Think Tank Report Provides Best Practices for Business GHG Strategy

Last year, the Pew Center on Global Climate Change released a very interesting report called “Getting Ahead of the Curve: Corporate Strategies That Address Climate Change,” which shows how large corporations are getting ahead of the regulatory curve and developing their own strategies to deal with climate change.

About a year old now, the report shows just how far ahead some of these companies have been in calculating their response to GHG emissions and shifting from reactive to proactive. When you realize that this study was released before Al Gore won the Oscar, the Emmy or the Nobel Peace Prize, you have to understand that what I’ve been trying to say about innovation in the enterprise dated from long before Gore’s film, An Inconvenient Truth bludgeoned unwary consumers with melting polar ice caps.

Of course the large multinationals were aware of the conditions before the average guy: they operate globally in the forests, rivers, skies and oceans, and they see the effects of climate change firsthand. And far from being cold and uncaring, large corporations with strategic plans know that if they don’t do something, their businesses will not be sustainable.

So they have sought to get out ahead of public policy, not for their financial gain, but for their very survival.

The report describes eight steps to a climate strategy: assessing emissions and exposure
to climate-related risks, gauging risks and opportunities, evaluating action options, setting goals and targets, developing financial mechanisms, engaging the organization, formulating policy strategy and managing external relationships. These steps are not always taken in the same order.

There are four main lessons from this study. The first is the importance of strategic timing. Though some companies thought they started too early, most feel they can’t afford to start too late. The second, related lesson is developing an appropriate level of commitment. Committing too fast to a strategy might position a company poorly if the regulatory environment develops in a different direction. As an enterprise, you have to do the things YOU think are right, and still have resources remaining to do what the government may require.

The last two conclusions are obvious. They are to become involved in policy formation and try to exert some influence over it, since the marketplace knows where the biggest risks are – it’s our job to keep our businesses alive by assessing risk correctly. And then to create business opportunities from these risks and policies; I talked about the last time.

Add comment November 2nd, 2007