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(originally published by Booz & Company)


When Addressing Climate Change Is Good Business

Consumer education is another important element. Whirlpool, which led the industry in introducing energy-efficient appliances, educated consumers by educating the retailers. It also convinced Consumer Reports to include energy efficiency in the rankings of appliances, and worked closely with the Sierra Club, the Natural Resources Defense Council, and the Alliance to Save Energy in a successful push for legislation to give tax credits for efficient appliances.

Investors have become increasingly interested in climate change, as evidenced by the mounting number of shareholder resolutions and direct requests from investor groups. Recognizing this, Exelon Corporation, the largest nuclear operator in the U.S., added a global climate change section to its 10-K for the first time in 2004.

Time and again, executives who participated in the study declared that the question was not whether they should take action on climate change, but when. David Bresch, head of the atmospheric perils group for Swiss Re, says: “You should always remain one step ahead of the competition. But if you are two steps ahead, you lose the crowd. The ideal is for you to be the leader of the pack and [have] everyone pulling in the same direction.” At the same time, Eileen Claussen, president of the Pew Center on Global Climate Change, warns that laggards are at risk: “There will be winners and losers,” she notes. “Prudent steps taken now to address climate change can improve a company’s competitive position relative to its peers and earn it a seat at the table to influence climate policy.”

Author Profile:

Suzanne Charlé ([email protected]) is a journalist based in New York City.
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  1. Jeffrey Ball, “In Climate Controversy, Industry Cedes Ground,” Wall Street Journal, January 23, 2007: Related to the release of the Pew report, the WSJ reviews companies pushing for a mandatory emissions limit and examines the battle brewing between Big Oil and Detroit. Click here (subscription required).
  2. Daniel Gabaldon, Tom Hansson, Eric Spiegel, and Joseph Van den Berg, “The Next Wave of Generation Investment,” Booz Allen Hamilton white paper, May 2006: In the course of analyzing how utilities can most effectively invest in new generation capacity, the authors highlight how the industry should get in front of GHG regulation rather than waiting for the ax to fall. PDF download.
  3. Andrew Hoffman, “Getting Ahead of the Curve: Corporate Strategies That Address Climate Change,” Pew Center on Global Climate Change, October 2006: This survival guide to the carbon-constrained marketplace examines the experiences and best practices of 31 large corporations. It includes 12 in-depth case studies. Click here.
  4. Michael Margolick and Doug Russell, “Corporate Greenhouse Gas Reduction Targets,” Pew Center on Global Climate Change, November 2001: Report on the ways companies have set targets to reduce GHG emissions and their success at achieving their goals in climate change. PDF Download.
  5. Swiss Re, “Becoming Greenhouse Neutral”: How the insurer plans to achieve its goal. Click here.
  6. U.S. Climate Action Partnership, “A Call for Action,” January 22, 2007: The heads of 10 corporations and four nonprofits make recommendations for legislation to “slow, stop, and reverse the growth of greenhouse gas emissions.” PDF Download.
  7. Whirlpool Corporation, “Environmental Stewardship Helps Consumers, Communities, and Our Global Business”: How the appliance maker has worked to lower GHG emissions. Click here. 
  8. World Resources Institute/World Business Council for Sustainable Development, "Corporate Accounting and Reporting Standard”: This revised edition of the Corporate Standard helps companies identify, calculate, and report GHG emissions. Published in 2001, it has become the international standard for creating a corporate GHG inventory. Click here.
  9. Web site: works with businesses, nonprofits, congregations, and event planners to reduce carbon dioxide emissions through offsets, through which companies help pay to reduce emissions in another location. The group provides a carbon calculator that estimates companies’ carbon footprints. Click here.
  10. Chicago Climate Exchange Web site: North America’s first voluntary GHG reduction and trading system. Click here.
  11. Duke Energy Web site: How the utility is working to reduce GHG emissions. Click here.
  12. Erb Institute for Global Sustainable Enterprise at the University of Michigan Web site: Organization offering professional education, public outreach, and scientific scholarship supportive of the transition to sustainability. Click here.
  13. Natural Resources Defense Council Web site: In-depth examination of global-warming policy and its ramifications. Click here. 
  14. Pew Center on Global Climate Change Web site: Includes the report on corporate best practices. Click here.
  15. Shell’s Environment and Society Web site: How one energy giant is dealing with the GHG problem. Click here.
  16. U.S. Climate Action Partnership Web site: Consortium of businesses and environmental organizations working together to address global warming. Click here.
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