Reduce carbon footprint and maximise profits

Energy efficiency in business not only helps to maximise profits, but by reducing carbon footprint, it also enhances sustainability for the good of the company – and the planet, writes Jim McClelland

As a metric for business, the beauty of carbon is its “countability”. It offers a shorthand for comparative and compliant measurement of environmental impact. There are global trends, national targets, corporate emission statements, prices to trade and personal footprints to shrink.

However, if countries were issued with end-of-year school reports for low-carbon lessons, many in class might not pass.

Using its low carbon economy index, PwC calculates that maintaining economic growth without exceeding two-degree warming requires the G20 to reduce carbon intensity at 6 per cent a year. But five-year trends, however, show an annual average of only 0.7 per cent. Must try harder.

So why, if carbon is so simple, do some governments, businesses and people just not get it?

From a public administration and policy point of view, things soon become complicated, explains Kate Levick, director of policy and regulation at sustainability advisers CDP.

“Carbon is simple from a scientific perspective, but decarbonising economies is not simple at all. Governments are not a single entity, and comprise differing views and actors. They have typically gone through a learning curve where climate change starts off being an environmental issue, but it is then realised that in order to reduce emissions at national level, policies in many other areas – transport, industry, infrastructure – must be changed,” she says.

Carbon is simple from a scientific perspective, but decarbonising economies is not simple at all

For Carbon Visuals chief executive Antony Turner, the whole concept is almost counterintuitive to many. “The core of the challenge is that greenhouse gases are invisible. Humans are programmed to react to things that are visible. So we don’t, in some sense, believe emissions are real. Also the language and metric we use is kilos and tonnes – and most people don’t conceive that gases have weight or mass. There is an immediate communication disconnect,” he says.

According to Mark Kenber, chief executive of The Climate Group, real-world commercial pragmatism is key. “There are three critical drivers for the ‘clean revolution’, which will transform the economy to one that delivers low-carbon prosperity; these are leadership, innovation and collaboration,” he says.

“There needs to be a focus on innovation and collaboration, not around a mythical ‘magic bullet’, but rather around the 70-80 per cent of proven, viable solutions that are available today and which can be replicated and scaled-up.”

CARBON PRICING

Success stories are not hard to find. Coca-Cola Enterprises (CCE), which manufactures bottles and distributes Coca-Cola products across Western European markets, is on track to reduce the carbon footprint of a can of Coke by a third by 2020. Research at CDP has also found carbon pricing is driving innovation at leading US corporates, such as Disney, Goldman Sachs and Microsoft.

So, can cases of individual company achievement really prove game-changers for markets and sectors, benchmarking what is possible with energy efficiency and cutting carbon?

Not in isolation, they cannot, says Ramon Arratia, sustainability director at Interface EMEAI (Europe, the Middle East, Africa and India), the world’s largest designer and maker of carpet tiles, which is achieving 90 per cent carbon reduction at its factory in the Netherlands.

“Individual cases can start the awareness of what is possible. But there can’t be many successes if the rules of the game don’t reward low-carbon innovation. We need changes to the rules of the game and disruptive innovation. If the two go hand in hand, we get there,” he says.

Such systemic change calls for the joining up of agendas, linking low-carbon, circular, digital and local economies. In the case of local procurement, while delivery mileage might not often stack up significantly against figures for embodied energy and embedded carbon, there are still wins to be had, as Institute for Sustainability chief executive Ian Short explains.

“It can often be far more sustainable to use local and smaller suppliers as they tend to have a lower carbon footprint as a result of reduced travel, which minimises congestion and pollution, and their use of local sourcing solutions,” he says.

“Using local suppliers provides jobs for local people, who in turn spend money in the area, resulting in the ‘multiplier effect’. This means £10 spent locally circulates two-and-a-half times, so is worth £25 to the local economy. To take advantage of these benefits, large organisations need to adapt their processes. It takes commitment at senior level to change the approach to procurement.”

Identifying booming renewables and low-carbon retrofit markets as huge business opportunities, the institute has just launched a free local procurement and supply chain toolkit to help small suppliers and large buyers alike.

“The business case for embracing the clean revolution is stronger than ever,” concludes Mr Kenber. “The low-carbon market is one of the best-performing sectors of the global economy, worth $4 trillion and growing. Average return on investment is over 30 per cent a year. Regardless of moral or political imperatives, decarbonisation is one of the best business strategies around.”