Money is tight, credit is well and truly crunched and, while your finance team may be delighted to consider cheap and cheerful ideas for cutting your firm's energy usage, cash is scarce for new investment in green technology. Yet, although experts disagree on many things on the green agenda, they concur that those who do nothing now will face serious, if not insurmountable, problems catching up later. So what can you do, and are there carrots as well as sticks?
"Cataclysmic finger-wagging is not the way forward," argues Hilary Benn, secretary of state for the environment. "The great challenge is how we can get sufficient contributions on the table internationally to make a difference--given that we have less time than we thought. We're all in this together. We've got a problem and you've got a problem. If sea levels rise and Bangladesh floods, people will move next door to India. If the Himalayan glaciers melt, it will have a catastrophic effect on China. So how can we help other countries to pursue development in a low-carbon economy?"
Unsurprisingly, Benn argues that we must put our own houses in order first. We need commercial-scale carbon capture and we need to give technological and financial help to countries to help them skip the carbon-producing industrialisation processes that we went through--without curtailing growth.
"There's a temptation in a difficult economy to say the environment must wait. That would be a profound mistake," Benn warns. "If you contemplate the economic impact of runaway climate change, it will be huge--that's what the Stern review showed clearly: the total cost will be equivalent to that of both world wars and the great depression thrown in for good measure. That's a pretty powerful argument for getting on with it."
But rising energy prices are creating a strong incentive to reduce energy usage, points out Gary Parke, chief executive of Evolve Energy. "How often do you get the chance to please both the FD and the head of investor relations?" he asks.
"There are many energy-efficiency opportunities that won't cost money to society overall, particularly in buildings and transport," says Rhian Kelly, head of climate change at the CBI, which jointly published a research report with McKinsey on climate change last year.
Parke adds: "It may look sexier to have a wind turbine that you can picture on the front of your shareholder report than to say you've cut your energy consumption, but I think shareholders are going to be more impressed by the figures inside."
Some developments are impossible without investment. But Hugh Jones, solutions director at the Carbon Trust, has a stark warning for any company thinking of cutting back on investment in emission-reduction initiatives in the near future.
"A lot of companies have said lots of things about what they will do. Those that deliver will be remembered by their customers--and so will those that don't," says Jones, who is adamant that in the next five years all companies should at least have calculated their carbon footprint.
There are ways to incorporate a carbon-reduction strategy without breaking the bank-and many external and internal incentives, apart from legal requirements. Incorporating green analysis and actions into your corporate strategy should please (or at least reassure) customers, employees and investors and it may also cut your insurance premiums. Financial institutions are also signing up to voluntary agreements to ensure that large investments are environmentally sound. This trend is likely to accelerate as green issues become further associated with business risk. Meanwhile, organisations at the far end of the spectrum are encountering demands to account for the emissions produced by their suppliers. Ford is under pressure from fleet managers, for example (see "Change drivers", September), while the Royal Albert Hall is being questioned by performers and visitors. …