Corporate Carbon Strategies: Threats and opportunities arising from the new energy imperative

Date: March 22, 2011
Pages: 190
Price:
US$ 2,875.00
Publisher: Business Insights
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: C8918F2720CEN
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Corporate Carbon Strategies: Threats and opportunities arising from the new energy imperative
Climate change is now central to many national and international political and legislative agendas: businesses must take this into account in planning strategically.

This report is a summary of and a response to that rapidly changing picture. It takes account of recent events, including the failed international initiative at Copenhagen in 2009: and it proposes a framework and approach for businesses seeking to get this issue right, without tying themselves down with open-ended spending obligations.

Scope of this research
  • Newly developed framework tool enabling companies to evaluate their own corporate social responsibility achievements
  • Overview of political and legislative tools available to governments seeking to regulate corporate energy use
  • Recommendations for future policy: balancing consumer demand, regulatory pressure and business need
  • Principles of brand and marketing in a world attuned to corporate social responsibility
  • Case studies covering corporate initiatives by business sector and by business focus
Research and analysis highlights

Climate change is now central to many national and international political and legislative agendas: businesses must take this into account in planning strategically.

Consumer response to climate change is far less homogenous than believed: in addition to being inconsistent and ill-informed, there is a distinct consumer segment that actively resists business “over-reaction” in this area, penalising those businesses believed to be adding cost unnecessarily through csr programmes.

Business solutions need to take account of the fact that their CO2 emissions are the result of complex interactions between inter-locking areas in business: change needs to be considered holistically (to ensure that improvement in one area is not wiped out by worse performance in another).

Key reasons to purchase this research
  • What are the key issues driving the development of corporate social responsibility initiatives?
  • How can business evaluate their own performance in this area? Where can they go for assistance?
  • What is the downside to CSR, both in terms of failure to adapt (under-performance) and taking it up too enthusiastically (over-delivery)?
  • What are some of the key areas where businesses need to review their CSR performance?
  • What are the “quick win” areas? Review of consumer attitudes in the area of environmental friendliness
Table of Contents
About the authors
J. Ozimek
Professor Merlin Stone
Disclaimer
Executive summary
Corporate social responsibility: key themes
Mapping the energy landscape: the climate change challenge
Options for combatting climate change
Global drivers to change
National policy instruments
The role of carbon trading
Consumer drivers
A framework for strategic compliance
Operational approaches to compliance
CO2 emissions reduction: case studies
The role of marketing
Conclusion and recommendations
Preface and key themes

CHAPTER 1 THE CLIMATE CHANGE CHALLENGE

Summary
Introduction
Climate change as political fact
Emissions impact
Human intervention
Factors undermining the Kaya identity
The effect of prosperity on CO2 intensity
The relationship between energy intensity and prosperity
The impact of recession on CO2 emissions

CHAPTER 2 OPTIONS FOR COMBATTING CLIMATE CHANGE

Summary
Introduction
Main physical principles involved in reducing CO2 emissions
Fuel switching
General principles
Fuel switching in practice
Power generation
Transport
Buildings
Reducing demand
The mode shift option
Optimization and behavioral change
Dynamic/integrated optimization
Network optimization
Smart grid approaches
Adopting more efficient equipment
The main alternatives to reducing CO2 emissions
Carbon capture and storage (CCS)
Land Use, Land-Use Change and Forestry (LULUCF)
Drawbacks to the LULUCF approach
The principle of adaptation

CHAPTER 3 GLOBAL DRIVERS TO CHANGE

Summary
Introduction
Global political drivers
Global pressures: the significance of the Kyoto Protocol
The Kyoto mechanisms for controlling GHG emissions
Monitoring emission targets
Reducing emissions from deforestation and forest degradation (REDD)
Beyond Kyoto: a failed initiative in Copenhagen
Beyond Kyoto: new hope from Cancun, Durban and South Korea

CHAPTER 4 NATIONAL POLICY INSTRUMENTS

Summary
Introduction
Quantifying the drivers
The underlying message behind consumer concern
The role of national incentives
Emissions reduction: the regulatory framework
Regulatory
Labelling Programs
Energy audits
Financial measures
Fiscal measures
Cross-cutting measures
Evaluation and awareness of energy efficiency programs

CHAPTER 5 THE ROLE OF CARBON TRADING

Summary
Introduction
Carbon tax
Effectiveness of direct taxation
From cap-and-trade to carbon tax: the UK’s carbon reduction commitment
Scheme outline
Performance league table
The theory behind carbon markets
Trading units
EU emissions trading system (EU ETS)
How the EU ETS works
Scale of the EU ETS
Business implications
The carbon trading loophole
Voluntary trading schemes
Slower growth in the voluntary carbon markets
Factors impeding voluntary carbon market growth
US and China: an “alliance of denial”
National perspectives: a round-up

CHAPTER 6 CONSUMER DRIVERS

Summary
Introduction
Consumer demand
National difference: the US
What consumers do – not what they say
China following in Western footsteps on electric cars
Perception is key
Consumer mis-estimation of energy usage
Numerate environmentalists – and mis-guided consumers
Greenwash
Consumer hostility
UK experience: over-enthusiastic environmentalism
Get it wrong – and sorry may not be enough
The importance of segmentation
The consumer: sophisticated actor in the environmental drama

CHAPTER 7 A FRAMEWORK FOR STRATEGIC COMPLIANCE

Summary
Introduction
A compliance framework for the whole business
A basic compliance model
The core business activity
Theoretical underpinning to the business model
Focussing the strategic review externally as well as internally
Risk assessment and metrics
Policy checklist and drill-down
The key question
Other players offering strategic input and solutions
Consultancies: Ernst & Young
Other consultancies
Academic support
Government initiatives: strategic support for CSR
Other bodies providing support to business
Energy Savings Obligations motivate suppliers

CHAPTER 8 OPERATIONAL APPROACHES TO COMPLIANCE

Summary
Introduction
Technological focus
Drill-down energy audit
Supply chain focus
Energy efficiency within the business environment
Packaging focus
Global packaging trends
Material trends
Opportunities – and obligations
Legal pressures on packaging
Issues around consumer perspectives on packaging
Solution and framework for packaging sustainability

CHAPTER 9 CO2 EMISSIONS REDUCTION: CASE STUDIES

Summary
Introduction
Approaches to identifying lead companies in sustainability
The Dow Jones sustainability indexes
Adding detail to the Dow Jones Sustainability Index
Available indexes in the area of sustainability
World leaders
Dow Jones Sustainability companies distributed by country
Dow Jones Sustainability companies distributed by continent
Threat to US role in sustainability
Other examples of sustainability indexes
Non-financial approaches to identifying sustainability leaders
Case studies in sustainability leadership
Sustainability as cross-business objective
Wal-Mart
Wal-Mart sub-goals for environmental sustainability
Wal-Mart sustainability programmes
Toyota
Toyota approaches to reducing energy consumption
Sustainability by tackling supply chain issues
PepsiCo
Strategic embedding of PepsiCo sustainability initiative
Hewlett Packard (HP)
Sustainability through energy efficiency
United Technologies Corporation (UTC)
Bank of America
Packaging and resource efficiency initiatives
Coca-Cola
Measuring the environmental impact of its supply chain
ASDA
Nestlé

CHAPTER 10 THE ROLE OF MARKETING

Summary
Core messages: credible, accurate, informative, clear
Real CSR versus “vanilla” (greenwash)
The right way to provide information
Branding and communications strategy
The role of social media
Do
Don’t
Self-promotion
O2 eco rating for phone handsets
SAP Sustainability reporting
The SAP approach to communicating energy information
In the news: typical news stories focusing on CSR
Awards for sustainable practice
Regional trends

CHAPTER 11 CONCLUSION AND RECOMMENDATIONS

Summary
Current state
Consumer confusion
Business complacency?
Learnings
Actions now
Future outlook
Geo-politics
Consumer resurgence
Competitive issues

APPENDIX

Scope
Methodology
Primary research
Secondary research
Glossary/Abbreviations
Bibliography/References
Major Source Works
Key companies used for source material
Key companies cited in cases

TABLE OF FIGURES

Figure 1: The Kaya Identity
Figure 2: Primary energy intensity at 2005 purchasing power parities in koe/$2005p
Figure 3: Primary energy intensity versus GDP per capita ($) at 2005 purchasing power parities in koe/$2005p, 2010
Figure 4: Benefits of eco-efficiency (%), 2010
Figure 5: Examples of energy labeling, 2010
Figure 6: WEC energy efficiency framework selection screen
Figure 7: Selection from WEC Base: audits by country
Figure 8: Selection from WEC Base: All measures within one country (Switzerland)
Figure 9: Effectiveness and scope of emission reduction strategies, 2010
Figure 10: Voluntary carbon market trading volumes (MtCO2e), 2010
Figure 11: Transaction volume, (MtCO2e), global carbon market 2007-2009
Figure 12: Transaction value, ($m), global carbon market 2007-2009
Figure 13: Perceptions of energy saved versus energy actually used (Wh), 2010
Figure 14: Perception of perceived versus actual energy saved for automobiles (Wh), 2010
Figure 15: Perception of perceived versus actual energy saved for beverage containers (Btu), 2010
Figure 16: A framework for business energy compliance, 2010
Figure 17: Business compliance framework (core value chain), 2010
Figure 18: Business case for co-generation, 2010
Figure 19: Ernst & Young supply chain analysis tool, 2010
Figure 20: Framework for energy efficiency analysis (buildings), 2009
Figure 21: Proportion of glass containers recycled by country (leading European economies), 2009126
Figure 22: Sustainability scores for Panasonic Electric Works Co. Ltd, 2010
Figure 23: Distribution of Dow Jones supersector leaders by country (Number of companies), 2010138
Figure 24: Distribution of Dow Jones supersector leaders by continent (Number of companies), 2010
Figure 25: Scheme of Wal-Mart central energy control, 2009
Figure 26: Toyota overview of energy usage through the product lifecycle, 2009
Figure 27: PepsiCo model of supply chain, 2010
Figure 28: Carbon footprint of a 330ml Coca-Cola can containing 170g CO2e, 2010
Figure 29: Example of eco-rating label used by O2, 2010
Figure 30: SAP Sustainability Reporting Dashboard, 2011

TABLE OF TABLES

Table 1: Temperature increase at equilibrium relative to pre-industrial (°C)
Table 2: Key ratios for energy-related CO2 emissions, 2007
Table 3: Primary energy intensity at 2005 purchasing power parities in koe/$2005p
Table 4: Primary energy intensity versus GDP per capita ($) at 2005 purchasing power parities in koe/$2005p, 2010
Table 5: Benefits of eco-efficiency (%), 2010
Table 6: Carbon taxes prevalent in Northern Europe, 2010
Table 7: The carbon market at a glance, volumes and values in 2008-09
Table 8: Voluntary Carbon Market trading volumes (MtCO2e), 2010
Table 9: Transaction volumes (MtCO2e) and values ($m), global carbon market 2007-2009
Table 10: Framework for identifying key business issues in climate change and sustainability, 2010108
Table 11: Focus for sustainability consortium, 2009
Table 12: Example building energy audit, 2010
Table 13: Ernst & Young supply chain analysis key questions, 2010
Table 14: Proportion of glass containers recycled by country (leading European economies), 2009125
Table 15: Dow Jones sustainability index corporate sustainability assessment criteria, 2010
Table 16: Dow Jones supersector leaders (2010/11), 2011
Table 17: Distribution of Dow Jones supersector leaders by country (Number of companies), 2010137
Table 18: Distribution of Dow Jones supersector leaders by continent (Number of companies), 2010
Table 19: Wal-Mart plan for implementation of sustainability goals, 2009
Table 20: Carbon footprint of a 330ml Coca-Cola can containing 170g CO2e, 2010
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