Published: February 22 2010, 09:20 AM | no comments
by Sonny Masero

Last week Jos Delbeke took charge of the new European Commission’s Directorate-General for Climate Action as Yvo de Boer planned his departure as head of the UNFCCC to become a global advisor for KPMG in July. Meanwhile, the US climate change legislation has also been facing a difficult time with three major companies announcing last week that they were withdrawing their support for the legislation in Congress. In the aftermath of the Copenhagen Conference and “Climategate,” it is a difficult time for international climate change politics.  Rather than providing the certainty of an international agreement -- which many of us crave -- we are left with the prospect of a year (or more) where low carbon investment decisions will continue to be difficult ones to make.

Perhaps it is worth remembering that the reasons for action on climate change are not just about avoiding a global average temperate increase beyond 2 degrees. There are more practical reasons for companies to act, which includes the forecasted increases in energy costs, or at the very least, continued price volatility. Concerns about energy supply security are also warranted as our reliance on electronic and electrical technologies requires successful improvements to the electricity grid and generation assets, which requires significant investment across Europe and around the world.

The business costs of water supply and waste disposal are also expected to increase as natural resources become increasingly scarce and legislation tightens. For some businesses, biodiversity is also critical to business success and this can be undermined by deforestation and habitat destruction. Therefore, the efficient use of natural resources will remain critical to competitiveness, despite the delay in reaching an international climate change agreement.

If as a company you do not already have an enterprise view of your natural resource use, then this is a fundamental requirement for successful business. The rapid realization by many enterprises that they need a carbon/sustainability management solution is indicative of the fact that companies are not waiting for politicians to resolve their national differences. Corporate sustainability leaders are well aware that they need to accurately meter and monitor their use of natural resources, and put in place an effective management plan to maintain an advantage over competitors.

These leaders also know that the climate change science will hold true and that sooner or later an international climate change agreement will be found to replace Kyoto, and that the later it comes the more stringent it will need to be to bring us back on course to limit temperatures at 2 degrees. This target for the maximum temperature increase has been acknowledged by both China and the US in the recently signed Copenhagen Accord, the two biggest emitters.

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Published: February 03 2010, 10:35 AM | 1 Comment(s)
by Sonny Masero

On January 24, 2010, The Times published a story highlighting the impact shortages in our water supplies may have on businesses.  The article precedes a report from the UN expected in a few weeks that will inform companies about future requirements to report on water use – “water footprinting” - similar to greenhouse gas emissions reporting.

I wrote a letter to the editor in response to the article, which was published on January 31, 2010, edited for length.  Following is the unedited version of my letter that I wanted to share with you. What do you think?  I welcome your thoughts in comments to this post. 

Dear Sir:

Your report (Now companies face a green squeeze on using water, January 24, 2010) rightly highlights the emerging issue of water footprinting compared to that of carbon but the response of global businesses to sustainability issues are less haphazard than you allow.

First, environmental responsibility as well as business continuity, stakeholder activity and regulatory demands means that corporate social responsibility activities are being influenced by a range of environmental indicators. These include carbon and water as well as waste and energy usage, and each carries particular reporting and management challenges.  For some years, we have seen businesses seeking to understand the global and local impacts of their operations and they are now working towards locating key facilities based on considerations such as energy security and water availability.

Second, effective world-wide monitoring and reporting is going to be critical to assessing businesses’ use of the earth’s resources. Real progress is being made on a global basis by initiatives such as the Carbon Disclosure Project - supported by many large companies - while at the corporate level, sustainability management platforms are starting to simplify firms’ monitoring of their environmental impacts across their operations.  Experts in this field believe these tools will eventually become as important as financial accounting, particularly as corporations will be required to manage the risks and communications issues around such fundamental issues.

The enterprise frameworks and reporting tools that address global sustainability challenges are becoming available and businesses are making use of them.

Yours faithfully
Sonny Masero, Vice President, CA

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