- Carbon tax is definitely happening in 2016. Businesses need to understand which of their activities will be taxed, the scale of the tax, and finally how they can reduce the financial exposure to the tax. Companies also need to understand and prepare for how taxation may impact them indirectly, e.g. escalated electricity tariffs. A carbon measurement exercise will quantify the financial risk and identify where liability needs to be reduced.
- Winning and keeping clients may depend on it. Consumer and B2B preferences are changing. As a result we are seeing environmental metrics becoming increasingly prevalent in tender responses and supplier vetting processes.
- Carbon is costly. It comes in the form of fuel, electricity and transport to name but a few sources. Managing carbon in your business allows you to identify these costs, reduce them and improve your bottom line.
- Carbon reduction commitments produce operational efficiencies. This encourages companies to work smarter; do more with less.
- Reputational risk. We live in an information age where information is relentlessly sought after and shared. Businesses need to be seen as proactively doing the right thing with regards to environmental issues.
- Investors require it. Gone are the days when investors make decisions on balance sheets alone. Investors understand that the 21st century brings challenges we haven’t seen before – a new set of risks and a new set of opportunities. Managing these risks and opportunities requires transparent, triple bottom line reporting.
- Stimulates innovation in product development. Committing to reduce your carbon footprint or the carbon footprint of your products and services stimulates innovation in products and technology. GE’s success story of their innovations to reduce the environmental impacts of their lighting illustrates how valuable this driver can be.
- To remain competitive in the marketplace. More and more policy interventions and market drivers for mitigation are changing the business landscape. If these are not embraced, businesses will be left behind.
- Staff engagement. Research shows that understanding and managing environmental impacts within the workplace is good for staff morale, retention and skills attraction. Employees are more conscientious than you might think.
- Global warming and climate change is a global problem. As part of the global community we both contribute to and are directly impacted by global warming. The scale of the problem demands that effective action can only be achieved by international cooperation and by everyone. Silo efforts will not be enough.
With all the drivers presented above it’s a no brainer that companies should be managing their environmental impacts. But management cannot be effective when void of measurement. Your starting block should be to take stock of your impacts so that you can have a yardstick from which to track change going forward.