Reducing risks through emission reduction

by James Garvie, RSK

James coordinates environmental consultancy RSK’s climate, air quality and pollution prevention and control (PPC) services. He is a chartered chemist with over 15 years of experience and a member of the Institute of Environmental Management.

What’s going on?

In an age where erstwhile Teutonic action hero and current governor of California Arnold Schwarzenegger is emerging as poster child for the progressive green movement, where Al Gore evolves from a presidential also–ran to climate change magus – picking up an Oscar and a Nobel Peace prize in the process – and the Pope installs solar photovoltaic panels at the Vatican, there is no doubt that climate change has become a mainstream concern.

Even Kyoto Protocol–dodging George W. Bush mentioned it in this year’s state of the union address for the first time. Then, at June’s German G8 summit, he went one better by jointly declaring with other world leaders that an agreement had been reached to seek “substantial” reductions in emissions – something the US had previously resisted, saying it would not even discuss a post–Kyoto deal.

As for the UK Government, it threw down the gauntlet in March 2007 with a draft climate change bill that sought a 60% reduction in carbon dioxide emissions by 2050 (compared to 1990 levels), with an interim target of between 26% and 32% by 2020.

Canny operators are already attuning to a carbon–constrained economy where emissions are no longer a fleeting by–product of profit and progress but a tradable commodity.

Inaction, complacency, ignorance and poor energy and carbon management is simply not an option for those wanting to stay competitive.

As shown by the work of the independent Carbon Disclosure Project, which cooperates with 2,400 corporations to disclose greenhouse gas emissions, investors and other stakeholders are shying away from brazen polluters and turning to organisations that are effectively managing their environmental risks and emissions.

Clearly, this is no longer just about emission reduction in its own right but about ensuring future operational efficiency and profitability.

To offset or not to offset?

In its current embryonic, relatively unregulated guise, carbon offsetting can be contentious and of dubious efficacy, especially if used as the only means of emissions management.

It is a question of application: just because you underwrote a thicket in Uganda, don’t assume you can pollute with impunity. To achieve optimal results that are defensible under scrutiny, the first step should always be to reduce energy demand and emissions, followed by the adoption of low carbon supply options and, finally, through devising a residual offsetting strategy.

The truth of the matter is that offsetting alone does not prompt the behavioural changes needed to make businesses energy efficient in the long run and to make them provide traceable and resonant local emissions reductions.

That’s not to undermine the potential impact such schemes can have. If integrated into a robust emissions management strategy (as detailed below) and, particularly if linked in to official emission trading schemes such as the Kyoto–inspired European Union Emission Trading Scheme, an offsetting programme can pay dividends not just to your business but also to the communities where, for example, trees are planted and jobs are created.

What to consider

So how does an organisation go about achieving a cost–efficient and manageable strategy that delivers both business and environmental benefits?

As one would expect for such a potentially diverse undertaking, there are many approaches that can yield results provided the rationale is understood, all current emissions are accurately profiled, knowledge gaps are identified and a reduction target compatible with the organisation’s time and resource parameters is set.

The basic tenets of such an approach are outlined below.

Promoting the business rationale and getting staff buy–in

Any successful business initiative is reliant on a company–wide commitment to the process. Pre–empt impending statutory or regulatory requirements and alleviate fears among your staff that your and the government’s new stances won’t lead to inhumane workloads with zero benefits.

A good start is to get senior management to disseminate a reduction policy that explicitly defines responsibilities, and to establish a network of internal champions to gather knowledge, broadcast information and ensure widespread employee participation.

When attempting to engage your staff, avoid being hampered by overly stoic procedural shackles; be creative. For example, offer a small prize for the best energy–saving suggestions or organise an inter–department or inter–site competition for energy savings/reductions.

Nothing like a bit of good–natured competition to save the planet and your business!

Effectively scope out the areas of business and type of emissions that need to be considered

‘Direct’ carbon dioxide and other greenhouse gas releases may occur at numerous discharge points, such as boilers and cooler systems that lose refrigerants. You must also consider ‘indirect’ emissions, for example energy supplied by an off–site source such as the national grid. Where applicable, the emission reduction strategy remit can extend to supply chain activity.

Quantify Your Emissions and Contributions from Each Principal Source or Location

Accurate emissions calculations are critical for investor and stakeholder confidence in your company’s reporting and for ensuring that any financial appraisals of the available options are robust. Well–established, credible reporting mechanisms include the European Union Emission Trading Scheme and the Greenhouse Gas Reporting Protocol (WBCSD/WRI) (www.ghgprotocol.org). The latter can also deal with emissions caused by business partners.

If your company has an environmental management system in place, its reporting procedures may very well do much of the work for you, with the added benefit of not being alien to your staff. It will also assist with any verification requirements.

Identify the Business Risks and Potential Exposure Associated with Each Source

Itemising the risk and exposure at each source enables you to prioritise actions, devise incentives and establish a hierarchy of implementation measures.

Establish an Agreed and Realistic Reduction Target, Timescale and Measures that Will Achieve Success

There is no all–encompassing solution to emissions reduction as no two businesses are the same, but there are some “quick wins” everyone should aim for. Simple behavioural changes alone, such as turning off lights etc., can result in huge savings. Another – often surprisingly overlooked – option is to switch to a green energy supplier and improve building insulation.

A discounted cash flow analysis will help identify what measures are the most economically attractive in terms of cost per tonne of greenhouse gas reduced. It is important to involve the workforce in this process as their ideas can prove invaluable and they can identify shortcomings at the coalface.

Consider Collaborative Efforts

Some emission reduction schemes, particularly those associated with energy supply may benefit from collaboration with neighbours through methods such as combined heat and power systems.

Report Progress and Achievements, Review, Update and Enhance

As with any business programme, progress should be reviewed and the strategy revised as appropriate, successes celebrated and publicised, and the scope of the strategy expanded as the programme is invariably enhanced.

How can my offsetting make an impact?

Once you’ve initiated enough influential company–wide behavioural and systemic changes to conscionably walk the talk then, and only then, should you turn to offsetting. When you do, it is crucial to remember that nowadays stakeholders can spot superfluous physiognomic affectations a mile away. You’re looking to make a verifiable, auditable impact. Look for independently–endorsed schemes (the Pure Clean Planet Trust is one example) that contribute to removing industrial licences to pollute (e.g. carbon credits) while simultaneously funding Kyoto Protocol emissions reduction projects. Where possible, seek to associate with projects that can attain the coveted and much lauded seal of approval by the Gold Standard Foundation (www.cdmgoldstandard.org).

Don’t be afraid – you can’t afford to!

The law says you’ve got to reduce emissions, your stakeholder and investors demand you do it and the media lies in wait with its tar bucket and sack of feathers to broadcast your failure if you don’t. This is no longer a peripheral concern for businesses and their supply chains; it is a stone cold imperative. Get help if you need it, get clean and reap the business rewards of being a responsible, well–adjusted, 21st–century corporate entity.