Global brands look to cut carbon emissions contributions

kristy SRI/ESG News

Global brands look to cut carbon emissions contributions

Image: CO2

by Juliette Terzieff, Senior Director of Communications

Carbon neutrality and carbon footprint reductions are two areas where companies are exploring ways to make contributions towards protecting the environment. The approaches afford companies the flexibility to tailor efforts to meet a variety of needs specific to their operating models.

To reduce carbon footprints, some companies have employed green energy such as solar power and more energy efficient tools such as lighting in their buildings, both corporate and manufacturing. Corporations like Intel have reduced water usage and recycled waste, changed their vehicle fleets to hybrids or found new ways to package and ship their products, all in the name of being green. Such changes enhance companies? standing with consumers and stakeholders alike, while contributing to a cleaner future.

Carbon neutrality is a way for companies to help in the reduction of carbon worldwide by investing in companies whose job it is to create carbon reduction. The process involves investment in “forest protection, reforestation and the destruction of industrial gases.” While such investments lead companies to claim carbon neutrality and have support among most stakeholders, the investors may still be pumping millions of metric tons of carbon into the atmosphere annually. While investing in carbon credit projects is certainly a contribution and can help developing countries avoid gross environmental degradation as they seek to compete on the world stage, some stakeholders want to see more action within the companies? own business practices to complement the effort.

The World Wildlife Fund (WWF) began its corporate carbon cutting scheme in 1999, challenging over 2 dozen of the world?s biggest companies to take part?by 2011 participants had avoided or cut over 100 million tons of CO2. Ecofys, the analyst firm reviewing the companies’ carbon footprints, “estimates overall emissions savings from direct operations, indirect sources and the supply chain since 1999 could exceed 350 million tons.” Companies participating in WWF’s Climate Savers program include major global brands like Coca-Cola, HP, Sony, IBM and Nike, although the latter recently admitted “its emissions rose substantially last year following a boost in sales.”

Carbon reduction could be cut even further, said WWF, “claiming that if other major corporations followed the same path in the 16 business sectors where the program is currently active, between 500 and 1,000 million tons of emissions could be avoided annually in 2020.”

According to WWF, cuts at this level would bridge the gap “between worldwide carbon reduction pledges and the decreases needed to keep global temperature rise to two degrees, which most scientists agree is crucial to avoiding the worst effects of climate change.”

“The leadership shown by Climate Savers confirms that companies in diverse sectors can do good business and take a bite out of climate change,” said Alexander Quarles van Ufford, senior partnerships manager at WWF International. “Resource efficiency and the goal of a low-carbon economy have to become part of the corporate DNA, particularly given high fuel and commodity prices.”

“Greater voluntary efforts by industry are possible and essential. But the size of the task means it cannot be accomplished solely by voluntary business action,” he said. “Governments have to strengthen the international policy framework to mandate deeper emission reductions.”

Nike decided to change how it ships cargo in 2003, by ocean container ship instead of air. In 2009 alone, the practice saved the company $8 million giving a company goal to reduce carbon emissions from transportation by 30 percent by 2020.

Levi’s cut its carbon emissions by 60 percent by electing intermodal transport?trains?over long distance trucks. Baxter, a medical supply company also chose rail over road and cut its “carbon emissions by 14,000 metric tons” between 2005 and 2010.

Retail chain giant Wal-Mart chose direct shipment and eliminated one stop in the delivery process, working with Minute Maid to have its Simply Orange Juice delivered directly to Wal-Mart’s distribution centers, thereby avoiding Minute Maid’s own distribution centers. Not only did it cut “CO2 emissions by 1,500 metric tons annually,” but it also “added six days to the shelf life of the orange juice.”

IKEA, in a packaging change for its GLIMMA tealight packs and elimination of air shipping, reduced CO2 emissions by 21 percent. Cisco Systems “saved more than $24 million annually from packaging improvements” for its IP phone by removing the hard-copy user guide, thereby adding enough space in shipping for an additional phone where a maximum of two could be shipped before.

In the realm of carbon neutrality, software giant Microsoft recently announced its commitment to achieve ‘carbon neutrality’ in energy use companywide during the next fiscal year, which begins on July 1. The move is consistent with Microsoft’s other “sustainability initiatives”, which favor sophisticated, IT-fueled projects conducted in a transparent and accountable fashion,” that tap into every business and unit in over 100 countries and provide economic incentives for them to participate.

Microsoft’s CFO will apply carbon emissions fees to business groups responsible for creating them, in what is called a ‘carbon fee chargeback model,’ and use the fees to create a fund to purchase carbon offsets.

With the company’s 2009 goal to reduce greenhouse gas emissions by at least 30 percent of revenue by 2012 met, the next step for Microsoft was carbon neutrality. The company met the goal via a “combination of efficiency initiatives, such as building retrofits, as well as purchasing renewable energy, and carbon offsets.”

Another event that set Microsoft on the carbon neutrality path “was part of a global strategy of how to think about the role of information technology for enabling energy efficiency both within IT but also more broadly,” said Rob Bernard, Microsoft?s chief environmental strategist. “It made us ask, is there something we could do, if we had the right IT systems in place, that would enable us to challenge ourselves and push governance to the next level once we had more information and data? And if we had the right kind of information, why couldn?t we go as fast as possible?”

Carbon offsetting is a voluntary process, and “has become increasingly popular with companies, but critics say it allows them to continue as normal instead of trying to significantly reduce their emissions.”

“Companies should be doing all they can to reduce their carbon emissions through energy efficiency and adopting new processes. However, often the easiest thing to do is get a bit of green PR by buying offsets overseas and declaring themselves to be carbon neutral,” said Mike Childs, head of campaigns at Friends of the Earth.

Jane Burston, founder of Carbon Retirement, a company that highlights bad practices in the carbon offsetting industry, said, “It is difficult to work out the extent to which investment is creating emission reductions beyond a business-as-usual situation. In the case of any forest conservation project, we have to ask, would the forest have been cleared without the extra money to protect it? Even if the answer to this is yes, that deforestation may just shift to a new, unprotected area, in which case emissions don’t go down overall.”

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