Archive for May 2011
Climate Change – is it the Ongoing Evolution of Earth?
May 30, 2011 | 
Author Many people throughout the world have been conditioned into believing the unproven theory that global warming is caused by mans’ industrial activities. However the opponents of this theory point to instances in the past when global warming, without the influence of man, did take place.
The scientific community agree that the earth is about 4.5 billion years old and during that time its accepted as a known scientific fact that it’s undergone at least 12, and possibly 14 major periods of climate change. In addition to this there have been numerous minor changes to the earth’s climate.
The information about pre-man climate changes has come from studying ice cores and from sophisticated scientific investigation involving many branches of science. However some of these minor changes have occurred within the life-time of man and have been recorded over time.
The existence of these major and minor periods of climate change is not in doubt; what is open to speculation and controversy are the causes.
On this, the Scaremongers remain totally silent: they are emphatic that mans’ industrial activity and the burning of fossil fuels is the cause of any climate change taking place at the moment, but would have to agree that industrial activity could not have caused the start of a period of climate change 5,000 years ago.
In 1991 the body of a man was found in the European Alps in the border regions of Austria and Italy. He was said to have died about 5,000 years ago whilst crossing the Alps. From this two facts can be determined: man at that time knew he could cross the Alps; secondly this feat was possible because of the absence of snow and ice at lower altitudes.
2800 years later occurred the first recorded historical event involving man crossing the Alps. That was Hannibal’s crossing of the Alps with an army, including elephants, to wage war on the Roman Empire. This event was clearly documented at the time and is today accepted as a historical fact.
When this event was taking place, the snowline of the Alps was estimated to be in the region of 1,800 to 2,000 meters above sea level. Until recently the Alpine snowline was approximately 1,500 meters above sea level. What this means is that in modern times the level above the sea at which snow falls and lies on the ground is about 300 to 500 meters lower than when Hannibal achieved his feat. So during the past 2200 years the earth’s temperature has fallen to enable snow and ice to settle at these lower altitudes. However in Hannibal’s time and the centuries earlier going back to 3,000 BCE the air temperature was considerably warmer that it is today.
From this scientists know that the world’s climate has changed over the past 5,000 years. So what’s caused this change?
The activities of Man? Unlikely.
The work of Nature or the Almighty? Probably.
Is there a definite answer? No.
Lets now look at more recent times and consider the recorded history of events that took place in London.
Between 1660 and 1820 is was quite a common occurrence for the river Thames to freeze over; not every year, but certainly enough for people at that time to make comments. Since the mid 19th century the Thames has rarely been frozen, certainly never in recent memory. So the question needs to be answered: what caused the warming of the air from 1820 onwards?
At the same period of time from 1660, the Great Barrier Reef in Australia was subject to stress caused by an event that lasted 20 years. Coral has characteristics not unlike that of trees. Rings in a piece of sliced coral tell the story of climatic events long ago. A piece of coral collected off the coast of northern Australia has recently been examined and it shows the effects of drought in the region. Lack of fresh water, and therefore the absences of nutrients, coming from the nearby rivers would affect the growth of the coral and would be noticed in examining the rings. The coral showed a period of about 20 years of severe drought in this region.
In the years since then the reef has made a full recovery, although it may be suffering now.
The ‘Yes’ case points to the decline in coral reefs as an example of global warming, but ignore the fact that Nature has the remarkable capacity to rejuvenate stressed coral.
The known history of the world has numerous events that took place long ago that couldn’t happen now:
1) The indigenous people of Australia came from SE Asia via a continuous land mass leading from the Malay peninsula, through Indonesia, New Guinea, and into northern Australia.
2) The native Indians of north America are thought to have entered the continent about 10,000 years ago via the land mass across the Bering Straits. That feat couldn’t be achieved today.
3) Likewise the original inhabitants of the UK are thought to have come from Europe via the land mass that connected mainland Europe to Britain. This is now covered by the English Channel.
From these events of long ago, its plain to see that sea levels rose covering once-accessible traffic routes.
And the most likely causes of the rise in sea levels – global warming causing polar ice-caps to melt. But what could have caused this? Well definitely not man’s industrial activity. So it must have been the action of Nature, or the Almighty.
That being the case, isn’t it more likely that if global warming is taking place today, it’s being caused by the same influence that caused the previous periods of climate change?
This is a look at the international controversy concerning the cause of climate change, and an attempt to put some balance into the argument.
DEFRA Carbon Plans and the Carbon Reduction Commitment
It seems that the British, like their acronyms. This seems to be especially true when it comes to the thorny problem of climate change. DECC absorbed DEFRA and BERR to put forward a more consolidated front, but however you look at that, the British are certainly blazing a trail within this arena and have passed what is effectively the first legally binding legislation with teeth.
The DEFRA carbon approach resulted in the Carbon Reduction Commitment, a child of the Climate Change Act of 2008. The British definitely swiftly made a move on this in order to meet carbon budgets on the program’s first years. The CRC energy saving program was designed out of the box and is indeed a very innovative way of contributing solutions for climate change.
Many observers worldwide have been impressed by the DEFRA carbon approach and by the speed with which the British government has worked to consolidate its position and to move beyond the traditional restraints of the European Union. Should their program be successful, it is likely to be copied in many different parts of the world.
The Carbon Reduction Commitment is designed to place a financial incentive on carbon emission reduction by, for the first time, establishing carbon as a commodity and fixing a price per ton. The government points out that this shall benefit those who are compelled to get involved and should not be taken as a burden.
Benefits given by the UK government to the participants of the DEFRA carbon scheme might reach to about $1 Billion by 2020. Revenues which will come from the scheme are neutral to the exchequer which is the UK’s version of our Treasury Department. Revenues will be recycled to participants in this way.
While the government is ready to encourage and provide financial incentives, in a sense at least, it is not afraid to wield a stick in addition to dangling the carrot. The only risk that DEFRA carbon scheme participants might face in the event of under-performance will be lowering its own reputation. A league table will be published for all to see and judge.
It is expected that approximately 20,000 organizations will participate in CRC in different initiatives, but out of this number, only 5,000 shall be required to participate actively through regular documentation and monitoring of carbon emissions and through purchasing allowances from the government.
The UK has taken the lead in the fight against global warming and climate change by introducing sweeping legislation which is designed to commence in April of 2010. The goal is to achieve carbon equivalent emissions reduction to at least 4MTCO2 every year in 10 years. Compared to a 1990 baseline, this is a reduction of about 26% of greenhouse gas emissions, yet represents only the start of a push to huge reductions by the year 2050.
Posted in Climate Change | 
Tags: Carbon Accounting, Commitment, DEFRA, Plans, Reduction | 
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The 100 Months Problem: Climate Change, Global Warming and CO2 Emissions
Conceived and promoted by a team of journalists and experts including Peter Myers, Dr. Victoria Johnson and Andrew Simms, the 100 months problem is the idea that in roughly 8 years, our current lifestyles will have taken the earth beyond a revocable point when it comes to global warming and climate change. The project is designed to give people a more systematic approach to the problem; the deadline gives an effective time-scale for the implementation of sustainable infrastructures, so that global warming skeptics cannot claim the movement to be lacking in substance.
Since its introduction, there have been many critics and many dissenters. Despite the program’s attempts to pin down the global warming problem, many are not convinced by the original premise; that, in a relatively short time span, our current CO2 emissions habits will have driven us to a point where climate change and global warming have spiraled out of our control. The problem, as has often been the case for global warming prevention activists, is that most skeptics still do not see the problem as something tangible. And even if they do, it is seen by so many critics as paling in comparison to economic concerns.
As a result, the 100 months project has been called hyperbolic and unfounded. But the importance of the 100 month deadline is not so much the validity of the claim, but the practical and pragmatic approach it grants us towards solving a number of problems at once; without a deadline, and without a potential ‘tipping point’, it would be difficult to justify a systematic approach to the problems of fossil fuel depletion, rising sea levels, and a volatile climate. It is certainly possible to argue that those problems are not real problems, or that perhaps those problems are less severe than environmentalists make out. But what skeptics cannot deny is that CO2 emissions are rising; the EIA reports show a steady annual rise since 1980.
The 100 months program, then, need not limit itself to environmental issues, even if its end goal falls under that sphere. Outside of the stringently environmental effects of CO2 emissions, there are economic effects; fossil fuels are a finite fuel source, and that – as we have seen – is likely to drive prices up. And that cannot be refuted as a natural cause; the U.S contributes to around 20% of CO2 emissions worldwide each year, and it occupies just 5% of the world population. That inconsistency in statistics can only be explained as a failure in lifestyle that has without doubt draining oil reserves quicker than is necessary.
The 100 months concept, then, is not just important for the environment. It gives a time scale for social reform, and – for economics as well as the environment – social reform is needed; our current habits and our current paradigm are not sustainable. To many, the global warming problem is very real indeed, and it is to those people as serious as the 100 months concept suggests. But it is linked to the equally troublesome economic problem, and the 100 month program – if we can subscribe to it, for pragmatic or ideological reasons – will curb that issue through a break from our dependence on fossil fuels.
Posted in Climate Change | Tags: Change, Climate, Emissions, Global, Months, Problem, warming | No Comments »
Mandatroy Emissions Reporting Update
Government is set a to consult on mandatory emissions reporting
Defra said the consultation would look at options “from voluntary through to mandatory reporting” and would last eight weeks. Under the 2008 Climate Change Act, the Government has to introduce mandatory reporting for listed companies by April 2012 or explain to Parliament why it is not doing so.
The Financial Times recently reported that ministers were set to “water down” the rules in an effort to cut down on red tape. It said the Government was considering whether to limit the system to large companies only. It is one of the pledges of the Coalition to cut the regulatory burden on business.
Defra said it has been speaking to “a wide range of interested groups” on the issue, including the Department of Energy and Climate Change, Business, Innovation and Skills, investors, NGOs and business organisations, such as the Aldersgate Group.
“Small businesses are acutely sensitive to regulation and a system of carbon reporting would need to be found for SMEs that uses existing records, such as utility bills, to calculate a firm’s carbon emissions to keep the administrative burden to a minimum,” said Francis Wood, environmental and climate policy advisor at the FSB.
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Posted in Carbon accounting, carbon emissions, Carbon footprint, Carbon management, carbon reduction, Carbon Reduction Commitment, Climate Change, CO2 | Tags: carbon accounting, carbon emissions, Change, Climate, CO2, co2 emissions, co2 reporting, emissions reporting, ENVIRONMENTAL, Footprint, mandatory emissions reporting | 1 Comment »
Corporate Social Responsibility in Textile Industry
The concept of social responsibility is a fairly recent one in the business world. Awareness about the social responsibility of business organizations is rapidly on the rise and firms are also accepting this concept. The textile industry is no exception. Textile producing and trading firms are also realizing their responsibility towards the society and the environment. This article aims at analyzing the concept of social responsibility and the common ways in which textile firms try to fulfill it.
What is social responsibility?
Social responsibility is “an organization’s obligation to maximize its positive impact and minimize its negative impact on the societyâ€. In other words, it is “the concept that businesses should be actively concerned with the welfare of the society at largeâ€.
The concept of social responsibility is applicable to individuals and governments as well as organizations. The social responsibility of an organization is referred to as ‘corporate social responsibility’.
Social responsibility can be broadly divided into two parts: human responsibility and environmental responsibility.
Human responsibility refers to the responsibility of the organization towards the various parties associated with it, which are known as ‘stakeholders’ in business parlance. These parties include employees, shareholders, the government, customers, investors, suppliers, competitors and the society at large.
Environmental responsibility refers to the organization’s responsibility towards environment protection.
The concept of social responsibility holds that an organization should work in a manner in which the interests of the stakeholders are protected or, at the very least, they are not adversely affected. It holds that the organization should work in an ethical manner and work in the best interests of the various parties associated with it.
The realm of social responsibility extends beyond the legal responsibilities of an organization. It is voluntarily fulfilled by the organization.
The concept of corporate social responsibility has been criticized by certain experts, who believe that it is a cynical and selfish idea. They are of the opinion that corporates undertake projects for social welfare only because of the increase in reputation that they would get due to them.
Social responsibility in the textile industry
Like the firms in other industries, textiles firms are also realizing their responsibility towards the various parties associated with them and the environment. However, the ways by which different organizations choose to fulfill their social responsibility might be different.
The ways in which a textile firm can fulfill its responsibility towards various parties are similar to those of firms in other industries, as is evident from the points mentioned below:
Copyright © 2007
Posted in CSR | Tags: Corporate, Corporate social responsibility, CSR, Industry, Responsibility, Social, Textile | No Comments »
Carbon Offsetting: The Best Way to Maintain Equilibrium in Our Ecosystem
We all are constantly aware and alarmed by the fatal consequences of global warming. This has resulted in air and water to become warmer and warmer and faster melting of glaciers by each passing minute. This normally reflects the sunlight back into space which in turn compounds the global warming problem. We knowingly or unknowingly aggravate the ever growing problem. We use electricity, vehicle and plastics everyday which are the main carbon producers that households contribute to global warming.
Global warming is a burning issue globally. Today new car, used cars and trucks equally burn gasoline to get on with their regular work and gasoline burning is a major resource of carbon dioxide emissions everywhere. Carbon Dioxide is thus emitted into the environment. Carbon Dioxide has been scientifically linked to global climate change and warming. Therefore, complete awareness among people is required to combat this disastrous issue. People must be motivated and enthusiastic about reduction of this gas through whatever ways possible to maintain equilibrium in the eco system.
Everyday while driving a car, lighting your residence and office, transporting goods and also using a computer, we use energy and produce greenhouse gas emissions like carbon dioxide that have a major consequence on the climate change. You will inevitably have to pay hugely for your emissions; thus by employing carbon offsets, you can make an equivalent greenhouse gas saving. By taking a few things into consideration too, you can control carbon dioxide emission. You must switch off the light when not in use, must start a habit of walking or cycling which will in turn reduce the use of automobiles.
There are various kinds of project that will help to reduce carbon emissions. The projects include renewable Energy, Hydro Power, solar power, agricultural residues and wind power etc. Each project is very helpful and plays a vital role in reductions of CO2 that would not have happened otherwise. If you are engaged in a business that transmits CO2, you should start by reducing your consumption and your carbon footprint now. Your small steps can make a huge difference. Business carbon offsetting is making a positive and real statement to your employees, customers and shareholders. Just like you they all are also affected by climate change and will be more attracted, and devoted to businesses that are committed towards caring for the environment. Green companies are more efficient and more beneficial than their rivals. Many of the most successful ones are now familiar with the clear business benefits of addressing environmental issues.
Posted in Carbon accounting | Tags: Best, Carbon Accounting, Ecosystem, Equilibrium, Maintain, offsetting | No Comments »
Climate Change Solution: For A Better and Fruitful Tomorrow
The drastic climate change caused by global warming has constituted to be one of the greatest challenges of the 21st Century. The enormity of global warming can be daunting and disastrous. This has necessitated the engagement and contribution of all the sections of the society, whether local or global. Each one must come forward, join hands and take initiative to combat this grave issue. The question is frequently raised as to “What can one person, or even one nation, do to slow and reverse climate change?” A single contribution towards climate control can make a huge difference. In order to avoid the fatal consequences of global warming, it becomes imperative to generate and support initiatives contributing towards achieving a low carbon economy and clean technology future.
Some personal changes in the lifestyles can help in reducing greenhouse gas emissions to safer levels and can reduce the carbon impact. A crucial step can taken towards climate change is eliminating the burning of coal, oil and, eventually, natural gas. This can prove to an exemplary climate change solution. But, this is the most intimidating challenge since richer nations literally eat, wear, work, play and even sleep on the products made from such fossilized sunshine. And citizens of developing nations are not ready to make a shift from their normal comforts, which are largely due to the energy stored in such fuels.
One must keep on inventing and searching for modes to reduce the fatal effects of climate change. One way to curtail transportation fuel is to move closer to work, use mass transit, or switch to walking, cycling or some other mode of transport that does not require anything other than human energy. This is immensely helpful to protect our home from any disastrous aftermaths. A potentially simpler and most effective way is just being efficient and a little bit more careful. Many of us consciously or unconsciously are profligate wasters of energy, whether by speeding in a gas-guzzling sport-utility vehicle or leaving the lights on when not in a room. By being a little more conscious, we can prove worthy of living as beings of this world and fulfilling our duties.
Another mode is by purchasing carbon credits; you can easily compensate your carbon footprints. (Carbon footprint is a measure of the impact of our activities on the environment, and in particular on climate change). You can also organize an annual Climate Change Solutions Expo. As the saying goes “A stitch in time saves nine”. In the same way, if you take a little initiative now towards your home and the environment, it would turn out to be fruitful and can save immense effort and damages later.
Posted in Climate Change | Tags: Better, Change, Climate, Fruitful, Solution, Tomorrow | No Comments »
London | Glasgow | Edinburgh | UK | CRC Energy Efficiency Scheme
We are now well on the road to the end of the very first year of the CRC.
We’ve had the scare stories, the organisations failing to register, or less organisations registering than had been very first thought. Early estimates from the Government suggested 5000 plus organisations would be full participants with a further 20,000 as information disclosures. We’ve had just over 3,700 full participants register, what does this tell us?
For me, based on my study, it tells me that a good deal of organisations didn’t realize what they needed to do. For example, a vehicle dealership, an example Defra used in their literature, if that dealership was a single franchise, SEAT as an example, then if a single SEAT dealer anywhere else within the UK had a half hour meter then ALL SEAT dealerships and SEAT organizations were in under the banner of SEAT, who had the responsibility of collating this information. That’s nice and basic, until you then take a look at if that exact same dealership had say SEAT and VW at the exact same premises, they’re out? Add to that the ability to register independently so the SEAT brand did not have to account for everything that traded under its name . . . confused . . . therein lies the problem!
At least the Con/Dem co-alition government has pushed back the full implementation of phase 1 of the CRC by 12 months, the exact same for Phase 2.They're also looking at making the scheme simpler, firstly by making it a Tax, no payments from the pot for those that decrease emissions the most, Great or Bad?
For me it’s a bit of very good and bad, organisations no longer being rewarded for decreasing emissions will must discover some other motivation to decrease emissions! The very good side is that it is giving these organisation much more time to get to grips with the scheme, however, as experience has shown, a good deal of organisations left it to the last minute before registering for the CRC, will they do the exact same once more?
Initially Phase 1 reporting is primarily about Scope 1 & 2 emissions, Scope 1 being based on energy you produce, as an example if you had a wind turbine and selling electricity back to the grid, Scope 2 is for energy you purchase.
Even so Phase 2 of the CRC is interesting, as it suggests that Scope 3 emissions will be included in a company’s declaration, a very good way of introducing mandatory emissions reporting for all via the back door. Scope 3 covers everything from Travel to Suppliers.
If we take a look at suppliers for a large organisation, this could easily be in the thousands, a local authority I recently met with, have in excess of 5000 suppliers, under phase 2 they will must liaise with all 5000, collate the emissions data for those 5000 and submit under the local authorities umbrella.
This will be an administrative nightmare for the unprepared, both the supplier and the large organisation. This will mean that for those who tender for work from larger organisations it will no longer be just a tick box exercise for environmental policy, such as ISO14001, it will be a detailed report on emissions and those not able to submit such a report, will ultimately, not win any business.
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Posted in CRC, CRC Energy Efficiency Scheme, Edinburgh CRC, Glasgow CRC, London CRC, UK CRC | Tags: crc edinburgh, crc glasgow, crc london, Edinburgh CRC, Glasgow CRC, London CRC | No Comments »
Blue Ocean Strategy
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive advantage and claimed that Porter’s model was flawed because differentiation can be a means for firms to achieve low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that firms need to create ‘Sensational Strategies’ which is about playing a different game.
A similar strategy proposed by W. Chan Kim and Renée Mauborgne of INSEAD, is the ‘Blue Ocean Strategy’, which promotes creating ‘Blue Ocean’ or new market space rather than competing in an existing industry. It is in many ways similar to the ideas presented in Funky Business. For example, the ‘competing factors’ of the Blue Ocean Strategy are similar to the definition of ‘finite and infinite dimensions’ defined in Funky Business. Kim and Mauborgne claim that their strategy makes sense where supply exceeds demand. Once a blue ocean is created, it eventually turns ‘red’ over a period of time and ceases to guarantee success.
Red Ocean is the known market place (or industries), for which industry boundaries are defined and accepted, and the competitive rules of the game are known. Companies, here, try to outperform their rivals to grab a greater share of product or service demand. Profits and growth are reduced as the market space gets crowded. Products become commodities or niche with cutthroat competition turning the ocean red. Hence, the term red ocean gets coined. Blue oceans, in contrast, denote a non-existent industry or an unknown market space, where competition and demand is created rather than fought over. Competition, here, is irrelevant because the rules of the market are not set and there is ample opportunity for rapid growth and profitability. However, the corner-stone of Blue Ocean Strategy is ‘Value Innovation’, either in product, service or delivery, which creates value (not found in the current market) simultaneously for the buyer and the company.
I needed to explain the concept of ‘Blue Ocean Strategy’ in my class and was in search of some live examples that would demonstrate the above differences. With some search on the internet, I found many sites that explained the concept in detail but did not have examples. However, in the process I landed up in a website named www.ibscdc.org, where I got what I was looking for. The site contained quite a few case studies that demonstrated the concept with real life business examples. IBSCDC offered case studies like – Utility Computing: IBM On-demand, which demonstrated the introduction of a new concept called ‘utility computing’ in the IT industry by IBM; Toyota’s hybrid vehicles which helped in creation of a new market space for the company in the US; the case study of Tivo which pioneered the concept of interactive television and gave rise to a whole new industry.
However, the web site was easy to browse – across pages, with clear categorization of the case studies and tabs that took the user to the list of related case studies that the user needs. Moreover, a click on the title of the case study presented a well written abstract and other details needed by the user. It offers a huge collection of case studies related to various topics like business strategy, entrepreneurship, finance, economics, operations management, corporate governance, HR, organizational behavior, marketing, international trade, CSR, etc.
source: http://www.ibscdc.org/blue-ocean-strategy-case-studies.asp
Carbon Accounting in India
A carbon footprint measures the total greenhouse gas emissions caused directly and indirectly by an individual, event, organization or product. Carbon accounting (also called GHG accounting) does assess the carbon footprint to help organizations adopt strategies aimed at fighting climate change. As with financial accounting and reporting, generally accepted carbon accounting principles are intended to underpin and guide carbon accounting and reporting to ensure that the reported information represents a faithful, true, and fair account of a company’s carbon emissions.
Business community in India has started seeing value in undertaking carbon accounting and reporting it in public forums. Such forums include Carbon Disclosure Project (CDP) and company’s Sustainable Development Reports. The number of companies which responded the CDP’s information request on climate change strategy, risk and opportunities assessment and carbon accounting was answered by 37 companies in 2007. The number increased to 51 in 2008 and dropped marginally to 44 in 2009, partially explained by the global financial crisis.
There is still long way to go for Indian businesses on the path of carbon accounting and disclosures. Even in the top 200 firms in India (by market capitalization), the response rate in last few years has steadily increased and reached 20%, a rather dismal performance compared to developed markets.
There are a few sectors like the software and services which are clear leaders in being carbon-aware, accounting carbon emissions from their emissions, taking efforts in reducing it and communicating it to the stakeholders. Part of this can be explained given the fact that these companies are most export dependent and draw majority of their clientele and revenues from markets of US and EU. Clear laggards in efforts in this direction are companies in the field of banking & diversified financials, capital goods, real estate and retail. Very few companies in these sectors have responded to the CDP information request and have accounted for their carbon emissions. Part of the lack of drive can be explained by significant domestic base, relative inelasticity of demand to seemingly peripheral factors and relative less thought given to corporate social responsibility.
In the following discussion, we summarize the key issues that would become increasing relevant to Indian organizations and drive thorough and wide spread carbon accounting, reduction and disclosure efforts.
Upcoming regulations
Industries such as steel and textiles could soon face a carbon entry barrier, one way or the other, while exporting goods to markets where the country has enacted regulations stipulating guidelines for the domestic industry. The domestic industry, to maintain its competitiveness would ensure that less efficient (and therefore more carbon intensive) products entering into the economy pay for the difference in carbon levels by ‘carbon tax’ or equivalent.
Though these regulations may take some time to be widely implemented, it makes business sense for companies in select sectors to be prepared with a clear understanding of where they stand with respect to competition from developed countries and other developing countries such as China, Brazil or Vietnam.
Developing countries such as India, Brazil, China and South Africa (BASIC) are facing increasing pressure from the developed world to monitor and report their GHG emissions. This is due to the fact that the growth in GHG emissions worldwide in foreseeable future will come from these economies, thanks to their contribution to world economy and increasingly so. In order to make sure that the developed countries continue to finance emission reduction projects, energy efficiency and other technology development, the BASIC countries may have to undertake monitoring, reporting and verification of their national GHG inventories. When such an mechanism becomes a part of internationally negotiated agreement, carbon accounting and reporting would become statutory requirement like the annual financial reporting and auditing.
Investor requirements
Having realized the crucial importance of good disclosure and corporate governance practices, investors across the globe are demanding companies to disclose their climate change strategies, perceived risks and opportunities created by climate change, contribution to climate change and efforts taken to minimize corporate carbon footprint. To reduce the transaction costs of responding to individual investors in unique format and vice-versa, Carbon Disclosure Project (CDP) has been created as a not-for-profit non-governmental organization. Active since 2006, in 2010 CDP sent out information request to more than 3500 organizations across sectors and scales around the globe. In India, the information is sought from top 200 companies by market capitalization. The responses from companies in relation to their climate change strategies, perceived risks and opportunities and carbon footprint of their operations will be analyzed, compiled in a report and sent to more than 530 investors across globe. Investors also become aware if the organization chooses not to respond to such an information request or decline to participate. The list of investors who get seek such information from corporations through CDP includes Goldman Sachs, Bank of America, JP Morgan Asset Management among others.
Such investor-facing communication should be taken seriously taken by companies and pursued pro-actively even if organization does not receive information request.
Basis for Energy efficiency
Carbon emission is a direct indicator of the energy consumption in a process or an activity. By mapping carbon footprint in detail, an organization can identify ‘emission hotspots’, the energy intensive processes and take actions to reduce the carbon footprint/energy consumption per unit product/service produced/delivered. This can directly lead to cost savings and thus addition to bottom-line, the ultimate test for evaluating success or failure of an activity/intervention.
Impact the national policy
Though the carbon accounting and disclosure efforts of an individual company may not have a direct bearing on the climate policy decisions taken by the Indian government, a wide participation by India Inc. in activities in the area of carbon accounting, emission reductions and reporting can send a strong signal that Indian industry is proactively engaging in the climate change dialogue and response process. Such activities will contribute towards political process through analysis and reporting. For example – the release of CDP India 2009 report coincided with landmark session in parliament where the environmental Minister Mr. Jairam Ramesh announced that India will reduce its carbon intensity levels by 20-25% on its 2005 over the next 11 years. The Economic Times carried an article quoting the CDP India report and saying that India Inc. is well positioned to achieve the 20-25% emission intensity reduction targets given that companies are already voluntarily disclosing their carbon footprints and undertaking measures to reduce them.
It is evident that voluntary initiatives such as the CDP or company’s sustainability reports highlighting their carbon emissions, reduction measures and targets are influencing policy decisions and in future will play a significant role in India’s climate change strategy and policy.