Big Business Ponders a Low-Carbon Diet
Stephen Leahy
BROOKLIN, Canada, 21 Jan (IPS) - With a tax on carbon emissions appearing to be inevitable, some of the world's largest corporations will be asking their suppliers to report on their carbon emissions as part of future reduction efforts.

'Investors are demanding that companies know what their carbon emissions are and consumers want companies to be green,' said Paul Dickinson, CEO of the Carbon Disclosure Project (CDP), an independent not-for-profit organisation in Britain that is coordinating the effort.

'A global price for carbon is coming and we are helping companies to prepare to operate in a carbon-constrained world,' Dickinson told IPS.

Emissions from burning fossil fuels like coal, gas and oil are causing climate change, which is resulting in billions of dollars of damages and losses due to more intense storms, rising temperatures, increased flooding and so on. Many economists and policy experts recognise that unless emitters are forced to pay a high price for their carbon emissions, most will not change the way they operate.

In his new book 'Plan B 3.0: Mobilising to Save Civilisation', Lester Brown, president of the Earth Policy Institute, an environmental think tank in Washington, recommended a carbon tax scale-up of 20 dollars per tonne each year between 2008 and 2020, stabilising at 240 dollars per tonne. The tax would be offset at every step with a reduction in income taxes to discourage fossil fuel use and encourage investment in renewable sources of energy.

But few companies know what their carbon emissions are because there has not been any compelling reason to measure them, Dickinson noted. 'We're trying to change that because if companies don't measure their emissions, they can't manage them,' he said.

Each of the 11 corporations participating in the CDP's Supply Chain Leadership Collaboration (SCLC) will ask up to 50 suppliers to complete a standarised information request being tested in the first quarter of 2008. CDP's goal is to enlarge the SCLC and eventually involve tens of thousands of supply chain companies, and to help large firms and suppliers develop strategies to reduce their carbon footprints.

CDP is creating a single standardised approach to providing key climate change information throughout their supply chains. 'This is phase one of a larger effort later to measure emissions from all suppliers,' Dickinson said.

Participants in this first pilot project include Dell, Hewlett Packard, L'Oreal, PepsiCo, Cadbury Schweppes, Nestl, Procter & Gamble, Tesco, Imperial Tobacco, and Unilever.

'Our partnership with CDP in the Supply Chain Leadership Collaboration will give us tremendous insight to help reduce not only our own carbon footprint, but ultimately that of our supply chain,' said Tod Arbogast, director of sustainable business at Dell Inc. in a statement.

The results of the pilot will refine the process in preparation for the roll out and will enable large companies to work towards managing their total carbon footprint, as the first step to reducing the total carbon footprint is to measure its size. Then both large companies and their suppliers can work together to develop strategies to reduce their emissions.

'Many of the participants realise that reducing emissions by being more energy efficient lowers their energy costs,' Dickinson said.

Institutional investors are among those backing the CDP because they know climate change is reshaping the way business operates. While many European companies realise this, less than half of the United States' largest companies took climate change very seriously, according to a survey by Ceres and the Calvert Group, an asset management firm, conducted a year ago.

And most the world's banks have failed to get their collective minds around the new reality of the 21st century and continue to invest in coal-fired power plants or the development of Canadian tar sands -- two major sources of greenhouse gases.

'More banks realise that climate change is a big business issue, but their responses so far are the tip of the iceberg of what is needed to tackle this colossal global challenge,' said Mindy Lubber, president of Ceres, which published a new report on the banking sector this month.

The report, 'Corporate Governance and Climate Change: The Banking Sector', looked at 40 of the world's largest publicly traded banks and financial services companies. About half offered climate-specific funds and similar products, the report said.

The key to shifting banks away from continuing fossil fuel and high carbon investments is to a put a price on carbon emissions, said Lubber.

'If there is no price on carbon, this is exactly the wrong signal. Banks and pension funds need adequate market signals,' she said.