But not every energy company would be hurt. BP, for example, could benefit because it is the world’s largest manufacturer of solar-power devices and its portfolio is heavily weighted toward natural gas, which has the lowest greenhouse gas content among fossil fuels.
Corporate executives have a critical role to play in planning now for growing public concern about global warming. CEOs in every industry need to evaluate the impact that strict global warming regulations would have on their business performance, and should make plans to minimize the damage, or even to profit from the winds of public opinion. But before companies can have the confidence to make strategic bets on cleaner energy, governments must act. Even basic regulatory building blocks, like common definitions for carbon credits or clean electricity certificates, are not yet in place, let alone the financing or long-term incentives that companies need to ensure that environmentally friendly business investments achieve an acceptable return.
The widely broadcast dramatic satellite photos of Antarctica’s Larsen B ice shelf disappearing into the sea should be a wake-up call that an economic shock due to global warming is not fantasy. It doesn’t matter whether it’s getting hotter on Earth; CEOs need to plan as if it is.
Robert Lukefahr, [email protected]
Robert Lukefahr is a vice president with Booz Allen Hamilton in Houston. He has extensive experience in helping clients in energy and other industries with corporate growth strategies and long-term strategic plans.
Tim Donohue, [email protected]
Tim Donohue is a principal with Booz Allen Hamilton in Houston. He focuses on corporate and business unit strategies for energy companies.