The Centre for Climate Change Economics and Policy has established a three-year project to analyse the role that can be played by companies in delivering...


Over the past ten years we have seen companies take action to reduce their own greenhouse gas emissions and, in a growing number of cases, seek to influence the performance of their suppliers and customers. There have been various drivers: high energy prices, government legislation, customer and client demand, reputation benefits, investor pressure and NGO campaigns.


There have also been a variety of internal factors at play: the motivations and interests of CEOs and corporate leaders, the learning and capacity-building that has resulted from companies establishing environmental management systems, the momentum created by exploiting low hanging fruit, and the constant pressure for efficiency and business improvements.


Against a backdrop of tough economic conditions and a renewed debate about the role of the state in the delivery of public policy goals, one of the central questions that must to be addressed is whether and how companies can contribute to the transition to a low carbon economy.


A lot to offer


More specifically, we need to understand whether and how the skills, competencies and influence of companies can be harnessed to deliver the dramatic reductions in greenhouse gas emissions that are needed to avert the most significant consequences of climate change.


The Economics and Social Research Councils centre for climate change economics and policy project Climate Change Governance Beyond the State has been established to analyse the factors external and internal to the organisation that have influenced corporate climate change performance. It will assess the extent to which these have moved companies beyond the actions that are required by legislation or that would be justified in cost-benefit terms.


Based on this analysis, the project will make proposals on the public policy frameworks that need to be in place to facilitate or accelerate these changes and to make the non-state interventions effective.


Research results


While the project is at an early stage, a number of important findings have already emerged from the research.


• Contrary to the common perception that the benefits of focusing on energy efficiency decline rapidly after a few years, many companies have achieved consistent year-on-year improvements in efficiency over 10 years or more. This suggests that organisational learning and organisational philosophies of continual improvement can create real long-term benefits.
• Despite efficiency improvements, most companies have seen their greenhouse gas emissions rise substantially. This is not simply a matter of business growth but also reflects changing business models and a transfer of greenhouse gas emissions from other sources. For example, supermarket home deliveries have resulted in an increase in their reported transport-related emissions but the overall effect on greenhouse gas emissions may be negative because of the avoided emissions from customers travelling to and from supermarkets.
• There is growing focus on emissions in the supply chain but progress has been slow for two reasons (a) difficulties in robustly quantifying emissions, (b) a focus on the supply chain requires different management skills (and involves different parts of the business) to those required for addressing direct (operational) emissions.
• Regulation is critically important but as much for its signalling effects as for any specific obligations it creates for companies. For example, companies across the board, and not just those in energy intensive sectors, saw the EU emissions trading scheme as a signal that governments were prepared to take meaningful and credible action on climate change.


Dr Rory Sullivan is a senior research fellow at the University of Leeds, strategic adviser to Ethix Sri Advisers and a member of Ethical Corporations editorial advisory board. Prof Andy Gouldson is director of the Economics and Social Research Councils centre for climate change economics and policy at the University of Leeds. Sullivan and Gouldson are leading Climate Change Governance Beyond the State project.



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