World class carbon management needs business transformation

by Search Gate staff. Published Thu 18 Feb 2010 00:35
Big business needs to recruit chief sustainability officers, says report

Until CEOs take ownership of carbon management as a business transformation challenge, not a corporate responsibility issue, their firms will fail to achieve absolute reductions in CO₂ emissions, according to a new report from independent research firm Verdantix.

World class carbon management requires the appointment of a Chief Sustainability Officer, a cross-functional strategy for reductions with a 2020 target, co-ordinated business process changes and an integrated carbon management technology platform.

“Dumping carbon management responsibility on CSR Directors without providing them with the authority or budget to execute dooms many carbon reduction plans” commented Peter Charville-Mort, the Verdantix Analyst who led the study.

“Our research with 33 industry experts shows that underneath the green-wash, most firms flounder with weak carbon management initiatives. Evidence of failure includes CSR and energy managers who don’t get the opportunity to explain carbon issues to senior execs, decision-makers who struggle with terrible energy data, unachievable CO₂ reduction goals and initiatives that progress at a snail’s pace due to insufficient staff and funds.”

The Verdantix report, Best Practices For Carbon Management, provides detailed advice on the development and implementation of a carbon business transformation plan. To achieve absolute CO₂ reductions year-on-year firms need to:

* Strengthen governance to deliver transformational change. Dumping a broad, carbon-related change programme on the CSR Director is doomed to fail.

* Best-in-class carbon management requires a Chief Sustainability Officer(CSO) with a small Programme Management Office that quantifies value and risk, co-ordinates initiatives and engages stakeholders. The CSO should be picked from a general management role internally.

* Create a 2020 strategy for carbon management. CEOs first need to get the right people on the bus – with the CSO in the driving seat – and then buy into the carbon journey to 2020. Post-2020 firms need a transformation vision due to much tighter regulation and intense customer pressure for sustainability credentials. Climate change and sustainability advisors at firms like Deloitte and Ernst & Young are well-positioned to provide strategic input.

* Design cross-functional process changes across energy, operations and finance. Ongoing cuts in carbon emissions require a portfolio of projects such as building management systems and electric vehicle fleet trials. To succeed with multiple, simultaneous changes firms need a programme based on granular energy and fuel data, financial analysis of projects and assessment of unintended consequences. Consultants like CH2M Hill, Scott Wilson and WSP Energy have expertise in project-related carbon and energy services.

* Implement integrated carbon management systems technology. To reduce carbon emissions firms need accurate, timely and complete data on energy and fuel consumption. World class carbon management requires not just energy and carbon software from vendors like CA, Hara and Verisae but also metering systems from providers like Landis + Gyr that track energy consumption or refrigerant leakage at the asset level.

“Absolute reductions in CO₂ emissions require transformational change across governance, strategic thinking and process redesign. But today, firms only achieve incremental change.” added Verdantix Director, David Metcalfe. “Time is running out for CEOs to act before the jaws of GHG compliance regimes and competitive pressures on sustainability close around them. Seventy-six per cent of the global industry expert panel believe weak carbon management will pose a material risk by 2015.”

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