Businesses Profit From Climate Protection

 

An Energy Company

In 2008, Royal Dutch Shell emitted 75 million tonnes of greenhouse gases, about 7 million tonnes less than the previous year, and approximately 30 percent lower than in 1990. Much of the decrease is due to reductions in the company’s natural gas flaring. On its website, Shell says, “For us the debate on climate change is over. We are tackling the challenges of a new energy future.”

Royal Dutch Shell’s Greenhouse Gas Emissions

Royal Dutch Shell

A Retailer

With 8,000 stores in 15 countries, Walmart is the world’s largest retailer. The company recently adopted three ambitious sustainability goals: being supplied 100 percent by renewable energy, creating zero waste, and selling products that sustain people and the environment. In the last four years, the company has sold more than 260 million compact fluorescent bulbs, which will save its customers an estimated $7 billion on energy costs and prevent 52 million tons of greenhouse gas emissions.

During the next year, the company aims to double its production of solar power in California, and it recently pledged to slash 20 million tons of greenhouse gas emissions from its supply chain by the end of 2015 – the equivalent of removing more than 3.8 million cars from the road for a year. The company has much further to go, but it is making headway.

All over the world, companies large and small are beginning to build climate protection into their images and their bottom lines. Some are famous multinationals – Dow, Toyota, Nike, 3M, IKEA, Intel, Google, Philips, Apple, and Dell. Others are smaller firms like Interface, Timberland, and New Belgium Brewing Company.

The motivations are diverse. Many companies, like GE, recognize that sustainability is not optional, that the energy problem is not going away, and that market demand for highly efficient gas turbines, windmills, locomotives, aircraft, and lighting products is destined to explode. Other retailers, like Aveda, want to strengthen a progressive brand and enhance customer loyalty. Still others grasp that reducing energy consumption and pollution can lead to simultaneous improvements in quality and profits. In Asia, the CEO of ST Microelectronics says that “efficiency is free.” Electric utilities, the source of nearly 40 percent of the world’s emissions, have concluded that some form of climate policy is inevitable and that it is best to be ahead of the curve.

Consumers play a critical role, since their expectations can drive corporate decision-making. By slashing its wasteful flaring of natural gas, Shell has simultaneously reduced its emissions and improved its public image. Walmart, the world’s largest retailer, has made a commitment to treat its employees more fairly, to source more produce from local farmers, and to cut 20 million metric tons of greenhouse gas emissions from its supply chain.

Improving corporate energy performance is a continuous process, more a journey than a destination. Like any journey, this one usually starts with a vision – a commitment to a new, more sustainable way of doing business. Next comes an inventory: How much money are we spending on energy compared to our competitors? How much carbon dioxide does it take to design, manufacture, ship, and retail our product?

Once a baseline is established, new targets and benchmarks can be selected. Some savings can be harvested immediately, through more intelligent management practices and improved “housekeeping.” Larger reductions may require new capital investments.

The profit motive drives companies to learn from each other. If Dell recycles older computers, Apple must, too. Cement and steel companies must reduce their energy intensity to preserve market share and stay profitable. Architects must learn to design high-performance buildings or go out of business. In this way, innovation spreads and emissions begin to fall.