectiveness of their climate change activities climate change, and championing a wider strategy for energy efficiency 68 18 12 overall; almost no company rates itself as performing very poorly, and five response to climate change among stakehold- Increasing efficiency of energy usage 68 17 13 ers. Over six in ten companies view positively rate their performance as ‘excellent’. Signatories also rate positively their per- their performance on engaging with govern- Mobilizing employees around the values of caring for climate 66 20 13 formance in specific climate activities, such as building internal capacity to ments and/or NGOs to develop policies for a Championing wider response understand climate change, setting voluntary targets and strategy, and engag- low carbon economy. to climate change among stakeholders 63 17 17 ing stakeholders; however, they recognize room for improvement in imple- Sharing experience Innovating to make climate 61 22 14 change mitigation profitable menting strategies, and in sharing climate experience with other companies. Fewer (just over half) view positively their per- Working together with other 61 21 16 companies to address climate change The best performing segment of respondents, it appears, comprises large formance when it comes to sharing relevant Engaging with gvmnts and/or NGOs to companies with high revenues and large workforces; they also report higher- climate change expertise with other compa- develop policies for low carbon economy 61 18 19 nies. Companies appear to find it easier to en- costing climate activities that bring substantial financial benefits. gage in broader advocacy for climate change Reporting publicly on progress 60 15 23 toward climate targets mitigation, than to actually share the techni- Sharing relevant climate change expertise with other companies 54 22 21 cal expertise needed to implement available 1.1 Overall effectiveness themselves positively; they also recognize solutions. One reason for this may be the Inviting third-party verification of progress reported 53 17 27 When asked to rate the overall effective- their performance could improve. absence of forum for such exchange; several Reducing the carbon burden ness of their company’s activities aimed at signatories point to a need for industry-specif- 48 28 17 of company processes mitigating climate change, on a scale of one Building capacity ic networks that would serve this purpose. to ten where one means ‘poor’ and ten means Seven in ten companies feel they perform “excellent,” six in ten signatories rate their positively on building internal capacity 1.3 Typology Positive (7-10) Neutral (5-6) Negative (1-4) company positively (7 to 10) while almost to understand the implications of climate Companies can be categorized into three one-quarter of signatories opt for ‘neutral’ (5 change, although only one in ten companies segments according to how they rate their or 6), and fifteen percent rate their company’s award themselves an ‘excellent’ score on this performance in the areas of education, en- * Rated on the scale of 1 to 10 where one means “poor” and 10 means “excellent”. performance as negative (1 to 4). While activity. Companies appear to have learned gagement, energy usage, and transparency. By almost no company rates itself as perform- quickly, as climate change has become an these ratings, the ‘low performing’ segment is ing very poorly, only seven companies award increasing priority across all sectors. smallest, while the ‘high performing’ segment Companies in the high performing seg- themselves an ‘excellent’ rating. is the largest. ment are more associated than the other Setting targets The high performing segment tends to con- segments with high performance in reducing 1.2 Climate activities Signatories are also generally satisfied with sist of large companies with high revenue and their carbon burden, and in reporting to the When asked to rate company performance the setting of voluntary targets and strategy a large workforce. Companies in this category public. High performers also rate themselves on a number of activities aimed at mitigating for energy efficiency, as well as their per- tend to report that their climate initiatives, highly on setting voluntary targets. Medium climate change, signatories also tend to rate formance in increasing energy efficiency. although associated with higher cost, also performing companies tend to rate themselves However, signatories are more likely to rate bring substantial financial benefits. Medium higher on engagement with other businesses themselves as ‘excellent’ on setting targets performing companies tend to be smaller, and with government, and on innovating to Overall Effectiveness of Company’s Climate Change Activities and strategies for energy efficiency, than with smaller revenues and workforces, and make climate change profitable, increasing ef- for actually implementing such strategies. are associated with climate initiatives that ficiency, and increasing capacity to understand Indeed, companies also rate themselves the bring smaller financial benefits. the implications of climate change. DK/NA (1%) lowest on reducing the carbon burden of Medium performing companies are most Ineffective company processes, with just under half of likely to have significant operations in large signatories awarding themselves a positive emerging economies; seven in ten companies 15% rating. The challenge for signatories, it ap- in this segment operate there. Just over half of pears, will be to move from careful assess- the companies in the high performing segment ment and planning, to actual implementation report significant operations in large emerging Effective of climate strategies. economies, while more than six in ten com- 60% 24% panies in the low performing segment do not Neutral Engaging stakeholders have significant operations in a large emerging Signatories also view positively their per- economy. High performing companies tend to formance when it comes to engaging with report that their major climate change initia- stakeholders, including employees and other tives are based in Australia, Denmark, Germa- companies. Around two-thirds of companies ny, Greece, India, and the United States. 12 13 2. Best Practices Caring for Climate signatories implement a wide range of activities to ad- dress climate change, across a variety of industries and geographical regions, including 35 countries. Most initiatives are implemented at a relatively low cost of less than US$1m, and are expected to bring low financial benefits. The main difficulties faced are financial constraints, low awareness, and techni- cal limitations. Strategies to overcome these difficulties rely on technological, internal, and external resources. Champions offer a selection of stories about successful initiatives to reduce greenhouse gases (see Appendix 2). 2.1 Most significant Reductions climate activity Half of the initiatives described by signatories Signatories were asked to describe their compa- report measured reductions. Several projects ny’s most significant activity or program aimed report significant reductions in greenhouse at addressing climate change. Specifically, they gas emissions reaching over 20 percent, but were asked to summarize reductions achieved, comparing results is complicated by refer- approximate cost and expected financial ences to various baselines and units of mea- benefits, the primary difficulty faced, and the surement. Of the initiatives unable to report strategy used to overcome the difficulty. precise results, several point to the difficulty of measuring emissions and reductions. Sectors Initiatives described by signatories are con- Costs and benefits centrated in a variety of sectors. The largest The costs of the climate activity range from number of initiatives was carried out in the less than US$1m to more than US$10bn; Industrial Goods and Services sector, followed many initiatives were carried out at a cost of by Financial Services, and (equally) Oil and less than US$1m and a majority of projects Gas, Utilities, Chemicals, and Banks. Initia- cost US$100m or less. Around one in ten tives were also undertaken in the sectors initiatives described was undertaken at a cost representing Basic Resources, Telecommunica- of more than US$1bn. tions, Technology, Construction and Materi- The expected financial benefits also range als, Automobiles and Parts, Food and Bever- widely, between no financial benefit to more age, Retail, Travel and Leisure, Personal and than US$10bn. Most activities yield an ex- Household Goods, Health Care, Insurance, pected financial benefit of less than US$1m, and Real Estate. or no financial benefit. However, several proj- ects, such as the Bayer Climate Program, The Locations Sasol Environmental Roadmap, and initiatives Projects are located in 36 different countries by Cierra Total Recycling Solutions, DuPont, across the regions of Africa, Asia, Australia, and Johnson Controls, are expected to benefit Europe, the Middle East, North America, and these companies more than US$1bn. South America. The largest number of initia- tives was undertaken in the United Kingdom, 2.2 Difficulties faced followed by Germany, and (equally) Brazil, When asked to summarize the primary diffi- Denmark, India, Spain, and the United States. culty faced in realizing the initiative, signato- Initiatives were also carried out in Armenia, ries point to difficulties in three main areas: Australia, Bosnia and Herzegovina, Chile, Chi- financial constraints, low awareness, and na, Ecuador, Egypt, Finland, France, Greece, technical limitations. Iceland, Italy, Japan, Jordan, Latvia, Nether- lands, Norway, Pakistan, Philippines, Por- Financial constraints tugal, Republic of Korea, Russia, Singapore, Several signatories note the challenge of South Africa, Sri Lanka, Sweden, Switzerland, developing a business case to justify their Turkey, and Uganda. climate initiatives, or mention difficulties balancing emission reductions with business 14 15 Primary Difficulty of Company’s Initiative actions that collectively achieve substantial Technological approach Companies are then advised to establish a (Unpromted, All Signatories) reductions, success often relies on the engage- Signatory companies have sought to over- firm time target for reductions, and to moni- ment of staff throughout an operation. In come difficulties by using technology-based tor progress using internationally recognized companies with operations in many different approaches that increase their capacity to methodologies in order to validate results and countries and varying degrees of awareness reduce emissions; these include investing ensure that reductions qualify for tradable Cost/financing 16% about climate change, information needs to in new technology and upgrading facilities, permits or flexible mechanisms. Internal awareness/ be disseminated, and attitudes changed, across and developing the capacity to measure and Another piece of advice from champions 15% acceptance/education different corporate cultures; this presents a monitor emissions. is to be proactive and to “be there early.” Business case / formidable challenge. Several champions emphasize the impor- 14% Managerial approach balance reductions and growth The challenge of creating awareness of tance of placing the climate change strategy climate change and acceptance of mitigating Companies have sought to overcome difficul- at the very strategic core of the company, Measure/monitor emissions 11% programs extends to suppliers and custom- ties by mobilizing internal resources; these and making sure it is integrated into regular Customer/ ers; as companies strive to be climate-friendly include developing clear targets and systems, business operations rather than delegated to a 10% supplier engagement/acceptance throughout their supply chain, and to offer defining a climate change policy, building separate department. A company needs to be customers climate-friendly options, it is a business case for an activity, or dedicat- able to communicate where it is going to all Technology access/investment 9% increasingly necessary to educate external ing a team or appointing specialist advisors. its employees; equally it is important to carry Lack of regulations/frameworks/ stakeholders. This is particularly challenging Companies also educate staff about climate out a dialogue with stakeholders and broader 7% gvmnt support in countries where national governments are change to develop internal engagement and society – one champion suggests that this not engaged in the climate issue and where boost commitment. ensures the strategy is sustainable. Finding information 5% general awareness is low. Champions advise companies developing a climate change strategy to take the time External approach Alternative energy access 4% Technical limitations to do it right; to carefully analyze where the Signatories have also sought to overcome Problems with equipment/buildings Climate initiatives are often limited by a lack company can make the biggest impact and difficulties by drawing on external resources; 4% of technical capacity, as limited resources and where it should focus its efforts to reduce these approaches include partnering with other Finding opportunities skills have an impact on companies’ ability emissions. This can be done by establishing companies or organizations, seeking and ob- 2% for further reductions to create effective climate programs. Signato- an inventory of emissions throughout all taining government support, or engaging with ries often note that they have limited access stages of operations, or by carrying out a Life stakeholders. Companies taking this approach to technology, either because of resource Cycle Assessment that measures emissions also attempt to educate stakeholders, and the limitations or a lack of available technology. from individual products, to pinpoint where wider community, about climate change, and Obtaining or developing climate technology reductions may be achieved most efficiently. to advocate for political solutions. growth. As the business grows and produc- requires substantial investment, and employ- tion increases, is often difficult, they find, to ing the new technology requires skills that justify the implementation of programs that the company does not currently possess. limit energy consumption and demand ever- A lack of technology or skills also leads to Difficulties faced • Having everyone in the company bining technology breakthrough and increasing efficiency to lower emissions or to challenges measuring and monitoring emis- (selected comments): understand that everything makes a management. The possible emerg- keep them stable. sions. Signatories note that they have dif- difference, that everyone has to do ing technologies will be not ready • Limiting growth of energy use and Several signatories also note the difficulty of ficulties gathering reliable data; a particular something without some massive investments, increase of GHG emissions while the ensuring funding for an initiative that may challenge faces multinational companies or international clustering of efforts and company is growing by double-digit • As we operate in more than 50 coun- not be considered a core activity; and cost is companies with operations in many different at least not before 20 years numbers tries, caring for climate might not be often a primary obstacle to implementation. areas, where data management sometimes equally important in every country. • Collecting greenhouse gas emissions If implementation of climate change mitigat- varies widely. • Balancing quality, cost, delivery and We must constantly bring forth our data. Our company is a multinational, ing activities is perceived to affect competi- Several signatories also mention difficul- reduction of CO2 emission in busi- environmental policy and educate and so there are important differences in tiveness, by imposing costs or constraining ties with assets, such as old equipment or ness activity and energy-consumption train people, so that climate change data management from each country productivity, a company will struggle to buildings, which affect their ability to carry product will be taken seriously everywhere convince internal and external stakeholders out programs effectively. Some signatories • Complicated legacy inherited from • Very difficult to build the value case of its value. also indicate a lack of government support • In the Middle East region, there are the Soviet time in terms of the envi- for climate change investments as or sufficient regulatory frameworks as an not many companies which are cli- ronmental conditions of the assets most drivers are assumptions that Low awareness obstacle facing activities to reduce emissions. can’t be quantified yet mate-conscious, and therefore many • Implementing of technology related Several signatories mention difficulties arising difficulties stem from unawareness to reduction of GHG in the region was from low awareness and acceptance of climate 2.3 Strategies used • The target of CO2 emission reduc- and lack of systems and infrastruc- a major issue: no Hybrid Vehicles; no change, both internally and externally (among When asked what strategies were used to tion was a soft target, therefore, its ture necessary in order to implement alternative energy providers; lack of suppliers and customers). When employees overcome difficulties, signatories point to relationship with the profitability was any effective climate-friendly project regulations to control the emissions do not understand the purpose or benefits three main approaches, which call primar- difficult to be made at the shop floor • Meeting the climate change chal- of programs to reduce emissions, they do ily on technological, internal, and external level lenge will be obtained through com- not offer cooperation and compliance. Since resources. Most of the difficulties were over- climate activities often require many small come with a combination of the approaches. 16 17 2.4 Success stories When asked to speak about initiatives by their companies that they considered most successful toward reducing greenhouse gases, pany’s name to be associated with their story in the UN Global Compact’s report, although one requested a chance to review the entry before publication. The stories include global, “Companies that play a champions offered a selection of stories (listed national, and local efforts; they are presented in Appendix 2). All are willing to share them by sector: chemical, energy, and other. with other companies, and for their com- leadership role Overcoming difficulties (selected comments): •T  he company has created a greenhouse gas emissions inventory procedure, which permits [it to] calculate and compare data from each country, through standardization, in order to know its global footprint •R  eporting procedures and tools were developed along with the initiation of a corporate- in addressing wide program management team •W  e used measurement, reports, and evidence to move from theory to practical results •W  e installed necessary systems company-wide, and trained staff on how to use it •W  e made massive investments in research and development for new technologies climate change •W  e created an in-depth internal audit to benchmark performance and best practices, that allowed us to set targets and identify the most feasible and effective targets •W  e prepared a mid-range environmental plan to respond to climate change, which was approved by a steering committee composed of company executives •W  e set up a global environmental and obligatory environmental management system are those that •W  e will have to make more calculations to make sure that we use money where we will have the biggest effect •W  e are creating alliances with NGOs, government and private industry to work together •W  e are working hard and relentlessly to educate our clients, partners and stakeholders provide solutions •W  e are using public affairs to persuade governments and regulators of the benefits of energy-efficient technology solutions •W  e are striving to recommend that clients use environmentally better alternatives •W  e are using broader engagement and advocacy to raise awareness of the issue amongst the broader community, government and our customers and lead by •W  e are using constant pressure on the responsible authorities, and lobbying to accelerate the approval process example.” 18 19 3. Leadership their voice to the public policy debate where a dressing climate change, some champions Signatories define companies that play a leadership role in addressing climate business perspective is often lacking. also emphasize that engagement on climate change should be truly central to the com- change as those that provide solutions and lead by example; exercise social Commitment to climate pany; leadership needs to come from the responsibility beyond reducing their own emissions; and demonstrate a sin- Signatories also expect leading companies to top, to be strategic, and long-lasting. One cere commitment to addressing climate change. demonstrate that their commitment to climate champion mentions that addressing climate change mitigation is genuine. To play a leader- change needs to become part of the brand “es- ship role, companies must define their targets sence”. Another champion points to strength and strategy. Leaders show they have a clear vi- of conviction; the company needs to have a Most Important Activities by Climate Leaders order to be leaders, companies need to mea- sion for dealing with climate change; and that genuine intention to contribute on climate (Unpromted, All Signatories) sure and report on their activities. Leaders th e vision comes from the top of the company. change - even if it makes mistakes, a leader is also provide solutions through innovation; In order to play a leadership role in ad- a company with “the right attitude.” more than one-third of signatories mention Innovate 36% innovation of new technologies or products that contribute to reduced emissions as an Targets/strategy/commitment 26% important leadership activity. Leadership companies (selected definitions): Advocate / raise awareness 22% Champions observe that a leader must also recognize the frame of business has changed. • develop/offer true effective solutions to address climate change issues Energy/fuel efficiency/reductions 21% A leader is open to a transformation of the • innovate on new low carbon processes / technologies Develop/use renewable energy business model, such as moving into renew- 20% • lead peers by example and share the knowledge able energy rather than remaining dependent Lead by example / real results 14% on conventional sources. A leader may also be • lead by example in reducing own carbon footprint a company that is truly innovative, introduc- Various environmental initiatives 14% • carry out public awareness, community outreach, and stakeholder engagement ing groundbreaking new products such as the Cooperate / engage / hybrid car. • carry out efforts to bring collaboration between industry and government share knowledge 13% Social responsibility • engage in public policy debate Measure/report emissions 11% Signatories expect climate leaders to reach • work with customers and suppliers to help them improve performance Supplier/customer engagement 11% beyond their own reductions and to affect • encourage employees to reduce impact both at home and at work broader change. Leaders engage with employ- Company specific programs 10% ees, suppliers, and customers to educate and • make commitments towards effective realistic reduction targets Participation in specific initiatives 8% create awareness about climate change. A • set targets and time frames for reducing carbon footprints further step is to engage at industry or corpo- Employee engagement 6% rate levels, through partnerships and initia- • incorporate the climate change policy in their vision statement tives that allow for cooperation and sharing. • consider climate change issues within internal business decision making Use of offsets/credits 4% Furthermore, leaders take the climate issue to a broader community and even to global soci- • The CEO makes public statements on climate change ety, raising awareness and advocating action • Leadership means encouraging change in society. Finding internal solutions for climate on climate change. change isn’t enough. Climate change is a global, societal challenge. Leadership compa- 3.1 Corporate leadership Many champions, when asked what attri- nies will know this and take steps to influence customers, government, suppliers, their activities butes define a company that plays a “leader- industry, and other stakeholder groups in order to change behaviour and drive society When asked to name the three most impor- ship” role in addressing climate change, also towards a low-carbon economy tant activities carried out by companies that highlight the importance of communication play a leadership role in helping society ad- to influence social change. While it is essential dress climate change, signatories emphasize to set targets and to transparently demonstrate three main areas of expectation: providing achieved reductions, champions emphasize solutions, social responsibility, and commi- that leadership implies further social engage- men to climate. ment, sharing best practices with other busi- nesses, and explaining the benefits of address- Providing solutions ing climate change. Leaders in climate change Signatories expect climate leaders to ‘walk may engage with their own employees, as well the talk’ and to lead by example. Leaders as with the public, to educate and promote show others what can be done to achieve real behaviour that reduces personal emissions. emissions reductions and energy savings, and Furthermore, champions suggest leaders to use or develop renewable energy to replace actively engage with a broad range of stake- fossil fuels. Several signatories note that in holders, such as government and NGOs, to add 20 21 4. Companies Operating in Emerging Economies The climate change priorities for companies operating in large emerging economies, according to signatories, are to seek out clean and efficient en- ergy; to employ climate-friendly technology; and to set targets and standards. Over half of survey respondents (56%) indicate that their company has sig- nificant operations in a large emerging economy, such as Brazil, China, India, South Africa, and Russia. 4.1 Priorities for companies Focus on clean and efficient energy in emerging economies Companies operating in emerging economies When signatories were asked what should be should find alternative sources of energy, and the two climate change priorities for compa- focus on energy efficiency. Signatories suggest nies operating in large emerging economies, the companies should source energy locally, three different sets of recommendations and rely on renewable sources; this will help emerge: focus on clean and efficient energy; to develop local low-carbon markets. Compa- use climate-friendly technology; and set tar- nies operating in emerging economies should gets and standards. also develop energy-efficient processes to meet surging energy demands within carbon constraints. Climate Change Priorities for Companies Operating in Champions also mention the Clean Devel- Emerging Economies (Unpromted, All Signatories) opment Mechanism and carbon credits as in- centives for companies operating in develop- ing countries, although they note that these Energy efficiency 32% are incentives for large companies (especially those operating globally) rather than small Renewable/alternative/clean energy 27% ones that may find the process too costly Technology 27% to consider. Other champions observe that government intervention is needed in order Raise awareness / advocate / 18% to create incentives in developing countries, share knowledge in the form of tax incentives, investments in Reduce emissions (in general) 14% renewable energy, etc. Equally, companies Support regulation / operating in developing countries may not international agreements 11% recognize incentives for reducing emissions, Set targets 8% such as energy cost savings, opportunities for making profit, risk management, and reputa- Apply global standards / 7% best practices tion enhancement. Develop management/ 6% strategy/systems Use climate-friendly technology Environmental protection/ 5% Companies should ensure they use the conservation most climate friendly technology available, Plant/preserve forest 5% promoting its introduction into emerging economy operations. By using new and ef- Measure/assess emissions 4% ficient technology, companies can encourage its dissemination, and increase local capaci- Adaptation 3% ties to employ it. 3% Opportunities specific to businesses op- Waste management erating in developing countries include the Water management 3% ability to bypass or “leapfrog” inefficient tech- nologies, and to gain competitive advantage by moving early and avoiding the rising costs of conventional energy use. Access to technology is also emphasized by 22 23 importance of raising awareness among con- per-unit consumption targets that emphasize Priorities for companies in •p  romote technology transfer and the the population sumers to create demand for environmentally efficiency rather than total reductions. emerging economies use of the best available technologies friendly products and an understanding of Respondents also urge a differentiated • be part of national programs on (selected comments): how individuals can save money by becom- approach to climate change activities by • l ead by example, introducing latest educating the public about the issues ing more energy efficient. Education could governments in developing countries. Several • utilize locally harvested renewable technologies available • engage in addressing the issue and be provided by the government through the champions stress that differences in local con- energy to power a company’s •m  ake innovations and carry out con- provide solutions - advocacy school system, or with help from media and ditions and levels of development need to be operations tinuous modernization by introduction NGOs. included in national policies. Champions also • share best practices on environmen- • develop low carbon energy schemes of modern technologies point to the importance of funding mecha- tal protection 4.2 Different approaches locally nisms to help developing countries adapt to • c omply with environmental legisla- • There is scope for better information, Respondents urge a differentiated approach climate change; recognition of differences; • apply energy efficiency technology - tion, standards and industry best better templates, case studies, and to climate change activities by companies in and inclusion of other priorities, such as in operations and end products practices educating companies about op- developing countries. Although champions development and poverty reduction. Indeed, • We strongly believe that business can • k eep to high environmental standards portunities in the developing world. agree that business can contribute to econom- signatories suggest the inclusion of all devel- deliver economic development whilst from home markets when possible There’s a need for understanding ic development while stabilizing or reducing oping countries in a post-Kyoto agreement reducing GHG emissions. Imple- the process, how long it takes, and greenhouse gases, some note this to be more depends on such differences being recognized •d  evelop comprehensive climate menting renewable technologies and legalities around it. The education difficult in developing countries—where and reflected. change strategies that are tailored developing new business centred on and resource flow around that could fewer incentives exist for companies. Some to emerging economies GHG reductions will provide em- be improved. That means showcasing champions observe that getting companies * The industrialized countries listed in Annex 1 to the United Nations ployment and other benefits, and • s trengthen environmental what has worked well, so that they in large emerging economies to commit to Framework Convention on Climate Change include the 24 original OECD members, the European Union, and 14 countries with econo- examples in the health sector are management [companies in the developing world] reductions requires differentiation: recog- mies in transition. (Croatia, Liechtenstein, Monaco, and Slovenia numerous • c reate an awareness of the issue in can learn from them and replicate nition that countries need to develop; and joined Annex 1 at COP-3, and the Czech Republic and Slovakia replaced Czechoslovakia.) them different targets and mechanisms, such as several champions as a global policy priority Raise awareness through technology transfer and the elimina- Raising awareness of climate change is anoth- tion of cost barriers to implementing climate- er important priority for companies operating friendly technologies. Ensuring that climate- in emerging economies, according to signato- friendly technologies are implemented may ries. Companies are advised to contribute to be particularly important for industries that raising awareness among the public, govern- play a critical role in development. One ment and other stakeholders, and to advocate champion suggests specific sectors that are for action on the issue. Furthermore, signa- large emitters of greenhouse gases should be tories urge companies operating in emerg- approached separately to ensure their buy-in. ing economies to share their climate change knowledge with local companies. Set targets and standards To help disseminate and replicate good Companies operating in emerging econo- practices concerned with renewable energy mies should also focus on developing good and energy efficiency, especially in emerg- management of their climate change strat- ing economies, champions emphasize the egy. Signatories advise that targets should be importance of educating businesses, as well set, and a system or strategy put in place to as consumers. First, businesses, especially in ensure the targets are met; this includes mea- emerging economies, need to be made aware suring and assessing emissions. Signatories of the opportunities that exist in the area of also recommend that companies apply global climate change, as well as the rules and pro- standards and industry-wide best practices in cesses involved in gaining access to incentives their climate change strategies. such as carbon credits. Businesses in emerg- When champions were asked specifically ing markets need case studies and examples, about incentives to develop climate strategies which can be provided by industry associa- for companies in non-Annex 1 countries*, tions and media. Expertise can also be shared they mention the tangible benefits of reduced through international platforms, such as the costs and the business opportunities afforded World Economic Forum, or through region- to companies that differentiate themselves on specific programs run by international com- climate change, especially in gaining share panies. Second, several champions, primarily with key customers in developing countries. in emerging economies, also emphasize the 24 25 Section B: Climate Policy Frameworks Suggestions for Making Caring for Climate Initiative More Effective (Unpromted, All Signatories) 5. Global Business Initiatives Provide guidelines/ 27% Signatories most often mention the UN Global Compact and Caring for Cli- information/advice mate as a global business initiative that helps companies achieve their cli- Benchmarking/targets/monitoring 24% mate change goals. Signatories also suggest the Caring for Climate initiative Provide case studies / best practice examples 20% could strengthen its advisory function, and its advocacy to influence govern- ments; and enhance its authority by introducing benchmarking and compli- Influence governments / advocacy 19% ance monitoring (an approach is favoured by almost one-quarter of signato- Facilitate interaction/ 18% sharing/partnerships ries). Signatories would also like to see the initiative communicate to reach 15% Communicate initiative more companies, and collaborate effectively with similar initiatives. Promote public awareness 10% Engage with other initiatives 8% 5.1 Helpful initiatives improvements in three main areas: advisory; Signatories to the UN Global Compact and advocacy; and authority. Provide project funding / partnering 5% Caring for Climate tend to mention this ini- 5% Take industry/sector approach tiative, when asked to name any global busi- Advisory ness initiative that helps companies achieve Signatories would like to see Caring for Provide incentives 3% their climate change goals. Four in ten re- Climate provide more advice (and informa- spondents name the Caring for Climate initia- tion) about how to develop climate solutions. tive. Other initiatives frequently mentioned, This, they suggest, could be done by develop- by one or two in ten respondents, include the ing guidelines, or by providing case studies World Business Council for Sustainable De- and examples of best practices that members Improving Caring for Climate (selected suggestions): velopment (WBCSD), UNEP Finance Initiative, could use to improve their own practices. the Carbon Disclosure Project, and the Global • provide an overview of clean energy technology and approaches to members Reporting Initiative. Several signatories also Advocacy • share examples of successful initiatives and the benefits of them mention UK Carbon Trust. Companies suggest that the Caring for Climate initiative should take a more active role in • make a climate change roadmap for the companies that support the initiative 5.2 Improving Caring influencing governments and advocating for • inform about good practices or activities carried out by different companies for Climate political action on climate change. Signatories When asked what would make the Caring for also call for the initiative to help raise public • lobby governments for increased commitment to reduce emissions Climate** initiative more effective, signatories awareness about the climate change issue. • promote climate change lobbying at national and international trade associations suggest the initiative should focus on making Authority • involve itself globally with key governments to push GHG reduction Signatories suggest that Caring for Climate • conduct public awareness campaigns should strengthen its authority by introduc- ing benchmarking and targets, and by moni- • clearly define goals and priorities for each member organization Global Business Initiative Helping Companies Achieve Climate Change Goals (Unpromted, All Signatories) toring member companies to ensure compli- • create a system of follow-up on implementation of the program by stakeholders ance. This approach is favoured by almost • follow up. It is too easy to be a member UN Global Compact / one-quarter of signatories. Caring for Climate 40% In addition, several respondents would like • develop a suitable monitoring mechanism for gauging the effectiveness World Business Council for to see the Caring for Climate initiative com- Sustainable Development (WBCSD) 16% • establish a strict policy to accept organizations, be aggressive about the issue municate to reach more companies. Many Clean Development Mechanism 11% also ask that the Caring for Climate initiative Selected comments: (CDM) /Kyoto Protocol should engage effectively with similar initia- • Spreading awareness of this initiative and information about its activities UNEP FI / UNEP initiatives 10% tives. Collaborating more with other initiatives would avoid duplication and help to make the • Work with other groups currently working on this - don’t reinvent the wheel Carbon Disclosure Project 10% initiative more effective. • connect bBetter connection with other global initiatives Global Reporting Initiative 10% **Caring for Climate is a voluntary global business initiative to mobilize the business community to develop solutions which reduce Carbon Trust 7% climate risk and create value for the company. 26 27 6. National Policy Signatories indicate the most helpful national government policy approaches include investing in technology, long-term climate planning, encouraging citizens to contribute, and promoting international policy. Fewer signatories find national policy approaches that put a cost on carbon to be helpful. Signatories also call for national government leadership in addressing climate change, and their active support for developing and implementing climate solutions. Some would like to see governments focus on regulation and compliance enforcement. Most signatories also stress the need for gov- ernments to develop education and awareness-raising activities to address climate change. Helpfulness of National Government Policies (Helpful*, All Signatories) 6.1 Helpful national government policies (rated) Investing in national 82% low-carbon technologies Investing in technology √ Supporting transfer of low-carbon 79% When asked to rate the helpfulness of a range technologies to/from other countries of national policy approaches in terms of as- Planning for economic growth with 77% sisting companies in achieving their climate reduced emissions change objectives, signatories agree that Providing incentives for consumers to 72% technology is a key policy area. Eight in ten purchase climate friendly products Committing to public procurement of respondents say that governments investing climate friendly products/services 69% in national low-carbon technologies, [for ex- Championing international policy ample procurement of existing technologies, framework to reduce GHG emissions 69% or funding for research and development of Setting national climate objectives to new technologies], would help companies mobilize public support 67% and one-third of respondents would find this Developing national plan for policy approach ‘extremely helpful.’ Eight in adaptation to climate change 67% ten signatories also believe that governments Enforcing national regulatory supporting the transfer of low-carbon tech- framework to reduce GHG emissions 65% nologies to or from other countries would Establishing mandatory cap and trade scheme 47% be helpful, with one-quarter of respondents rating such a policy as ‘extremely helpful.’ Establishing voluntary national 42% tcarbon trading scheme However, signatories with their most signifi- cant climate activity in developed nations Introducing national carbon tax 41% find it more helpful to transfer low-carbon technologies between countries than do their peers in developing nations. Some champions emphasize the role of * 7 to 10 on a scale from 1 to 10, where 1 means “not at all helpful,” and 10 means “extremely helpful. public-private partnerships, as governments may be able to fund risky or long-term inno- vative projects, or cutting-edge research, that would otherwise be unviable from a business perspective. Other champions point to tax incentives as a way to encourage initiatives, through preferential treatment or deductions for innovative companies, or as an incentive for consumers who find the current pay-back on energy-efficient products too long-term. 28 29 “Champions emphasize Long-term planning Signatories also agree that governments tak- ing a long-term approach to climate change would help companies. Three-quarters of re- International policy Signatories are also supportive of govern- ments promoting an international policy framework to reduce GHG emissions and the importance of spondents believe that governments planning enforcing national regulatory frameworks; for economic growth with reduced emissions around two-thirds of respondents find these would help companies achieve their climate approaches helpful and around one-quarter change objectives, and around seven in ten believe it would be ‘very helpful.’ Here, signa- placing the climate call for governments to commit to public tories with their main climate activity in de- procurement of climate friendly products veloped nations tend to find it more helpful and services. Part of a long-term approach, to champion such international frameworks. respondents also believe it would be helpful Costing Carbon change strategy at if governments set national climate objec- tives to mobilize public support; however, Fewer signatories find national policy ap- signatories with their main climate activity proaches that put a cost on carbon to be in developed nations tend to find this policy helpful; only around four in ten respondents more helpful than do their peers in develop- believe that introducing a national carbon the very strategic ing nations. tax or that mandatory or voluntary trading Some champions also emphasize the need schemes would assist companies in reducing for gradual change through medium to long- emissions. term planning. Particularly in developing However, several champions call for the core of the company, countries, time is needed to change mindsets introduction of a cost on carbon in order to and business models to become more sustain- let the market steer reductions to where they able, and measures may need to be taken by can be made most cheaply. They also note the governments to counter negative effects on importance of governments ensuring pre- and making sure it employment or increased poverty. dictability and maturity of any future global carbon market. Encouraging citizens More broadly, in terms of most effective Governments can also encourage the public national government policy approaches, to contribute to the climate agenda by provid- champions point to the need for govern- is integrated into ing incentives for consumers to purchase ments to strike the right balance between a climate friendly products, something that market-based cap and trade approach and a seven in ten signatories say they would help government-imposed tax on carbon. While a companies achieve their climate change few champions prefer a purely market-based regular business objectives. One-quarter of signatories would approach (noting that a tax may lead to distor- find this policy ‘extremely helpful.’ tions), most recognize the need to complement Champions also suggest governments a cap and trade system with a carbon tax to en- could provide the necessary information, sure that companies will act on the issue. Most educating consumers about simple steps that champions also agree the approach needs to be operations rather than we all can take together to make a difference; mandatory rather than voluntary; a voluntary they could also provide companies with tool- approach is no longer thought to be credible as kits and standard methods on how to create it has not been effective in the past. However, a greenhouse gas inventory, etc., to facilitate one champion warns that a too prescriptive delegated to a separate the integration of a global carbon market approach by government will most likely lead in the future. Governments may also offer to distortions. audits to companies that do not have the capacity to map their emissions internally. In Enforcement department.” order to facilitate the sharing of information Interestingly, signatories with climate activi- between companies, governments could also ties based in developed nations tend more take on the task of convening companies to to support enforceable national government discuss and share best practices. policies, including mandatory cap-and-trade schemes and national regulatory frameworks. Respondents with initiatives in developing countries tend to prefer voluntary schemes. 30 31 Suggested Government Actions to Address Climate Change incentives to stimulate corporate initiatives (Unpromted, All Signatories) and consumer demand for climate friendly Helpful government policies (selected comments): products. They should also support imple- • show leadership - practice what it preaches in all areas mentation by investing in renewable energy Educate / raise awareness 19% and public transportation, and by ensuring • be more courageous in addressing public transportation and heating issues that GHG reductions are incorporated into all • introduce strict medium and longer term emission reduction targets Support research/innovation 18% government decisions. • participate in, and drive, international binding agreements on climate change Incentives / facilitate investments 14% Regulating and enforcing • support innovation and investment in low carbon technologies and products Enforce regulation / 12% Some signatories would like to see govern- compulsory measures ments focus on regulatory frameworks to ad- • fund and support innovative solutions that address climate change issues Formulate targets/strategy 10% dress climate change, and on enforcing com- • give a mega boost to research and education to investigate new technologies pliance. A number of signatories also urge Show leadership/commitment 10% • create a pro-investments milieu (i.e. regulatory framework, bureaucratic simplification) governments to put a cost on carbon either by taxation or by creating a trading scheme, and • offer tax incentives for investments in more eco-efficient technologies Tax/cost on carbon 7% to eliminate subsidies that sustain the current • offer incentives to stimulate technological development Incorporate GHG reductions 5% energy regime. in all decisions Regulations, such as new building codes • increase the quota of renewable energy in the portfolio Promote/apply international 5% or requirements for energy labelling, are also agreements • provide a better mass transit infrastructure called for by several champions; although, Engage with other countries 4% they state, these regulations should come • incorporate carbon emissions in purchasing policies with incentives rather than just restrictions. • impose high fines on factories that produce high carbon emissions Renewable energy initiatives 4% Engage with companies Educating and raising awareness • make an Energy Audit compulsory for high-energy intensive industries 3% Signatories urge governments to address cli- • strengthen the implementation of current environmental regulations Invest in public transport 3% mate change through education and aware- ness-raising. This may be especially important • tax goods from countries that do not make commitments to reduce GHG Emissions trading 2% in countries where awareness about climate • eliminate subsidies, and establish market prices for energy products change is low, and where companies struggle • address climate change in kindergarten and schools to achieve their climate objectives amid a lack of understanding from customers and • implement different measures to educate consumers and change consumption habits 6.2 Helpful national govern- suppliers. ment policies (unprompted) • increase people’s knowledge on climate change issues When asked to suggest other actions that Local context*** • Overall, governments should support long-term research into new [climate] solutions, national governments should take to help Government policy approaches should also to make them more cost effective. There are lots of ideas on doing things differently, but address climate change, signatories bring be adjusted to the local context, according to they don’t compete well with old technologies that are now cheap forward proposals in a number of different champions. Several mention the need to take • Within the country we need leadership. We need to create right framework conditions, areas: into account local conditions, such as levels through public policy. We need market intervention - countries need to operate a carbon of development. One champion notes that tax or some kind of carbon trading system. We need to put a price on carbon. Without that, Providing leadership in countries like India policy goals should the market won’t operate properly Signatories call for governments to engage in first focus on intensity rather than reduction, addressing climate change, and to lead the to allow further economic growth. Another • Climate change is a complex issue and the “policy mix” required to enact change may way by setting clear national targets and strat- champion observes that targets need to be rel- vary greatly from situation to situation. Depending on the immediate challenge at hand, egies for reduced emissions. Governments ative rather than absolute, again to account and the local context, any of the above efforts may be of great use in helping us create a should also show leadership on climate for differences between countries. low-carbon economy change through their international engage- When asked if they believe business can • We strongly believe that business can deliver economic development whilst reducing ment, support for international frameworks, contribute to economic development while GHG emissions. Implementing renewable technologies and developing new business and cooperation and assistance with other stabilizing or reducing greenhouse gases, centred on GHG reductions will provide employment and other benefits, and examples in countries to address climate change. champions agree this is possible – although the health sector are numerous some note that it is more difficult in develop- Supporting solutions ing countries where incentives are lacking for Signatories recommend that governments many companies. actively support the development and imple- *** This section comes from the Champions. It is presented here for mentation of climate solutions. They should additional information support the development of solutions, by funding research and by providing financial 32 33 7. International Policy requires compromises. Signatories call on governments to secure consensus, which will Recommendations to • don’t leave until enforced targets Signatories recommend that governments meeting to finalize the post-Kyoto require their flexibility and vision beyond na- governments are agreed agreement in December 2009 should ensure universal participation by devel- tional agendas. They also urge governments to (selected comments) • view this as a deadline for oped and developing nations, as well as the United States. The governments show commitment to fighting climate change, • There is a need to understand long-term global GHG reduction should provide visionary leadership by actively ensuring they reach an agree- by acting quickly and substantially to imple- poverty in the developing world action plan ment, and setting GHG reduction targets even if compromise is required. ment the agreement. first hand While some champions recommend that • ambition - make a agreement that They should also establish workable mechanisms to help nations meet tar- the process run faster because there is no • marry development and growth is strong and ambitious enough gets, along with incentives for business. time to lose on climate change, one cham- with climate change mitigation • prepare for debate and compro- Similarly, signatories believe the most important outcomes from a post- pion warns that governments must also allow • start with common but differenti- mise to gain common ground themselves enough time to find the right solu- ated responsibility Kyoto agreement will be participation by all major GHG emitters, and fi- • harness the power of global tions the first time round. One champion also nancial mechanisms that support reductions in developing countries. Other calls for leadership from the United States on •try to engage all the major GHG markets, and purchasing power, important outcomes will be broad consensus on emission targets, a cap-and- climate change. emitters in the new targets to drive businesses trade system that includes developed and developing countries, and an agree- • Developing countries should play • support market mechanisms Establish workable mechanisms a proactive role to join post-Kyoto that will help drive the best/most ment to mobilize business by sector. Signatories recommend that governments agreement economical solution agree on workable mechanisms to help • It is compulsory that the USA • provide incentives to the indus- states meet their targets, with incentives for should sign the Kyoto agreement tries for adoption of low-carbon business to move in the right direction. Re- 7.1 Recommendations to govern- technologies Recommendations to Governments Finalizing a Post-Kyoto Agreement spondents suggest governments agree on an (Unpromted, All Signatories) ments finalizing a post-Kyoto emissions trading scheme, or other market- agreement oriented mechanisms. A few respondents When asked what recommendations signa- suggest these mechanisms ought to work Reach agreement / set targets 14% tories would make to the governments that at a sector or industry-specific level. Other according to signatories. Half of respondents Market mechanisms / meet at the UN Climate Change Conference in signatories would like the Kyoto mechanisms, view the creation of such mechanisms to be a 12% emissions trading December 2009 in Copenhagen to finalize a in particular the Clean Development Mecha- ‘very important’ outcome from a post-Kyoto Support / different targets 11% post-Kyoto agreement, respondents offer sug- nism, to be improved or extended. agreement. Four in ten also believe differ- for developing countries gestions in three main areas: Champions in particular recommend ent targets for developed and developing Act quickly / take real action 10% workable financial mechanisms that will countries to be a ‘very important’ outcome Ensure universal participation actually achieve reductions, as well as fund- of an agreement. Around one-quarter, each, Include all countries 10% Signatories call for an agreement to include ing mechanisms to help developing countries think both outcomes are ‘absolutely critical.’ US must participate 8% all countries, with mechanisms that support adapt to climate change. However, fewer signatories support per capita reductions in developing countries. Respon- targets for emissions – an outcome favoured Show leadership/commitment 8% dents note that the inclusion of all countries 7.2 Important outcomes from by those who believe developing countries will require differences between developed post-Kyoto agreement should be able to increase absolute emissions, Enforce compliance to agreement 6% and developing nations to be recognized and as long as per capita emissions are restricted. reflected in an agreement. India and China, in Participation by emitters Provide incentives 5% particular, should be secured to participate in When asked to rate a selection of possible Consensus on targets Improve/extend CDM system / Kyoto mechanisms 5% the initiative. Signatories also stress the neces- outcomes from a post-Kyoto agreement, signa- Signatories also prioritize broad consensus on sity for the United States to participate in a tories stressed the importance of participation emission targets, and call for legally binding Sectoral/industry approach 5% post-Kyoto agreement. by all major GHG emitting countries and the targets for all nations; both outcomes are Similarly, champions recommend that United States in particular. More than half the thought to be ‘very important’ by just under Share/discuss 4% governments agree on reachable targets for respondents say it is ‘absolutely critical’ that half of respondents. Half of respondents also Compromise / look beyond 4% reductions, ensuring broad agreement among all GHG emitting countries are included, and believe that commitment to a 50 percent national agenda all major economies. Several champions note that the United States takes up a leadership decrease in emissions by 2050 (compared to Convince India and 3% China to participate that differences between countries need to role. Seven in ten believe these outcomes to 1990 levels) is ‘very important’; one-third be recognized, and that developing country be ‘very important’ (9 and 10 on a scale where of respondents believe commitment to this Suggested specific targets (various) 3% agendas must include other priorities, such as 1 is ‘not at all important’ and 10 is ‘absolutely target is ‘absolutely critical.’ development and poverty reduction. critical’). Make agreement business friendly 2% Cap and trade Provide visionary leadership Financial mechanisms A cap-and-trade system, that includes both Signatories urge governments to actively The inclusion of all countries in the climate developed and developing countries, is con- ensure that they reach an agreement and agenda requires financial mechanisms that sidered a ‘very important’ outcome from a set GHG reduction targets, even when that support reductions in developing countries, post-Kyoto agreement by three in ten signa- 34 35 “Governments Importance of Possible Outcomes from Post-Kyoto Agreement tories, although only one in ten believes this (Very Important,* All Signatories) outcome is ‘absolutely critical.’ However, fewer signatories support a cap-and-trade Inclusion of all major 73% system for developed countries only. Three in GHG emitting countries ten respondents also support the creation of should provide United States joins leadership in 71% a global taxation system for carbon emissions reducing emissions in saying this outcome is ‘very important’. Financial mechanisms to support 52% Notably, signatories with their main cli- reductions in developing countries mate activities located in developing nations Commitment to 50% decrease in 51% visionary emissions by 2050 are more likely to support a global taxation Legally binding targets system for carbon emissions, global per capita for all nations 48% targets, and a cap-and-trade scheme for devel- Broad consensus on oped countries only. emission targets 47% Business mobilized leadership by Different targets for developed and developing countries 41% More than one-third of signatories also Agreement to mobilize believe that an agreement to mobilize busi- business by sector 37% ness by sector would be a ‘very important’ Global taxation system outcome of a post-Kyoto agreement. Signa- 32% for carbon emissions actively ensuring tories with their main climate activities in Cap-and-trade system for both developed and developing countries 30% developing nations are more likely to call for an agreement mobilizing industry by sector. Per capita targets for emissions 21% Cap-and-trade system they reach an for developed countries only 14% * 9 to 10 on a scale from 1 to 10, where 1 means “not at all important,” and 10 means “absolutely critical. agreement,and setting GHG reduction targets even if compromise is required.” 36 37 Appendix 1: Climate Champions interviewed Company Country Sector ARAMEX PJSC Jordan Transportation & Storage Areva France Utilities Asia Pacific Resources International Singapore Paper & Forestry Product Limited Bayer AG Germany Chemicals Technology Hardware & Broad Air Conditioning China Electrical Equipment China Mobile Communications Corporation China Telecommunications CPFL Energia SA Brazil Utilities DONG Energy a/s Denmark Utilities United States of DuPont Chemicals America ESKOM South Africa Utilities Technology Hardware & Fuji Xerox Company Ltd. Japan Electrical Equipment Technology Hardware & Koninklijke Philips Electronics N.V. Netherlands Electrical Equipment Sasol Ltd. South Africa Chemicals Statoil ASA Norway Oil & Gas Tata Steel India Metals & Mining United States of The Dow Chemical Company Chemicals America Russian United Company RUSAL Metals & Mining Federation Veolia Environnement France Environmental Services Westpac Banking Corporation Australia Finance & Insurance 38 39 Appendix 2: Climate Success Stories intensity of our company by 22 percent by 2005,” Wells comments. “I was amazed to see were undertaken. DuPont’s Dawn Rittenhouse told GlobeS- how easy it really it was for us to obtain - and can that driving growth and reducing costs When asked to speak about initiatives by their companies that they considered most successful how much opportunity was out there and was a balancing act. The site’s success was toward reducing greenhouse gases, champions offered the following stories. All are willing to how easy it was to rally the troops to get it partly due to the leadership of the plant man- share them with other companies, and for their company’s name to be associated with their done.” ager, who insisted that reducing energy and story in the UN Global Compact’s report, although one requested a chance to review the entry In 2005, Dow set its new 2015 Sustain- meeting emission goals were keys to progress. before publication. The following stories include global, national, and local efforts; they are ability Goals: a public commitment to save 25 DuPont, a company that claims to “put sci- presented by sector: chemical, energy, and other. percent in energy intensity and 25 percent in ence to work by creating sustainable solutions greenhouse gas emission intensity in the same essential to a better, safer, healthier life for Chemical Bayer’s Manfred Marsmann told GlobeS- timeframe. As a complementary policy, Dow people everywhere,” aims to source 10% of all can that “we asked ourselves if we should is putting a cost on CO2 emissions and is now its energy from renewables. Bayer acts to innovate do more, and in a more stringent way… the asking businesses to cost in the price of CO2 “If you reduce emissions through reduced Bayer AG, the German-based global enterprise, result is we want to do more than just broad when doing analyses of new projects. This energy use, there’s probably an economic is looking for unique and innovative ways to best practices: we completely adjusted our purely economic evaluation is done in antici- benefit, and especially in a country imple- address climate change through its new Bayer architecture.” Marsmann told GlobeScan that pation of a real cost of CO2, that will make menting Kyoto,” Rittenhouse observed. “Now Climate Program. The program is scheduled to Bayer AG is looking for best practices that are reduced emissions an economical decision as there’s starting to be an international cost run for several years and brings together the specific and unique, “more than the usual ex- well as a commitment to sustainability. to carbon, so it is good to stay ahead of the wide-ranging areas of expertise of Bayer AG’s amples, initiatives that make the company a trend. Not least, it is increasingly important to subgroups and service companies, which spe- forerunner and a leader in addressing climate DuPont site slashes consumption reputation and customers.” Incentives are not cialize in health care, nutrition and high-tech change.” DuPont, the US-based chemical company, re- dissimilar for companies operating in emerg- materials, duced emissions at one of its largest plants by ing economies, suggested Rittenhouse. “If you Launched in 2007, the program has Dow cuts intensity by 20 percent cutting energy consumption during a six-year are exporting to another country, especially already initiated several “lighthouse” proj- Dow, the US-based chemical company, suc- program. The company’s Sabine River Works to the European Union, reducing emissions ects that provide examples of tackling the cessfully reduced the energy intensity of its site in Texas slashed its energy consumption allows you to work with leading retailers and consequences of climate change and sup- processes by more than 20 percent after set- by 20 percent in 2006 compared with 2000 electronics companies, and offers a way to porting climate protection. In developing the ting this as a goal in 1995. Even though Dow levels, saving enough natural gas to heat gain share with key customers.” Bayer Climate Program, the company also did not set a goal to reduce greenhouse gases, some 257,000 American homes for one year. developed a new climate policy and set new the company’s GHG emissions, on an absolute Using less energy, the site produced lower- reduction goals. basis, also went down by 20 percent in the cost products and became a more financially Energy New and unique approaches to protecting same timeframe - in large part because of the secure local employer. the climate and dealing with climate change energy intensity improvement effort. Meanwhile, the site’s reduced energy con- Areva has permanent reductions plan include the Bayer Climate Check, a new When the goal to reduce energy intensity sumption also brought reduced greenhouse Areva, the French energy company, has a per- control instrument for energy-efficient and was set in 1995, it was a public commitment gas emissions equivalent to 276,000 mid- manent plan in place to reduce emissions and climate-friendly production. This comprehen- to sustainability. At that time, energy costs sized cars being taken off the road, according compensates remaining emissions through sive tool enables the company to systematical- were lower and the rationale for increasing to DuPont. The site reduced its greenhouse the use of carbon credits. ly evaluate its production plants throughout energy efficiency was not to save money. The gas emissions by 1507 million tons per year, The company’s policy is to reduce its GHG the world, as well as its capital investment commitment originated from the very top of totaling 25,000 BTUs over the period. And emissions as much as reasonably possible, and technology projects in terms of their cli- the company and was presented in a public the reduced consumption also led to savings and it has a target of reducing its energy mate relevance. The tool also analyzes what press conference in New York. The commit- of $101 million. By 2007, the sites reduced consumption by a few percent each year to effect the raw materials used by Bayer have ment included a collection of goals set around energy costs saved $33 million per year, and reduce the corresponding CO2 emissions. Are- on GHG emissions, whether the chosen form uses of raw materials, uses of energy, environ- by 2008, savings increased further as energy va’s main target is to reduce its SF6 (Sulfur of energy really is the best, and how CO2- mental performance, and safety performance. prices increased. Hexafluoride, a highly potent GHG) emissions, intensive the logistics are. Dow’s Rich Wells told GlobeScan that The Sabine River Works initiative began in and the direct emissions of SF6 during the Another lighthouse project is the first when setting the goal to reduce energy inten- 2000, when the site renewed its commitment manufacturing of SF6 loaded T&D equipment “EcoCommercial Building,” a concept for sity, the company did not know how it was to reduce energy costs, sparking decentral- have already been reduced by 15 percent. The zero-emission industrial and office buildings going to be achieved. Dow recommends busi- ized programs that were easily identifiable company is also conducting studies in order that is suitable for all the Earth’s climate nesses set aspirational goals and then use the and inexpensive to implement. When the to limit the N2O (Nitrous Oxide, a major GHG) zones. Between now and 2010 Bayer will be power of the organization to work on them. easy energy reductions were in place, site and emissions of some of its facilities. In addition, investing one billion euros in these and other To reach the goal, the company identified area leaders established a centralized program Areva has introduced a systematic analysis of climate protection projects. The company opportunities for reductions and invented that used Six Sigma to implement non-capital the GHG emissions consequences (positive or also contributes to the discussion of how to management systems that put the operating projects for saving energy. DuPont consultants negative) in its investment review process. avoid the conflict between food and biofuel, discipline in place. conducted an energy assessment to identify Areva’s plan began with strong commit- by looking for a plant that is rich in fuel and “We got a bit more intelligent, we lever- new opportunities, and the U.S Department ment from the chairperson to become carbon can be planted in dry areas but that cannot be aged, and low and behold when it was all said of Energy (DOE) carried out an independent neutral. The first step toward this goal was to used for food. and done we were able to lower our energy assessment. A total of more than 55 projects reduce the company’s own emissions, a chal- 40 41 lenge for a company that is growing quickly energy per km inundated; in 2006, the suc- DONG Energy decided it was willing to take While the company is investing tens and last year recruited over 10,000 new em- cessful implementation of the first part of the some risks and expand its focus away from of billions of rand in building new power ployees. In order to contain its emissions year repowerment initiative qualified the company coal. DONG Energy’s Villy Dyhr notes that generation, it is including the long term into after year as the company’s activities increase, to obtain credits through the Clean Develop- “it was government support that started this, decision making and is factoring CO2 into the Areva has developed a plan and dedicated a ment Mechanism. combined with public participation.” price. Eskom’s Dr. Lennon observes that it is team to the challenging task of implement- CPFL Energia’s CEO has driven the sus- One challenge to the generation of wind difficult to make a business case for Eskom to ing it throughout the 43 countries where the tainability agenda though a very advanced power is exporting exess production to other reduce emissions, but factoring in the value company operates. attitude to business and sustainability, stating locations, as it requires cables through which of CO2 helps level the playing field. The com- The company voluntarily compensates for that “today sustainability is a choice and soon local markets can connect to become one big pany now uses multi-criteria decision-making its remaining emissions through the purchase it will be market survival.” market. Today, the markets are not efficiently in investment and does not only look at cost; of carbon credits. In doing so, the company CPFL Energia’s Henrique Lian told Glob- connected, and having more cables is an im- instead a lifecycle approach looks at the cost gives priority to projects that facilitate devel- eScan that the company also has opened portant requirement for expanding the wind risk and includes externalities of environmen- opment in emerging countries, such as Niger a cultural centre where issues like climate energy sector. tal and societal costs. and India. Areva only acquires credits from change can be discussed. The initiative has Achieving the ability to store wind energy Public perceptions are a major constraint projects in emerging economies that third brought scientists, such as Prof. Carlos Nobre would also be a significant next step. One to achieving reductions, according to Dr. Len- parties deem responsible and sustainable, and of the IPCC, to talk to the company and obvious opportunity would be to develop non. “It is difficult to get decision makers to that are considered relevant. to the community and has provided series plug-in hybrid cars that could be charged dur- approve investment in technology that may Areva’s Laurent Corbier admits that there where journalists talk to common citizens ing the night and drive on a mixture of pet- be unproven or seen as unreliable,” and there can be tensions between business and climate about what they can do in their house and rol, bioethanol, and electric power. Another is a need for partners who are willing to take responsibilities and notes the importance of neighbourhood to help minimize the effect of would be to convert the energy to district this technology risk. executives at corporate level discussing imple- climate change. heating. Villy Dyhr told GlobeScan that in mentation with those at the operational level. response to this challenge, the company has Sasol converts from coal to natural gas He notes that there is a need for knowledge DONG develops renewables launched a partnership where they will try Based in South Africa, Sasol, the energy com- and awareness at every level, as decisions DONG Energy, a large energy company based to develop the logistics for a grid for electric pany, has implemented a major conversion are not all obvious and may meet resistance in Denmark, is addressing the climate chal- vehicles. from coal to natural gas project. The Mozam- on the operational side when involving, for lenge by investing in renewable energy, such bique Natural Gas Project brings natural gas example, costly changes of equipment (as was as water, wind, sun, biomass, and geother- Eskom focuses on efficiency from Mozambique into the company’s Sasol- the case when changing the process at Areva’s mal energy. Today, DONG Energy is one of Eskom, the South African public electric- burg plant in South Africa, and has saved 6 N2O gas plant). Europe’s leading wind power generators, with ity utility, is implementing a multifaceted million tons of CO2. “We make sure in the review of one more than 16 years of experience in building response to climate change. It includes short- The Mozambique Natural Gas Project investment, that several alternatives are and running offshore wind farms. to medium-term initiatives focused on energy initiative started in 2001, when Sasol decided presented and viable” he comments, although DONG Energy recognizes that as an energy efficiency, as well as a diversification of the to start looking at alternatives to the “busi- “some things are not negotiable” and some re- company involved in power and heat gen- energy mix in the medium- to long-term, ness as usual” situation of burning coal as ductions have to be made with support from eration from coal and other fossil fuels the which will result in significant cuts in emis- feedstock for facilities. Instead, the company the leadership. Corbier observes that it is company is a co-owner of the CO2 problem sions. Measures to reduce emissions through decided to bring in natural gas from Mozam- preferable not to reach that stage, as “discus- and should therefore naturally be part of the demand-side management have achieved CO2 bique. The difficulty was that at that time sion helps to find the best alternative and get solution. Noting that renewable energy is key emissions savings of 289kt (2006: 271kt). there was no real business case, as natural gas ownership.” to reducing CO2 emissions, DONG Energy An increase in the nuclear component, was more expensive than coal. The company therefore works to expand energy supplies together with more extensive deployment of also needed pipeline infrastructure, as well as CPFL modernizes hydro plants based on renewable energy sources. renewable energy resources, forms the basis cooperation from Mozambique’s government CPFL Energia, the electric energy company An early player in the wind energy market, for long-term cuts in Eskom’s greenhouse to allow Sasol to explore for gas and to bring based in Brazil, introduced a program to DONG Energy has developed strong wind gas emissions. Eskom intends to significantly it to the plant. “repower” its small plants. The restoration or energy capabilities. The company has helped increase the nuclear component of the energy Sasol’s Fred Goede told GlobeScan that installation of new turbines, peripheral equip- establish half of the world’s ten largest off- mix to about 25 percent in 2025. The com- since there was no business case for the ment, and automated systems in its small shore wind farms; today, DONG Energy has pany will also accelerate the deployment of initiative, the project had to be justified to the plants will result in the reduction of 921,000 around 500 MW of wind capacity and more renewable energy technologies, investing in Board by the prospect of carbon credits. “We tons of CO2 from 2003 to 2023. than 1,000 MW in the pipeline, especially in wind, solar, and thermal power. knew from Kyoto that there would be carbon Starting in 2003, CPFL Energia has now Britain, Germany, and Poland. In Denmark, Eskom is also planning to progressively credits in the future and that we might repowered 30 of its small plants through the DONG Energy’s “home” market, the propor- harness cleaner coal technologies, such as qualify.” launch of its Repowerment of Small Hydro- tion of wind energy is among the greatest of clean coal, capture and storage, and efficient Despite significant reductions in emissions, electric Plants Program. In 2006, the first any country in the world. mining. The company recognizes that South the company still has not received credits part of the program was finished, and the In Denmark, the development of wind Africa will continue to depend on coal in the through the Clean Development Mechanism. plants now generate an average of 12 kW energy production capabilities has received foreseeable future, as coal makes up most The methodology needed to qualify has taken of energy per km inundated instead of 0.7 good government support and widespread of the existing energy mix and offers the years to develop, and the company is still kW of energy per km inundated. In order to public support in the 1980s and 90s, despite country an inexpensive and abundant source working on it. sell carbon credits, Kyoto calls for 10 kW of not being a good business case. At that time, of energy. “Luckily for us the price of natural gas 42 43 makes the project today more of a business Others For every kW output, it releases 0.15 kg of ment through standardizing requirements for case,” Goede comments. Despite the stum- CO2, while electrical A/C releases 0.68 kg of auxiliary parts and for the structures within bling blocks, today the pipeline is in and the Aramex transporters adapt fleet CO2 - four times as much. the base stations. China Mobile is encouraging natural gas is in the system. The project has Aramex, a global transportation and logistics Known as an absorption chiller, the unit its suppliers to reduce the amount of energy now been achieving massive emission reduc- services company headquartered in Dubai, is works through “non-electric refrigeration,” used for each carrier frequency by designing tions for three years. in the process of working with leasing compa- in which a liquid is heated, boiled and then products that reduce materials used, require nies to change its fleet to hybrids. In its 2006 cooled so the vapours condense and cool their less energy, and can be manufactured more StatoilHydro catches and stores Sustainability Report, the first sustainability surroundings. The unit can be fueled by local simply. emissions report issued in the region, the company set energy sources such as natural gas, avoiding China Mobile has implemented techni- StatoilHydro, the Norwegian energy company, the goal to become the first carbon neutral increasing peak loads on the electricity grid. cal innovations in its network equipment has stored roughly ten million tons of CO2 global logistics and transportation company Zhang Yue, the CEO of Broad Air Condition- to reduce energy use, and has conducted from natural gas production in the Sleipner in the world. Introducing hybrids to all fleets ing, notes that many provinces in the most environmental and energy assessments for field off-shore in an aquifer more than 800 is seen as a milestone to reach this objective. populous parts of China experience large- its wireless equipment, switches, transmit- metres below the seabed. This pioneering car- It is the CEO of the company that is driving scale blackouts, so non-electrical air condi- ters, and small-scale servers. For auxiliary bon capture and storage (CCS) project contin- the decision to convert the fleet. The decision tioning can provide stability in addition to components, the company has implemented ues to capture one million tons of CO2 a year. is motivated by the fact that hybrids use half decreasing CO2. integrated systems management for its equip- The Sleipner initiative started in 1990 as of the fuel required by conventional cars, BROAD’s non-electric air conditioners were ment rooms, power system improvements part of normal planning for this off-shore significantly reducing emissions. Using less invented in 1992 and have achieved very high that shut off power automatically when not natural gas installation, when tests showed fuel also makes economic sense, as costs are energy efficiency through many upgrades. in use, lighting system improvements, energy that the natural gas in the reservoir contained also cut by 50 percent. Aramex’s Raji Hat- The units are sold in over 60 countries and saving improvements to air conditioning, too much CO2. Soon after, the Norwegian tar observes that “any initiative you take is can be found in many tall buildings and some and other energy saving methods. In addi- government introduced a CO2 tax and the usually associated with cost; a hybrid is more the biggest airports in Europe and Asia. tion, China Mobile has reduced energy use by project became commercial. Despite the risk expensive to buy but in long term, running Nevertheless, Mr. Zhang observes that he using IP technologies to communicate data of introducing a new technology, the project cost will go down. In all initiatives there is is “far from content with the product penetra- electronically, reducing the materials used in was always economically viable and costs cost investment, but in [the] long run cost tion, for most of the owners and building and network equipment and reducing the weight have been mainly associated with funding for benefits.” facility engineers are still not aware of non- of network equipment. research. Changing the fleet to hybrids is a difficult electric air conditioning. They are accustomed “In 2007, we focused our efforts on our StatoilHydro’s Trude Sundset explained process; Aramex does not own its vehicles, to selecting electric chillers for over one most energy-intensive base stations. We that the decision to develop the technology so the company has to work with leasing hundred years. The promotion of non-electric developed, patented, and implemented for carbon capture and storage was “a choice companies to reach this objective. Because the chillers is still quite difficult, except for those cutting-edge energy-saving technology and we made, a wish to do something for the envi- price of oil is low in the gulf region, savings customers who are able to see further down created a new standard policy, ‘China Mobile ronment.” This was a decision that “engaged on fuel is a less motivating factor, especially the road.” Base Station Energy Conservation Technical people in the company; we realized how as hybrids are still very expensive. Availability In recent years, the annual sales of BROAD Protocols,’ which has been integrated into our important it would be, that we influenced the of hybrid vehicles is also limited, because it is non-electric air conditioning have contributed centralized purchasing and bidding system. world in showing it is possible.” difficult to convince car dealers that hybrids to reduced CO2 emissions equivalent to 160 In addition, we are currently using 1,109 sets The initiative required the use of new will sell (or work), and most hybrids are million trees planted. “That is to say, 80,000 of ‘Intelligent Base Station Heat Exchange technology, and there were challenges to distributed in the US or Europe. Hattar notes trees for every BROAD employee every year, Systems’ and have implemented 2,523 ‘Intel- adjust the design for an off-shore platform. that in one instance, it took six months to get which really makes us proud,” notes Mr. ligent Ventilation Energy Saving Systems,’” In response to this challenge, StatoilHydro four hybrid cars delivered from Toyota. Zhang. notes China Mobile’s CEO. “Based on initial started a research program and was able to In addition to introducing hybrids, the calculations, these systems have helped us apply in-house knowledge to the project. “The company is also transitioning some of its China Mobile improves reduce energy by 7 million kWh.” company learnt a lot about CO2,” Sundset fleet to run on natural gas, which is cheaper network efficiency observes. than gasoline and produces fewer emissions. China Mobile, a telecommunications com- Fuji Xerox makes production The reservoir is continuously monitored, Now half of Aramex’s fleet in Egypt runs on pany, works continuously to increase network and recycling more efficient with the participation of several national and natural gas. The company is also achieving re- efficiency as a key way to reduce their climate Fuji Xerox, the office products company based international research organizations. Data duced emissions through route optimization, impact. Increasing network efficiency is a part in Japan, is developing products that are ener- and knowledge gained from the initiative by sending one vehicle instead of two, and of the company’s Green Action Plan, which gy efficient and recyclable. Between 1997 and have been shared in a number of articles, and delivery timing optimization. In Dubai, the aims to increase energy efficiency (per unit of 2007, the company reduced the energy usage have enabled StatoilHydro to propose guide- company also uses waterways for transport. telecommunications traffic) by 40 percent by of its machines by half, while also achieving lines for a legal framework for how carbon 2010 compared to 2005 levels and prevent the a 50 percent reduction in cost. After several storage should be monitored. BROAD Air Conditioning develops emission of over 6.8 million tons of CO2. years of innovation and persistence, the com- non-electric ‘chillers’ Network equipment is the most energy pany also managed to make the recycling of Broad Air Conditioning, a company based in intensive component of China Mobile’s its products profitable. China, sells air conditioning units that pro- business and the company’s largest source Despite an increase in the number of Fuji duce less CO2 emissions than conventional of carbon emissions. The company plans to Xerox machines (the population of machines units and are two times as energy efficient. reduce energy use of their network equip- has increased 1.5 times) the company has re- 44 45 duced energy by 17 percent. The company has Philips Electronics replaces lighting capacities over the next three years. steel between 2003 and 2004. Initiatives of designed new energy saving technologies that Royal Philips Electronics, a producer of ener- The company is developing and imple- the campaign included modernization of allow the fusing of toner onto paper at lower gy-efficient lighting based in the Netherlands, menting several energy-efficient reduction plant and machinery, use of fuel substitutes, temperatures, and has reduced the size and is working actively for legislation that will technologies at its production sites, and will recovery and re-use of by-products, as well as weight of machines to reduce the quantity of cause the incandescent lamp to be replaced also be able to reduce direct greenhouse gas retirement of old units. materials used to build the machine. Fuji Xe- by more efficient lighting solutions available emissions by 50 percent across its smelters Tata Steel’s effort to improve the energy rox has also made a significant contribution today. The company maintains that a suc- through the introduction of environmentally efficiency of its production process originated of ideas and technologies, obtaining over 200 cessful switch-over would make a significant friendly technologies and modernization of during the world oil crisis in 1973-74. At that patents to make recycling of machines and contribution to addressing climate change, as existing smelters. In addition, the company time, the company’s energy consumption was cartridges economically viable. In recognition 80 percent of all lighting in the home is still uses hydropower as a clean energy source to high and ever since there has been a continu- of its efforts to save energy, the company has using incandescent light bulbs that wastes 95 satisfy 80 percent of its energy demand for ous effort in the company to reduce usage. By been awarded the METI (Government) Energy percent of energy as heat. aluminum production. 1985, energy consumption was brought from Award for nine consecutive years. In a press release, Royal Philips Electronics UC RUSAL became the first Russian com- 12 to 10 giga-calories per ton of liquid steel; Fuji Xerox began its environmental engage- notes that today a large number of alterna- pany to complete the monitoring and analysis by 1995 it was brought to less than 9 and by ment in the early 1990s: in 1991 the company tives for the incandescent light bulb exist; the of greenhouse gas emissions, and as part 2005 to less than 7. Now it is 6.5 giga-calories established a basic environmental policy, and company offers a new generation of high- of its environmental strategy the company per ton of liquid steel; in next four years the in 1994 it created a Year 2000 Vision that quality Compact Fluorescent lamps and a new emphasizes compliance with environmental company will bring it to 5.5. declared the company would become a world generation of energy-saving Halogen retrofit legislation and modern standards. All alumi- Muthuraman of Tata Steel told GlobeScan leader in environmental contribution. Fuji light bulbs, which offer 50 percent energy num smelters and 7 alumina refineries are that the company plans to achieve further Xerox set a target of implementing the “three savings compared to incandescent lamps. In certified in line with ISO 14001 (environmen- reductions in CO2 emissions by installing 13 Rs” of reduce, reuse, and recycle, and started addition, new LED lighting technologies offer tal management), and an integrated corporate new projects between now and 2011. These to focus on developing energy saving technol- promise of even greater energy savings in the management system is being established for are capital projects in various areas, such as ogy. The company started to gather machines future. the management of environmental issues and iron making and steel making. “In 2008, we for recycling in 1993, and launched its recy- Royal Philips Electronics has been lobbying risks. said we must have a vision for next 5 years. cling system in 1995, changing the designs of actively in Europe to legislate the phasing out The company has also signed a memo- We sat down and made that vision; we set machines to make recycling easier. of incandescent light bulbs, observing that a randum with United Nations Development goals,” Muthuraman explains. “We have In the beginning, the company experi- switch would support the EU’s new energy ef- Program regarding a preparatory project cascaded to all departments: sites in India, enced losses with its recycling program, as re- ficiency plan to achieve 20 percent savings by designed to accelerate greenhouse gas emis- UK, Netherlands, South East Asia, etc. I am cycling cost more than buying new parts and 2020. Legislation has already been introduced sions reduction efforts among industrial talking 13 projects in India.” building new machines. To finally become in Australia and in the state of California, and companies, and participates in international “There has been no resistance to this; the profitable after eight years, Fuji Xerox’s Tosh- now the EU Commission is also working on it. initiatives, such as UN Global Compact. goals have been accepted,” Muthuraman io Arima explains that the company needed a De Bruin notes that the switch needs to UC RUSAL’s Vera Kurochkina told GlobeS- continues. “These cost money; however, it is clear policy that this was the way it needed to be done mainly in office and street lighting. can that there has been no difficulty imple- our vision.” move. “We really worked to make this socially “Interestingly, for street lighting the owner menting the strategy, and that the govern- good thing become economically viable, is usually the government, so this is a real ment has been supportive of the effort. Veolia heats town with renewable through many new ideas and technologies ‘practice what you preach’ story: most govern- On its website, the company writes that energy and schemes throughout the gathering pro- ments want to reduce CO2 emissions, but “UC RUSAL places great emphasis on assessing Since Veolia was contracted to manage cess, logistics and transport, breaking down they also need to purchase street lighting - in the impact its activities have on the environ- the district heating network in Vénissieux, machines… creating a three-generations most cities around the world street lighting ment; the safeguarding of nature reserves; France, the company has upgraded the facili- design where one component can be used is a technology 30 years or older, so it’s a real environmental awareness, and cooperation ties, saved costs, and protected the environ- in [the] next generation product.” Today, the business case for us and we have great solu- with the communities within its operational ment. company is establishing its recycling process tions there. We could easily save on a global regions.” By switching its boiler plant in 2001 in other Asian countries where it operates. level 160 billion euros in cost savings, and it’s from high viscosity heating oil to renewable The effort to reduce the power consump- a tremendous amount of CO2 that we could Tata Steel saves energy and cuts energy—animal fat, wood and cogeneration─ tion of Fuji Xerox’s machines was also reduce.” emissions rises in consumer energy bills were halted. challenging in terms of achieving economic Tata Steel, based in India, reduced the energy Since then, the Vénissieux boiler plant’s viability. Arima observes that the common UC RUSAL develops new technologies consumption of its steel production from 12 improved energy mix helped reduce energy perception among engineers was that if they UC RUSAL, the aluminum and alumina to 6.5 giga-calories per ton of liquid steel over costs and cut pollution emissions. In 2002, used materials for better fusing, the cost producer based in Russia, adopted the “Paving 30 years, and plans to bring it to 5.5 in the Veolia Energy replaced 16% of the heating oil would go up. The top management, however, the Way to a Safer World” strategy in 2007 next four years. The company has set a vision used to fire the boiler with an original form had the vision and perception to recognize as part of an initiative to minimize the risk to reduce CO2 emissions from 1.8 to 1.5 tons of renewable energy: animal fat. This switch that environmental concerns and recycling of climate change. The company currently by 2012. led to savings of 6,880 metric tons of CO2 was an upcoming trend. “We had to make our invests US$100 million in R&D annually to As part of the company’s continuous ef- right from the first year. In 2006, Veolia En- policy very strong and clear that this is the improve energy efficiency, and will have fort to reduce energy, an intensive energy ergy optimized the boiler plant’s energy mix way we will go – and you guys have to work invested over US$10 billion into new projects saving campaign achieved a drop from 45.39 by building a wood-fired boiler, which now on this.” and the modernization of current production G. Joules/ton to 29.52 G. Joules/ ton of crude supplies 15% of the energy, and a gas-fired 46 cogeneration plant that supplies 42% of the The company looked intensely at its supply energy mix. As a result, CO2 emissions have chain to manage significant reductions in been cut by 19,700 metric tons, dust particles paper use, and introduced advanced technol- by 30%, and sulfur dioxide by 44%. ogy, such as automatic lighting systems and A total of €6 million was invested to movement sensors in new buildings, to re- replace part of the energy generated from duce energy consumption. “It’s a boring story heating oil with energy generated from in a way, but you can get very significant wood. As a source of energy, wood has high reductions by doing relatively straightforward environmental qualities: a biomass product, things,” notes Westpac’s Noel Purcell. unlike fossil fuel energy, wood is a renewable One of the initiatives, launched in 2004, is source of energy. Further, its use is carbon “The Great Paper Challenge.” Westpac looked neutral. The medium-term goal is to raise the at its extensive use of paper across the com- share of renewable energy from 15% to 35% pany, looked at the supply chain intensely, by increasing the amount of energy supplied and managed very significant reductions in from wood. paper use. The initiative was then extended The cost of the installation (wood boiler into the wider community, offering the 1.9 and cogeneration plant) amounted to €14 million customers who use Westpac’s internet million; by 2006, it generated revenue of €9 banking services to receive their statements million. Since 2002, the cost per kWh has on-line through the company’s ‘e-statements’ increased at a slower pace than if energy initiative. Apart from significantly cutting derived from fossil fuels alone had been used. paper consumption and the resulting green- Also, the price of hot water has stabilized be- house gas emissions, the initiative has also led low what it would have been had the energy to substantial bottom-line benefits. sources not been diversified. Westpac has also taken a leadership role As Veolia’s Muriel Voisin explains, the in terms of advocacy, and was one of the company’s integrated management systems key drivers of what became the Australian are designed so that all its activities may con- Business Roundtable on Climate Change. Six tribute to reducing emissions. “Our business months or so before the Stern report came model is to contribute to reducing emissions out, the Australian Business Roundtable by trading emissions and capturing carbon. on Climate Change published a report that We measure greenhouse gas emissions that came to similar conclusions and had a major come directly and indirectly from our activi- impact on changing the whole political and ties, so that we also avoid emissions for the policy environment in Australia. Purcell notes client.” that many of Westpac’s customers – many of In a statement to GlobeScan, Veolia adds the bank’s customers are in the coal and other “The company puts great emphasis on raising carbon-intensive industries – were unhappy customer awareness of the impact of their with the report’s call for urgent action on cli- consumption on the environment in order mate change and its suggestions for emission to encourage them to adapt their behaviour caps and a trading system. in favour of sustainable development and In response, Purcell remarks that “the responsible consumption and to enable business world can not afford to sit back and customers to increase energy efficiency and think that this is someone else’s problem, that lower energy and water bill.” government and regulators have to prepare “Management of the GHG emissions en- the way for them. Business has to take leader- PHOTO CREDITS: ables us to broaden the scope of our energy ship and has to speak out. It’s not always efficiency and carbon services.” easy, and will come at the cost of adaptation Page 4 © W. G. Allgoewer / Still Pictures and change; but the alternative is a lot worse; Westpac reduces carbon footprint Page 7 © Svetlana Tebenkova inaction is a lot worse.” Page 8 © JTB / Still Pictures Westpac, an Australian bank, has reduced Page 13 © hougaard malan its carbon footprint by reducing emissions, Page 21 © JOERG BOETHLING / Still Pictures largely from premises and paper use, by Page 23 © christian Lagereek around 45 percent since 1996. The company Page 27 © ADRIAN ARBIB / Still Pictures has also been an early leader in supply chain Page 34 © Dan Driedger management, and has put all its core sup- Page 37 © Ricardo Funari / Still Pictures pliers through the sustainability system of which carbon is a key piece. The Ten Principles of the United Nations Global Compact Human rights Principle 1 Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2 make sure that they are not complicit in human rights abuses. Labour Principle 3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4 the elimination of all forms of forced and compulsory labour; Principle 5 the effective abolition of child labour; and Principle 6 the elimination of discrimination in respect of employment and occupation. Environment Principle 7 Businesses are asked to support a precautionary approach to environmental challenges; Principle 8 undertake initiatives to promote greater environmental responsibility; and Principle 9 encourage the development and diffusion of environmentally friendly technologies. Anti-corruption Principle 10 Businesses should work against corruption in all its forms, including extortion and bribery. Published by the UN Global Compact Office Contact: globalcompact@un.org May 2009