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Best Practices For Carbon Management

Date: 12 February 2010

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21 pages, 13 figures

EXECUTIVE SUMMARY

Economy-wide emissions targets set under the Kyoto Protocol have existed for decades. Greenhouse gas reporting regimes like the EU Emissions Trading Scheme have existed for over 5 years. Back in 2007, hundreds of CEOs launched a frenzy of carbon footprinting projects. Despite this long timeline, very few examples exist of firms with carbon management strategies that actually reduce CO2 emissions. This report, based on interviews with 33 industry experts, explains why firms are floundering with carbon management and putting the future of the business at risk due to flawed governance and strained business processes. Firms will need to implement a low carbon business transformation plan to fix the governance blackholes, effectively design a carbon strategy, coordinate business process change and launch a technology platform for world-class carbon accounting. Some firms already harvest the benefits of carbon management and carbon accounting. Examples include BAE Systems, BHP Billiton, BP, Cisco, Dow Chemical Company, HP, Proctor & Gamble, SAP and Wal-Mart.

TABLE OF CONTENTS

FIRMS FLOUNDER WITH WEAK CARBON MANAGEMENT
Deadlines For High Quality Carbon Management Loom On The Horizon
Flawed Sustainability Governance Locks Carbon Management In The Past
Dumping Change Programmes On The CSR Director Is Not The Solution
Weak Authority Torpedoes Business Processes Transformation
Carbon Management Worst Practices Put Future Business At Risk

CEOS NEED A LOW CARBON BUSINESS TRANSFORMATION PLAN
1) Fix The Governance Blackhole To Craft The Right Carbon Strategy
2) Design A Carbon Strategy For Future Regulatory and Market Trends
3) Co-ordinate Business Process Changes For Carbon Reduction
4) Install And Integrate Technology To Enable Tracking And Targeting

LEADING FIRMS HARVEST CARBON MANAGEMENT BENEFITS
Best Practice Carbon Management Opens Up Revenue Opportunities
Strong Governance Of Carbon Initiatives Mitigates Current & Future Risks
Carbon Reduction Plans Translate Into Deep Energy Cost Savings

TABLE OF FIGURES

Figure 1. Low Quality Carbon Management Already Poses A Material Risk
Figure 2.
Firms Face A 2-3 Year Timeframe To Implement Carbon Management
Figure 3.
Compliance, Competitive Pressure & Cost Reduction Drive CO2 Plans
Figure 4.
Flawed Sustainability Governance Stalls Carbon Reductions
Figure 5.
Energy, Finance & Facilities Processes Top The List For Transformation
Figure 6.
Implement A Management Framework For Carbon To Cut Emissions
Figure 7.
Board-Level Involvement Tops Key Management Initiatives
Figure 8.
Appoint A Chief Sustainability Officer To Fix The Governance Deficit
Figure 9.
Bridge From 2010 To 2050 With Three Phases Of Carbon Management
Figure 10.
Select The Correct Type Of CO2-Driven Process Change For Each Function
Figure 11.
Do Not Confuse The CSO Role With Colleagues In CSR, Energy And EH&S
Figure 12.
Experts Rank Energy And Carbon Data Consolidation As The Top Priority
Figure 13.
Upgrade From Energy Databases To Integrated Carbon Management Systems

RELATED RESEARCH

Who Should Be The Chief Sustainability Officer?
Green Quadrant: Carbon Management Software
 

COMPANIES MENTIONED

1E, Actaris, Add Energy, AECOM, Air France-KLM, Alcoa, Aldi, Alliance Boots, AMEE, ArcelorMittal, BAE Systems, Better Place, BHP Billiton, BP, British Airways, Bureau Veritas, CA, Carbon Disclosure Project, CarbonSystems, CarbonLow, Carrefour, CH2M Hill, Cisco, Costco, Deutsche Telekom, Diageo, Dow Chemical Company, DNV, e3 Solutions, Elster, Environ, EQ2, Ernst and Young, Eurostar, Future121, Google, Greener Applications, Greenstone Carbon Management, GSK, Hara, Hewlett-Packard, ICF International, IHS, Intel, KPMG, Kroger, Landis and Gyr, Locus Technologies, Microsoft, National Grid, Nestlé, Nor-man Broadbent, Philips, PhelpsDodge, Prima Consulting, Proctor & Gamble, Raytheon, Safe-way, SAIC, SAP, Scott Wilson, Shaw Group, Starbucks, Target, Telefonica O2, Tesco, TetraPak, The Carbon Trust, Timberland, Tririga, Utilyx, Verisae, Wal-Mart, WSP