What are the initial steps that a company can do to make a positive impact on climate change from a business perspective?
Globally, companies and industries that use a large amount of energy, have significant GHG emissions or have carbon embedded in their products are addressing GHG exposures and incorporate climate change risks and opportunities into their business processes and decision making.
Steps of risk management
Accountability
- Quantify, independently verify, report emissions
- Designate responsibilities to individuals or departments
(e.g. management, executive, or even board / committee)
Management
- Integrate into decision-making process
- Efficiency programmes (energy and water)
- Initiatives, projects, programmes
- Targets for total emissions, intensity, renewable energy…
Leadership
- Stated position on government policy
- External collaboration and/or external advice
Learn by Doing
You can't manage what you can't measure
The starting point is for companies to measure their GHG emissions. The standard for doing this is the Greenhouse Gas Protocol developed by the World Resources Institute and the World Business Council for Sustainable Development, the Global GHG Register hosted by the World Economic Forum, and ISO standard 14064. While doing this, larger companies may respond to the Carbon Disclosure Project questionnaire (www.cdproject.net/questionnaire.asp
) whose questions systematically address the risks and opportunities of constraints on carbon emissions. A key part of considering these issues is to develop a robust metric for measuring the GHG intensity of each major aspect of a company’s business.
Next, many companies adopt voluntary climate-related targets such as improving energy efficiency and reducing GHG emissions. This can involve examining the GHG emissions of the life-cycle of the products they make. They may also invest in new technologies and projects designed to reduce emissions. This 'learning by doing' may improve a company’s competitive position and reduce avoid, or prepare for, future regulation of GHG emissions.
As an example, the MTR Corporation has implemented an internal policy on climate change that includes an energy optimisation programme as well as an internal educational programme. The Corporation considers the issue of climate change as an Enterprise Risk and it has assessed its operational, financial, safety, legal, reputational and environmental implications.
However, voluntary actions will not be enough to make significant progress in reducing GHG emissions and moving towards what commentators describe as the ‘low carbon economy’. In Hong Kong, there is growing concern that reducing emissions is not a question of cost, or a question of technology, but is a question of policy.
Still Much Work to Do
Despite the increase in numbers of corporations that are aware of climate change, there remains a large gap between awareness and action. Very few corporations in Hong Kong are reporting their greenhouse gas
emissions, and fewer corporations have reduced them or established emission reduction targets.