The business case for reducing emissions
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Transcript of The business case for reducing emissions
The business case for reducing emissions
Helping businesses increase value through reducing greenhouse gas emissions
click here to start >
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
ContentsAbout this guide
Section One: Regulation
Section Two: Financial considerations
Section Three: Reputation
Section Four: The future
Section Five: Next steps and support
Section Six: About greenhouse gas emissions and business
Section Seven: IGD and sustainability
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© Institute of Grocery Distribution 2012.
All intellectual property rights reserved.
IGD is the trade mark of the Institute of Grocery Distribution.
IGD authorises you to:
• View and print out the material for personal use only
• Extract small amounts of text, tables and charts for inclusion within internal company documents for limited distribution. IGD must be referred to as the source of information when this occurs
You are not authorised to:
• Sell, license or dispose of material for commercial or any other gain
• Alter the material in any way
Whilst every effort has been made to ensure that the information contained in this publication is correct, neither IGD nor any of its staff shall be liable for errors or omissions howsoever caused.
This publication is a guide only and does not provide specifi c advice on any specifi c issue. You must seek your own independent legal advice or specialist advice in all cases.
Contents and
How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
How to use this guideThe guide is an interactive PDF (iPDF). It will present itself in ‘full screen mode’. By pressing ‘Esc’ on your keyboard at any time you will return to a normal PDF screen where you can print copies/pages as required (please ensure that your printer options are set to landscape, and the appropriate print page size).
The guide has been specifi cally designed to navigate you through three key drivers that relate to greenhouse gas management and reduction.
To access external links, click on the words that are in blue text and underlined. Please ensure you are connected to the internet.
There are also links within the guide itself. Words that are in bold and italic link to relevant areas within the guide to help you understand the interconnectivity of the issues and opportunities.
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
About this guideThis guide has been developed by an IGD working group due to the success of the 2011 Environmental Sustainability Matrix. The guide has been created with the specifi c purpose of helping food and grocery businesses build sustainability issues into their strategic plans.
Currently, sustainability issues do not signifi cantly feature on a lot of companies’ corporate strategic plans. This is partly due to the diffi culty in quantifying return on investment in sustainability initiatives, but also due to a limited understanding within some business functions of the signifi cance of sustainability issues.
This guide is designed to help businesses understand what they can do to reduce their greenhouse gas emissions, and communicates it in a way that will provide the business case for investment in greenhouse gas (GHG) reduction initiatives.
The guide uses numerous best practice examples from industry and offers links to tools and further sources of information to help organisations reduce their GHG emissions.
With the business case for sustainability only recently gaining traction, most of the best practice examples presented are from larger food and grocery businesses. However, there are examples from smaller progressive companies. All the examples highlight the direction of travel by industry and offer numerous opportunities for organisations to collaborate and learn from others within the industry to drive positive change.
The guide focuses on three key drivers that organisations need to be aware of and address to help them reduce their GHG emissions and become a more environmentally sound business. The three key drivers are:
• Regulation• Financial considerations• Reputation
These drivers have different levels of importance. This is because regulation is something that organisations must comply to, whilst understanding and addressing the fi nancial considerations and reputational issues concerned with reducing GHG emissions can be entirely based upon an organisation’s priorities and concerns.
If you have best practice examples that you would like featured in this guide please submit them to: [email protected]
Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
Regulation
As companies must comply with regulation this is the fi rst section of the guide. Within this section there are links to relevant policies for industry, along with a list of practical tips to reduce emissions and a hierarchy of actions to reduce emissions.
Did you know? The Carbon Reduction Commitment is expected to deliver carbon savings of 21 MtCO2 by 2027. Click here to fi nd out more...
Financial considerations
The fi nancial considerations section focuses on the cost savings that can be achieved through reducing emissions and energy use, and features case studies from industry. There is also a checklist and links to help businesses reduce energy use and therefore save money and emissions.
Did you know? Marks and Spencer’s sustainability strategy has delivered a net benefi t of £185m in its fi rst 5 years. Click here to fi nd out more...
Reputation
The third section and fi nal driver is reputation. This section has examples of how companies have increased share price due to their sustainability credentials and improved staff retention. It also highlights some emerging issues that businesses need to be aware of to help improve their reputation, and subsequently enhance their share price, increase sales and build trust.
Did you know? 83% of shoppers expect food and grocery companies to be constantly checking that their suppliers are acting responsibly towards the environment. Click here to fi nd out more...
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section one: Regulation
Regulation has been, and will remain, an important tool in encouraging organisations to develop greener products, services and operating procedures by offering a clear direction of travel and a level playing fi eld. Over recent years, there has been an increase in the number of regulations introduced in the UK that are linked to, or are directly related to, greenhouse gas emission reductions that impact the food and grocery industry.
The Green Economy Timeline, below, gives an overview of existing regulations and policies that are related to greenhouse gas reduction and it also highlights future policy.
Once you have downloaded the above image, hover over the policies and regulations and a pop-up box will give you a brief description of the policy
The plans laid out by the UK government and the European Union (EU) highlight that more stringent regulations will come into force over the coming years to help the UK reduce its emissions.
A brief history of greenhouse gas emissions and climate change regulation The need to regulate for climate change was fi rst recognised in the early 1990’s. In 1992, the Earth Summit in Rio de Janeiro created the United Nations Framework Convention on Climate Change (UNFCCC). Whilst this convention encouraged industrialised countries to stabilise greenhouse gas (GHG) emissions, it was recognised that a harder-hitting commitment was necessary. The Kyoto Protocol was therefore created in Kyoto, Japan in 1997, as a legally binding framework for 37 industrialised countries and the EU. It came into force in 2005 and amounts to an average reduction in GHGs of 5% vs. 1990 over the fi ve year period between 2008-2012.
Regulation brings a level playing fi eld Organisations can benefi t from the certainty that regulation offers. In some instances, such as energy effi ciency linked to GHG reductions, regulatory compliance can also lead to signifi cant cost savings. To understand more about the cost savings associated with reducing GHG emissions go to the Financial considerations section.
The UK is in the vanguard of legislation for GHG reductions, and is the fi rst country to introduce a long-term legally binding framework to tackle climate change.
Many organisations from the food and grocery industry will be affected by more immediate regulations imposed by the UK government to help meet greenhouse gas reduction targets.
Even if legislation on greenhouse gases does not affect your organisation, reducing your emissions can bring other benefi ts, such as lower energy bills and improving the way stakeholders view your business. You may also be able to take advantage of related tax breaks.
Key regulations The major pieces of legislation associated with greenhouse gas reduction are listed below.
The Climate Change Act 2008 creates a new approach to managing and responding to climate change in the UK by:
- Setting ambitious, legally binding targets - Taking powers to help meet those targets - Strengthening the institutional framework - Enhancing the UK’s ability to adapt to the impact
of climate change - Establishing clear and regular accountability to
the UK Parliament and to the devolved legislatures.
The UK is committed to reducing its emissions by at least 80% by 2050, relative to 1990 levels. This means there is a need to transform the UK economy while ensuring secure, low carbon energy supplies to 2050.
Along with the Climate Change Act there are numerous other pieces of legislation that impact food and grocery businesses. Some of these can be seen on the next page.
Green Economy Policy Timeline(click on image to download)
PAGE 1 OF 4
Regulation is subject to change and alterations. For a full and up-to-date list of policy and
legislation, please visit the Department of Energy & Climate Change and Defra.
Contents andHow to use this guide
About this guide
Section one:
Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section one: RegulationThe Climate Change Levy (CCL) is a tax on energy supplied to non-domestic premises. The levy forms part of the Climate Change Act and was introduced in April 2001 by Defra. The CCL is an energy tax that adds approximately 15% to typical energy bills in UK businesses. The aim of the levy is to encourage businesses to become more energy effi cient and to reduce greenhouse gas emissions. There are related measures also designed to help companies become more energy effi cient:
- 100% fi rst-year capital allowances on energy-saving investments
- An exemption on CCL for energy generated from some renewable sources
- An exemption from CCL for fuel input to “good quality” combined heat and power
Click here for further details on the Climate Change Levy.
The Carbon Reduction Commitment (CRC) is a mandatory UK-wide trading scheme covering large business and public sector organisations; these produce 12% of UK carbon emissions. Qualifi cation for CRC is determined on the basis of half-hourly electricity supply.
Click here for further details on the Carbon Reduction Commitment.
The Energy Performance of Buildings Regulations require new builds and major refurbishments of buildings to meet the energy effi ciency requirements of the Building Regulations. They also include mandatory inspection of air-conditioning systems every 5 years.
Display Energy Certifi cates are required in buildings with a usable fl oor space of more than 1,000m2 that are occupied or part occupied by public authorities or institutions providing services to a large number of people who may visit the building.
Click here for further details on the Energy Performance of Buildings Regulations.
Fluorinated greenhouse gasesThe fl uorinated greenhouse gases (F gases) are hydrofl uorocarbons, perfl uorocarbons and sulphur hexafl uorides.
F gases form part of the Kyoto Protocol’s ‘basket’ of greenhouse gases. Action to contain, prevent and reduce emissions of F gases is being taken by the EU as part of its obligations under the Kyoto Protocol. The UK and the EU are signatories to the protocol and the UK is therefore committed to reducing its emissions. In 2006, the EU introduced the EU F gas regulation. The obligations in this regulation are fl eshed out by a number of European Commission regulations that provide extra detail and introduce minimum requirements which must be complied with. The EU framework has been fully implemented in Great Britain by the Fluorinated Greenhouse Gases Regulations 2009 (FGG Regulations 2009).
Click here for further details on fl uorinated greenhouse gases from the European Commission.
Companies Act 2006In addition, UK company law places some requirements on businesses to report environmental information. The Companies Act 2006 (section 417) requires that all companies, other than small companies, include a business review in their directors’ report.
The purpose of the business review is to inform stakeholders of the company and help them assess how the directors have performed their duty to promote the success of the company. The business review should include a fair review of the company’s business and its principal risks and uncertainties.
For a quoted company, the business review must include, amongst other things, information about environmental matters (including the impact of the company’s business on the environment) to the extent necessary for an understanding of the development, performance or position of the company’s business.
Leading businesses to disclose emissionsThe UK Government has confi rmed that companies listed on the London Stock Exchange will be required to report on their carbon emissions from 2013.
The mandatory carbon reporting will require about 1,800 of the UK’s largest listed companies to report annually on their greenhouse gas emissions.
“ “The CRC is expected to deliver carbon savings of 21 MtCO2O by 2027.2
DECC
PAGE 2 OF 4
Contents and How to use this guide
About this guide
Section one:
Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
Regulation is subject to change and alterations. For a full and up-to-date list of policy and
legislation please visit the Department of Energy & Climate Change and Defra.
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section one: RegulationThe hierarchy of actions to reduce greenhouse gas emissionsThe Department for Energy and Climate Change has created a hierarchy of actions to combat the effects of climate change related to GHG emissions. The public, businesses and the public sector are all urged to take action on their carbon footprint in the following order:
Organisations are recommended to follow the hierarchy of actions to reduce greenhouse gas emissions, and only use offsetting where emissions are currently unavoidable.
How to check the quality of offset products?The UK Government recommends organisations look for offset providers that meet the following criteria to help choose good quality offsets. Providers should:
- Calculate an organisation’s emissions accurately - Deliver credits within a year of an organisation
buying them - Declare clearly how much the credits cost per tonne - Provide information about the role of offsetting
in tackling climate change and advice on how to reduce an organisation’s carbon footprint
The Government’s Quality Assurance Scheme for carbon offsetting ran from February 2009 to June 2011. The scheme is now closed. Archived pages from the Quality Assurance Scheme are available here.
Further information, advice and support to help organisations to reduce their emissions is available through Business Link and the Carbon Trust who provide a range of public-funded services such as free web support, helplines and events.
Source: DECC
PAGE 3 OF 4
Contents and How to use this guide
About this guide
Section one:
Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section one: RegulationBelow is a list of practical tips to help organisations ensure they are reducing their emissions.
- Has the organisation measured its greenhouse gas (GHG) emissions?
- Does the company have a GHG management reduction policy?
- Is someone accountable for GHG compliance?
- Has the company looked at implementing an Environmental Management System?
- Do GHG reduction Key Performance Indicators (KPI) exist in the organisation?
- Where is the highest level of direct responsibility for climate change within the company?
- Are GHG reduction KPIs reported at Board level?
- Does the company provide incentives for the management of climate change issues, including the attainment of targets?
- Do GHG plans get reviewed regularly?
- How is GHG compliance supported in the business?
- Is climate change and GHG reduction integrated into the business strategy?
- Have any climate change risks been identifi ed (current or future) that have the potential to generate a substantive change in the business operations, revenue or expenditure?
- Have climate change opportunities been identifi ed (current or future) that have the potential to generate a substantive change in business operations, revenue or expenditure?
- Does the company engage with policy makers to encourage further action on mitigation and/or adaptation?
- Has the organisation considered application for the Carbon Trust Standard?
- Are the company’s greenhouse gas emissions diclosed through the Carbon Disclosure Project?
- Has the organisation considered working with its trading partners to reduce GHG emissions outside of its direct control?
Some useful tools and guidesDefra, in partnership with the Department for Energy and Climate Change (DECC), provides guidance for businesses and organisations on how to measure and report their GHG emissions:
- Guidance on how to measure and report your greenhouse gas emissions (pdf)
- Small Business User Guide: Guidance on how to measure and report your greenhouse gas emissions (pdf)
The reports explain how organisations can measure and report their GHG emissions as well as set targets to reduce them. The reports are aimed at all sizes of businesses as well as public and third sector organisations.
Defra has also created guidelines to help:
- Give clear guidance to companies on how to report on their environmental performance using environmental Key Performance Indicators (KPIs)
- Defi ne which KPIs are most relevant to which sectors, and
- Set out the business rationale for managing environmental performance using KPIs.
Access the report here: Environmental Key Performance Indicators Reporting Guidelines for UK Business (pdf)
PAGE 4 OF 4
Did you know? Walmart’s energy and fuel effi ciency initiatives - launched in 2005 - saves the retailer more than $500m a year.
Contents and How to use this guide
About this guide
Section one:
Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
Did you know? Morrisons Kidderminster store became the fi rst UK supermarket to achieve an ‘excellent’ BREEAM rating for its environmental performance.
Did you know? Robert Wiseman Dairies has a certifi ed Environmental Management System to ISO 14401, which reduces the cost of its Pollution Prevention and Control permits and helps it identify potential risks that could end up costing it fi nancially and reputationally.
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section two: Financial considerationsGreenhouse gas (GHG) emissions are likely to have fi nancial implications for all organisations in the grocery industry. Legislation brings taxation, restrictions on activities with associated costs, and even fi nes. Companies that do not reduce their emissions of GHGs could fi nd taxation and other duties to governments increasing, and may fi nd their activities are restricted.
Reducing GHG emissions can result in cost savings, as energy bills are reduced. While reducing energy use through better working practices and energy effi ciency investments generally have quick payback, there may be costs associated with achieving more stretching GHG emissions reduction targets.
Reducing GHG emissions from sources not associated with energy, such as refrigerants and agricultural husbandry systems, may be complex and carry costs that are less easy to justify with conventional fi nancial analysis.
The risk of not actingDespite climate change posing a ‘substantial’ risk to the UK, fewer than half of the UK’s major companies have contingency plans to deal with climate change.
That is the conclusion of research by the Carbon Disclosure Project (CDP), which conducted a poll of UK FTSE 100 companies as part of its Insight into Climate Change Adaptation by UK companies. However, the report concludes that for businesses, risks and opportunities are strongly linked, adding that many new business risks can also be seen as opportunities because there is a possibility of gaining competitive advantage through better strategic planning.
Investors and shareholders are being called upon to keep pressure on their business interests, in a bid to adapt to climate change and sustain long-term growth. The former Environment Minister Lord Taylor has been reported as saying: ‘Investors that want to keep share prices high must stress the need for action to prepare for climate change. They can provide an incentive to businesses to not only consider the long-term risks of climate change, but also the opportunities that can be grasped now.’
The UK Government estimates that it will cost approximately £25-29bn to deliver the carbon reductions that are necessary. However, it insists that the cost is far lower than the cost of no action. This has been addressed by Lord Stern in the Stern Review, and subsequently acknowledged by the food and grocery industry.
80% of directly responding FTSE 100companies identify substantive risks to their business as a result of climate change.
Insights into ClimategChange Adaptation by g p yUK Companies, Carbon p ,Disclosure Projectj (pdf)t
“
“
80% is the potential value uplift for a company proactively addressing climate change opportunities.
Carbon Trust (pdf)t
For every £2 we spend now on tackling climatechange, we are saving future generations anywhere between £5 and £20 at today’s value.
Sir Terry Leahy, January y y, y2009
The UK’s annual energy spend is £23,645 million and most businessescould save 10% off theirenergy bills through noor relatively low cost measures.
Carbon Trust (pdf)t
Did you know? In 2012, Unilever claimed that there was a 68% increase in their share price following the launch of its Sustainable Living Plan.
PAGE 1 OF 4
Did you know? Marks and Spencer’s sustainability strategy, Plan A, has delivered a net benefi t of £185m in its fi rst fi ve years.
Contents and How to use this guide
About this guide
Section one: Regulation
Section two:
Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section two: Financial considerationsTax breaks to encourage energy effi ciencyTax breaks are on offer as an incentive to encourage organisations to adopt certain environmentally responsible practices. For example:
- Using sources of energy that have less environmental impact can make organisations eligible for a reduction in the climate change levy
- Organisations can benefi t from investing in energy saving plant and machinery through tax breaks called enhanced capital allowances (ECAs) Click here for a guide on enhanced capital allowances for energy saving products
- Organisations can also use ECAs for investing in company cars that have low CO2 emissionsClick here for a guide on fi rst year allowances: the basics
- Organisations that frequently travel in and out of the congestion charging zone in London may be eligible for a discount if vehicles use alternative fuelsClick here for a guide on reducing your vehicle emissions
Key issuesCommercial activities that create greenhouse gas emissions are targeted through Government schemes to restrict overall emissions through the issuing of quotas, and through taxing emissions.
Most activities creating GHG emissions in the grocery industry are associated with the generation of energy from fossil fuels. These may be directly emitted from a company’s premises or vehicles through the use of oil, petrol or gas, or indirectly through the use of electricity. There is therefore a link between an enterprise’s energy and fuel bill, and its greenhouse gas emissions.
If possible, switching to lower global warming potential fossil fuels (e.g. gas), could have a signifi cant reduction of GHG emissions. There may be a fi nancial cost associated with such moves, but this could be reduced if a carbon fl oor price is introduced in the UK or if an organisation is captured under the CRC Energy Effi ciency Scheme.
For parts of the grocery industry, the use of refrigerants has a signifi cant impact on the emission of GHGs. Refrigeration is the largest source of GHGs in any supermarket through both the energy required to power them and the refrigerants themselves.
Many refrigerants have very high global warming potential if released into the atmosphere. Replacing these refrigerant gases with more benign alternatives is costly, but can have signifi cant environmental benefi ts.
Parts of the grocery industry’s upstream activities such as agriculture or petrochemical processing create signifi cant GHGs. These would not be captured by any current legislation and are not subject to quotas or taxation, but they are captured by lifecycle analysis and carbon footprinting, and stakeholders may choose to reject products that have higher carbon footprints.
Similarly waste food products create GHGs as they decompose, particularly methane if they are sent to landfi ll. Increasing landfi ll taxes are causing companies to deal with waste at source.
MeasuresFinancial considerations will be measured in terms of:
- Increased costs – taxation or investment- Reduced costs – from reducing energy or other
input use- Revenues – which could increase or decrease,
according to the outcome of actions taken
Reduction/ImprovingReducing the impact of taxation and quotas on GHG emissions is clearly best addressed by reducing the quantity of emissions.
Signifi cant fi nancial savings can be made through reducing the use of fossil fuels and can be achieved through many means – the Carbon Trust estimates that businesses in the UK waste some 10-20% of the energy they buy due to poor control of heating, air conditioning and ventilation and through leaving lights and appliances on when not in use.
Did you know? Adnams invested in a new more effi cient distribution centre which resulted in it using 58% less gas and 67% less electricity per square metre. The energy effi ciencies save Adnams £50,000 per annum.BitC
PAGE 2 OF 4
Contents and How to use this guide
About this guide
Section one: Regulation
Section two:
Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
Did you know? Sainsbury’s estimates that if all UK supermarkets converted to CO2 refrigeration, the UK’s carbon emissions would immediately drop by 2 million tonnes per year.
Did you know? Robert Wiseman Dairies utilised the enhanced capital allowance Scheme to install two new low lose, energy effi cient transformers at its East Kilbride processing facility saving 353 tonnes of CO2 per annum.
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section two: Financial considerationsOver a longer timescale, investments in alternative sources of power to generate electricity such as wind turbines, photovoltaic cells or bio-digesters could both reduce greenhouse gas emissions and save money. However, the longer payback period for such investments may put them beyond the means of many companies.
ChallengesReplacing HFC refrigerant gases with more benign alternatives is a legal requirement, but these are more expensive and less effi cient so create a cost. Increasing vigilance over leakage from refrigerant systems is essential if cost control is to accompany GHG reductions due to refrigerant gases.
Upstream GHG emissions that contribute to a product’s carbon footprint are most likely to impact companies fi nancially if their customers (retailers or consumers) start to ‘choice edit’ higher carbon footprint products out of their shopping baskets.
However, the practicality of accurately measuring upstream emissions is challenging, particularly from a global supply base where raw materials are sourced from different regions, using different agricultural systems, at different times of the year or due to changing world markets. Where opportunities do exist to reduce GHG emissions from specifi c agricultural systems (e.g. soil tillage, rainforest destruction, animal diet) there are likely to be many considerations including cost, and human and animal welfare, that prove challenging.
Evaluating the costs and benefi ts of reducing GHG emissions in the upstream supply chain is probably one of the greatest environmental challenges to the food and grocery industry.
Reducing GHGs resulting downstream, from decomposition of food waste by consumers should result in cost savings, as overall input costs reduce and landfi ll taxes are avoided. However, there will be costs associated with developing the systems and processes required to reduce waste, and could potentially reduce sales for various organisations in the supply chain as their customers purchase less.
Unintended consequencesUnderstanding the true impact of GHG reduction measures can be complex, and ensuring there is a net benefi t often requires costly lifecycle assessment work.
Ostensibly benefi cial reduction measures, such as limiting the use of air freight, do not always give the desired outcome. For example, a product lifecycle assessment of roses found that fl owers air freighted from Kenya have a lower carbon footprint than roses from Holland1 transported by sea, due to the large amounts of energy consumed by hothouses in Holland. Similarly, packaging changes that are benefi cial to retailers may not always result in an emissions reduction over the lifecycle of the product if, for instance, recyclability is compromised.
Below is a checklist to help organisations ensure cost savings can be achieved and greenhouse gas production reduced.
Energy/GHG Saving- What is the organisation’s energy costs?- Where does the organisation waste energy?- What energy-saving measures could be
introduced?- How many staff are aware of the ways in which
they can save energy?- Are colleagues aware of basic energy-saving
measures?- Has the organisation considered sourcing energy
from renewable sources?- Has the organisation considered investing in
onsite renewable energy?
Did you know? Mornfl ake Cereals has commissioned one of Europe’s largest wind turbines which has reduced costs for the business and cut its CO2 emissions by over 4,000 tonnes a year.
Did you know? 97% of Waitrose’s energy comes from renewable sources.
PAGE 3 OF 4
Did you know? Tesco is working to cut emissions from its own operations and through numerous initiatives within stores and distribution. It has made savings of over £200m in its energy bills.
Did you know? Asda’s sustainability strategy is set to deliver £800m in savings by 2020.
Contents and How to use this guide
About this guide
Section one: Regulation
Section two:
Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
Did you know? Brakes Group donated over 1 million meal equivalents of in date food waste to charity in 2011, diverting 420 tonnes away from landfi ll.
Did you know? Kraft Foods has saved energy and carbon through effi cient generation and reuse of heat.
1 Comparative Study of Cut Roses for the British Market Produced in Kenya and the Netherlands http://www.fairfl owers.de/fi leadmin/fl p.de/Redaktion/Dokumente/Studien/Comparative_Study_of_Cut_Roses_Feb_2007.pdf
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section two: Financial considerationsHeating- Are there staff complaints about the temperature?- Have heaters/boilers been serviced in the last 12
months?- Are portable heaters being used?- Are heaters and air conditioning units operating in
the same space?- If hot water is provided, is it being wasted (such as
dripping taps, or leaking urns)?- Do all areas have the same heating requirements?- Are room thermostats working and set to the correct
temperature?- Are the timers working and on the correct settings?- Are other heating controls working and on the
correct settings?- Are there obstructions in front of radiators or
heaters?- How are extractor fans controlled (e.g. in toilets)?- Are windows and doors open when heating or air
conditioning is on?- Are there any cold draughts coming from windows or
doors?
Lighting- Are lights switched off (if daylight suffi cient/room not
in use)?- Are any old, large diameter (1.5 inches) fl uorescent
tubes still in use?- Are lamps, fi ttings and roof lights clean?- Are traditional tungsten light bulbs still in use?- Are light switches arranged conveniently and
labelled?- Is exterior lighting switched off when not needed?
In the offi ce- Have computers got built-in energy saving features
— and are they activated?- Are computers left on overnight?- Are monitors and fans switched off when not in use?- Are photocopiers located in air conditioned areas?- Are printers and photocopiers left on overnight/at
weekends?- Are vending machines/water coolers left on all the
time?
In the factory/warehouse- Are pumps/fans/compressed air switched off when
the equipment they serve is not in use?- Are there compressed air leaks?- Are refrigeration units being run effi ciently?- Are there energy/GHG reduction champions?
Source: Carbon Trust
For further information and advice visit: Carbon Trust Empower - Empowering employees to reduce carbon emissions
Heating costs rise by about 8% for every 1°C of overheating
Green your business for ygrowthg
“
“
Lighting in a typical offi ce costs about £3.75/m2 annually, but 2
in the most effi cient offi ce only costs about £1.00/m2
Green your business forygrowthg
Did you know? All Marks and Spencer directors have a sustainability target as part of their annual bonus objective.
PAGE 4 OF 4
Contents and How to use this guide
About this guide
Section one: Regulation
Section two:
Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
Did you know? Morrisons campaign ‘Switching On to Switching Off’ trained over 110,000 colleagues in energy awareness, saving over 24,734 tonnes of carbon emissions and £3.28m in energy costs.
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section three: ReputationReputation and trust are extremely important to companies. A good reputation can enhance the share price, increase sales and build trust in an organisation and brand. Increasingly, more companies are being scrutinised by third party organisations, trading partners and other stakeholders about their green credentials and how they operate.
Over the years, there has been an increase in the number of indexes and surveys that have ranked and critiqued organisations on their sustainability performance. The result of which has impacted companies’ reputations both postively and negatively.
This has meant that companies really need to understand their own impacts and look at ways of reducing them, or run the risk of becoming targeted and having their reputation tarnished - potentially not only losing trust but also business.
It is important for organisations to understand how their greenhouse gas reduction initiatives are perceived by stakeholders and how this differs from actual performance. Organisations could be perceived to be doing well while in fact they are not, or vice-versa; this could leave an organisation open to potential threat.
More recently, there has been a monumental shift in how companies can be named and shamed. Sites like WikiLeaks and social media platforms like Facebook and Twitter are holding companies to account and are enabling disgruntled employees, customers or suppliers to broadcast their frustrations to the world, with potentially devastating consequences. The barriers between brands and stakeholders have crumbled with the increased use of social media.
The growing power of non-government organisationsNon-government organisations (NGO) have become signifi cant drivers for change over recent years. Their focus has predominately been on large companies with poor reputations.
However, this is starting to change. With the increase in technology and social media, NGOs are fi nding it far easier to target more companies and gain signifi cant traction with their campaigns. This presents a real risk to companies that aren’t addressing issues or are not willing to work with NGOs. A good reputation can take years to develop but can be lost very quickly.
Know your suppliersThe reputation of companies can be adversely affected by their suppliers. This growing trend is likely to make companies very cautious in selecting suppliers and a poor reputation or apparent poor performance may reduce the likelihood of winning contracts.
Greenhouse gas emissions and reputationGreenhouse gas management is becoming business critical. Research has shown that leading companies are delisting suppliers who fail to manage greenhouse gases. Many retailers and manufacturers are measuring the greenhouse gas impact of their operations, and are looking to their suppliers to measure and manage their own emissions. Industry is also being scrutinised by non-government organisations to reduce emissions and become more environmentally aware.
Based on surveys by McKinsey and the UN Global Compact led by Accenture, as well as research by the Boston Consulting Group, there is a strengthening case for industry to take reputation and trust as a serious issue when it comes to reducing greenhouse gases.
79% of consumer goods CEOs cite ‘brand, trust and reputation’ as one of the top three factorsdriving them to take action on sustainability issues.
New Era of Sustainability in yConsumer Goods (pdf)s
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83% of shoppers expect food and grocery companies to be constantly checking that their suppliers are acting responsibly towards the environment.
IGD, ShopperVista, pp
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Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:
Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section three: ReputationComplacency can be seductiveThe reputation argument has a clear downside compared to regulation and fi nancial considerations as it is hard to measure; without a crisis, complacency can be seductive.
However, with the world becoming more interconnected through technologies and consumers expecting more from industry, organisations that don’t understand the reputational issues of greenhouse gas reduction could fi nd themselves exposed to negative media and consumer campaigns or boycotts.
Key issuesThe impact of GHGs on climate change is one of the most widely publicised environmental sustainability issues. Businesses therefore need to ensure that their reputation is not damaged by poor environmental strategies, lack of awareness of their impacts (direct and indirect) or by mishandling the communication of their strategies.
Examples of issues associated with a poor reputation in GHG management are as follows:
Non-government organisation (NGO) focusThe reputation of a business can be undermined by a disproportionate focus on a specifi c area by a pressure group or NGO.
Information on business activities can be quickly communicated via social media and action can be coordinated in a way that would previously have taken far longer. Photos and videos can be uploaded on to the web in minutes and many businesses have found themselves targeted by groups via social networks. Issues raised via networking sites can be picked up by mainstream media very easily and quickly.
Organisations can monitor activity on social network sites, either informally or via specifi c tools applied by media agencies, to help address any potential issues.Some NGOs will have their own websites, which can be monitored for positive and/or negative stories. Press cutting services exist that can also help identify media coverage on specifi c topics. Media stories can be monitored and reported on for their positive/negative tone through services like Google Alerts.
Investor confi denceExisting investors need to know that the business is not at risk of negative publicity arising from inadequate management of the supply chain and a resultant increase in GHG emissions.
Environmental management, including the management of GHGs, is one of the measures that investors will look for when evaluating future investments. Shareholders will have more confi dence in a business with a good environmental reputation that can be demonstrated by quantifi ed measures.
The most tangible measure of overall investor confi dence is the share price of publicly listed businesses. How much of the price is driven by the management of GHGs is harder to quantify.
Other measures will include the amount of funding that is made available by investors for energy-saving technology, for example in more effi cient baking or heating processes during the manufacturing of products.
Did you know? In 2012, Unilever claimed that there was a 68% increase in their share price following the launch of its Sustainable Living Plan. 68% of shoppers would be
unhappy if they found out that the food and grocery products they choose to buy have a poor environmental record.
IGD, ShopperVista, pp
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Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:
Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
63% of global, socially-conscious consumers are under the of age 40, and they consult social media when making purchase decisions. They are most concerned about environmental,educational and hunger.
The Global, Social-Conscious ,Consumer Report, 2012p , . (pdf)
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The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section three: ReputationCustomer and consumer confi denceRetailers and manufacturers must ensure that consumers trust the brands they buy. Trust can be undermined by concerns about the way in which a product is manufactured or where ingredients come from. For example, the use of ingredients that have caused deforestation will have a negative impact on brand reputation.
On the contrary, some initiatives can enhance reputation; a reduction in food waste sent to landfi ll will have a positive impact on business or brand reputation.
Brands that engage consumers in their sustainability credentials are more likely to build long-term trust. This translates into a stronger commercial performance and a more sustainable market share.
Tangible measures of consumer confi dence are sales growth and market share. Companies can include questions about their environmental credentials in regular brand tracking questionnaires. This will allow organisations to identify if their environmental performance is perceived to be improving.
Employee recruitment and retentionEmployees are more likely to want to work for a business with a good sustainability reputation.
Studies have shown that recruitment of higher calibre individuals and improved retention can be achieved through having a positive reputation.
Employees may be prepared to accept a lower salary to work for a business that fi ts with their ideals.
Success in this area can be measured by employee turnover, the number of unfi lled vacancies as well as via internal questionnaires and exit interviews that measure the views of employees on an organisation’s environmental credentials.
Below is a list of organisations and indexes that benchmark organisations on sustainability credentials.
It may be worth considering entering into the awards or at least understanding their criteria for success to help improve reputation?
- Interbrand Best Green Brand- Goodbrand Social Equity Index- WPP Top Green Brands Index- BitC Corporate Responsibility Index- FTSE4Good Index- Dow Jones Sustainability Index- The Times Green Company awards- IGD FIA Awards- BusinessGreen Leaders Awards- Green Retailer of the Year - Green Supplier of the Year - Green Wholesaler of the Year - Guardian Green Business Awards- Carbon Disclosure Project - International Green Awards
79% of CFOs believe ESG[environmental, social,governance] programmes add value to the business by maintaining good corporate reputation and/or brand equity.
McKinsey Global Survey of y yCFOs: Valuing corporate socialg presponsibility.p y
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The Co-operative Group report that its ethical policy has positively impacted customer attrition. 88% of The Co-operative Food’s customers believe that itsethical policy made the business more appealing.
BitC
Did you know? Marks & Spencer claim that candidates often mention Plan A as a reason why they want to work for them, and their employee survey confi rms that Plan A contributes to job satisfaction.
Did you know? Over half of the student population (58%) would take a 15% pay cut to “work for an organisation whose values are like my own“Talent Report: What workers want in 2012 (pdf)
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Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:
Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
Did you know? United Biscuits achieved Platinum status for the second year running in Business in the Community’s Corporate Responsibility (CR) Index 2011.
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section four: The futureLike any assessment of the future, projections of the future impacts of climate change will always be uncertain. This is in part due to uncertainty over the level of future greenhouse gas emissions, but also due to limited understanding of some aspects of climate change, and to the extent to which we are able to represent a system as complex as the climate system in climate models.
However, this uncertainty over the future is not something which should paralyse decision-making.
Looking back to predict the future Scientifi c evidence suggests that our climate is changing, mainly as a result of human activity. Over the course of the last century, global average temperature increased by 0.74°C2. Each of the last three decades has, on average, been warmer than the previous, and each has set a new record; with the 2000s the warmest decade of all3. Continuing this warming trend has profound implications for our societies and economies.
Since the industrial revolution, through the burning of fossil fuels, agricultural practices and land use changes, the levels of greenhouse gases in the earth’s atmosphere have risen.
Locked into a challenging future We are already committed to a certain amount of climate change. Even if global greenhouse gas emissions were to dramatically reduce tomorrow the warming trend will continue for several decades as the climate system slowly responds to past and current emissions.
The growing risk At the beginning of 2012, Defra published the UK’s fi rst Climate Change Risk Assessment (pdf). This report looks at risks posed by climate change across UK regions and sectors out to the end of this century, identifying key risks – in the absence of any action – to the increased chance of fl ooding, water scarcity and threats to wildlife; and establishing that, while warmer winters may reduce cold-related deaths, hotter summers are likely to increase health risks. For the majority of the risks identifi ed, the severity of impact increases with time in scenarios where emissions are not constrained.
However, the report did also suggest that there may be opportunities; for example, for businesses to make the most of potential services related to climate change adaptation. However, the net effect of climate change for the UK is thought to be negative, if no action is taken.
The implication With climate change having a net negative impact on the UK, it is very likely that regulation around greenhouse gas emissions will become stricter. Greenhouse gas emissions are linked to fossil fuel energy production, and with energy prices expected to rise, companies would benefi t fi nancially, if they can reduce greenhouse gas emissions. The benefi t will be even greater if a carbon fl oor price is introduced.
It is very likely that more drivers to reduce greenhouse gas emissions will emerge than those addressed in this guide. Therefore organisations would be wise to start understanding their own risks and the risks that impact their suppliers and customers so that they can take steps to future-proof their organisation against the challenges that they face in reducing greenhouse gas emissions and climate change.
2 Trenberth, K. E., Jones, P. D., Ambenje, P., Bojariu, R., Easterling, D., Klein Tank, A., Parker, D., Rahimzadeh, F., Renwick, J. A., Rusticucci, M., Soden, B. & Zhai, P. (2007) Observations: Surface and Atmospheric Climate Change In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change Cambridge University Press
3 Arndt, D. S., Baringer, M. O. and Johnson, M. R. Eds. (2010) State of the Climate in 2009. Bull. Amer.Meteor. Soc., 91 (7), S1–S224
The uncertainty is not whether the world will experience climate change but how its impacts will be felt.
Future risk: Climate change andgenergy securitygy y (pdf)y
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Rising temperatures will affect weather and precipitationpatterns, sea level will rise, heatwaves will increase, and there is the potential for an increase inextreme events, such as droughts,fl ooding and storm surges.
Future risk: Climate change and genergy security gy y (pdf)
Energy prices are projected to rise and become more volatile.
The Future of Food and Farmingg(pdf)
Policies for climate change mitigation will also have avery signifi cant effect on the food system – the challenge of feeding a larger global population must be met while delivering a steep reduction ingreenhouse gas emissions.
The Future of Food and Farming g(pdf)
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Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:Reputation
Section four:
The future
Section fi ve:
Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section fi ve: Next steps and supportIt is inevitable that companies will be at different stages on this journey. This guide therefore offers a breadth of information and advice, from the very simple and practical, to the more complex.
Businesses that need more detail on particular themes are urged to follow the links to sources of further information and use the following tools and resources.
Department for Environment, Food and Rural AffairsDefra takes the lead on adaptation to climate change in the UK. The Adapting to Climate Change team has a web site, which provides a useful overview of climate change adaptation and outlines the Government’s approach for developing policy in this area. Note that adaptation is a devolved issue, and the devolved administrations are developing their own programmes.www.defra.gov.uk www.doeni.gov.uk www.scotland.gov.ukwww.wales.gov.uk
Information and reports to help organisations measure and report environmental impacts can be accessed here: http://www.defra.gov.uk/environment/economy/business-effi ciency/reporting/
The contribution that reporting of greenhouse gas emissions makes to the UK meeting its climate change objectives report can be accessed here: http://www.offi cial-documents.gov.uk/document/other/9780102969283/9780102969283.pdf (pdf)
Department for Energy and Climate ChangeThe Department was created in 2008, bringing together the Government’s climate change and energy policy areas. It leads on work to reduce greenhouse gas emissions and also on international adaptation initiatives.www.decc.gov.uk
Carbon TrustThe Carbon Trust is an organisation helping businesses, governments and the public sector to accelerate the move to a low carbon economy through carbon reduction, energy-saving strategies and commercialising low carbon technologies.http://www.carbontrust.com/home
Carbon Trust SME Network Join the Carbon Trust’s free online community designed to help SMEs share knowledge and best practice with each other regarding saving energy, cutting carbon and reducing costs.http://smenetwork.carbontrust.com/
Carbon Disclosure ProjectThe Carbon Disclosure Project (CDP) is an independent not-for-profi t organisation working to drive greenhouse gas emissions reduction. https://www.cdproject.net/en-US/Pages/HomePage.aspx
Report: “Insights into Climate Change Adaptation by UK companies” (PDF 2MB) uses data disclosed to Carbon Disclosure Project by FTSE 100 companies in response to shareholder requests for insights into business attitudes and actions.
BACLIAT (Business Areas Climate Impacts Assessment Tool)BACLIAT is a simple tool aimed at helping organisations scope the impacts of climate change. It uses six headings representing generic business areas (markets, process, people, premises, logistics and fi nance) to encourage the identifi cation of a comprehensive list of potential threats and opportunities from climate change. It is primarily aimed at use in a workshop setting, but has also found application in research projects and the development of climate audits. BACLIAT was developed in collaboration several of UKCIP’s business stakeholders, representing a range of sectors.www.ukcip.org.uk/bacliat
UKCIP Adaptation WizardThe UKCIP Adaptation Wizard is an online tool to help you adapt to climate change. It is based on the Environment Agency and UKCIP report: Willows R.I., Connell, R.K. (2003) Climate adaptation: Risk, uncertainty and decision-making. It will take you through a 5-step process that will help you to develop a climate change adaptation strategy.www.ukcip.org.uk/wizard
UK Climate Projections (UKCP09)The UK Climate Projections provides probabilistic information on expected changes in the UK’s climate at a regional level throughout the 21st century. The UKCP09 package also includes a Weather Generator, which will enable users to estimate the increasing (or decreasing) frequency of specifi c weather types, such as heatwaves or heavy downpours of rain. It is available through an online facility, enabling users to access the information at different levels of detail and customise it for their purposes.http://ukclimateprojections.defra.gov.uk
PAGE 1 OF 2
Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:
Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section fi ve: Next steps and supportCLARA (Climate Adaptation Resource for Advisors)A web-based resource aimed at those providing advice and support to SMEs. Advice is provided on making the business case and some practical tips for providing appropriate support, including delivery resources.www.ukcip.org.uk/clara
Climate change partnerships in the UKThe English regions and the devolved administrations all now have climate change impact partnerships that bring together local stakeholders who share an interest in climate change issues. The partnerships share information and provide a focal point for action on climate change in their communities. Some focus only on climate change impacts and adaptation, while others also incorporate work on climate change mitigation. Links to these partnerships can be found on the Climate UK website.
Climate UK is the national network of climate change partnerships which exists in order to maximise the benefi t of each partnership’s work.www.climateuk.net
UKCIP programme of work with businessUKCIP has a rolling programme of initiatives that involve working with the business community. As well as working directly with companies, it engages with organisations that represent, support or regulate business. Advice and support is free on the understanding that where appropriate, fi ndings and learning can feed back into publicly-available tools and resources.
See the UKCIP website or telephone on 01865 285717 for more information on current business initiatives and how to get involved.www.ukcip.org.uk/business
Environment Agency (EA)The EA provides environmental protection and improvement in England and Wales. They work with businesses and other organisations to prevent damage to the environment by providing education and guidance.www.environment-agency.gov.uk
The Environment Agency also provides extensive information on fl ooding: www.environment-agency.gov.uk/homeandleisure/fl oods/
The Scottish Environment Protection AgencySEPA is responsible for the protection of the environment in Scotland. Its task is to protect the land, air and water in partnership with others, and enabling Scotland to sustain a strong and diverse economy.www.sepa.org.uk
SEPA’s information on fl ooding can be found here: www.sepa.org.uk/fl ooding
Business LinkBusiness Link is the primary access route for businesses seeking support. It provides information on a range of issues and provides a diagnostic and signposting function.http://www.businesslink.gov.uk/static/html/layer-126.html
Confederation of British Industry (CBI)The CBI is the premier lobbying organisation for UK business on national and international issues. It works with the UK government, international legislators and policy-makers to help UK businesses compete effectively. They have a programme of work on climate change, which is driven by a dedicated climate change board.http://climatechange.cbi.org.uk
Federation of Small Business (FSB)The FSB is a campaigning pressure group promoting and protecting the interests of the self-employed and owners of small fi rms. As well as having a lobbying role, it delivers a wide range of services to business.www.fsb.org.uk
The Institute of Environmental Management and Assessment Volume 14 Climate Change Mitigation (pdf)
PAGE 2 OF 2
Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:
Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:IGD and sustainability
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section six: About greenhouse gas emissions and businessThe Earth’s climate is constantly changing and this has and continues to have an impact on our natural environment and the way businesses operate. However, these climate changes are expected to become more signifi cant over the coming decades and century4. According to most climate scientists, these changes can now be directly linked to human activities, through activities like burning fossil fuels, and therefore businesses need to be prepared and able to adapt to address these challenges.
According to the United Nations Environment Programme, over the last twenty years we have witnessed some signifi cant changes in our environment.Businesses need to understand how this direct link between human activities and climate change will increase and alter regulation and reputation. Early action can reduce future costs and help business exploit opportunities from climate change adaptation5.
However, even if we manage to limit future GHG emissions, current and historical emissions mean that a certain amount of additional global warming is inevitable6. The increased warming is projected to have detrimental effects on our natural environment. Look at the ‘Projected impact on increasing GHGs’ image to understand how increased warming will impact our environment and business operations.
Source: Parry , et al., Nature Reviews Climate Change, 2008
What are greenhouse gases and why are they an issue?Greenhouse gases are any of the atmospheric gases that contribute to the greenhouse effect (warming of the Earth’s temperature) by absorbing infrared radiation.
4 For historical analysis, see the Met Offi ce and UK Climate Impacts Programme web pages, e.g. http://www.metoffi ce.gov.uk/climate-change/guide and http://www.ukcip.org.uk/faq/ 5 Department for Business Innovation & Skills, BIS Climate Change Adaptation Plan, March 20106 IPCC Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change 2007
Climate change facts over the last 20 years36% increase in global CO2 emissions 18 of the 20 hottest years on record
9% increase in average CO2 concentration in Earth’s atmosphere
Melting of ice sheets and thawing of permafrost in northern latitudes
An increase of 0.4–0.6 degrees Celsius in mean surface temperature relative to historical means (1951–1990)
Warming of ocean waters by nearly 0.5 degrees Celsius
Rapid diminishment of mountain glaciers in terms of annual mass balance
Global sea level rise of 2.5 mm per year from thermal expansion
Steady decline in the annual minimum extent of Arctic sea ice
Growing acidity of the world’s oceans threatening marine life
Source: Keeping Track of Our Changing Environment: From Rio to Rio + 20 (pdf)
Projected impact on increasing GHGs(click on image to download, slide 14/16) Contents and
How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:
About greenhouse gas
emissions and business
Section seven:IGD and sustainability
PAGE 1 OF 3
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section six: About greenhouse gas emissions and business
Source: Historical Overview of Climate Change Science, IPCC (pdf)
Although some greenhouse gases occur naturally in the atmosphere, the elevated levels (especially of carbon dioxide and methane) that have been observed by the Intergovernmental Panel on Climate Change (IPCC) are directly related, at least in part, to human activities such as the burning of fossil fuels and the deforestation of tropical forests.
Carbon dioxide (CO2) is the most widely known of the greenhouse gases contributing to global warming. It accounts for 85% of all greenhouse gas emissions in the UK. The other gases included in this ‘greenhouse gas basket’, as defi ned by the Kyoto Protocol are: methane (CH4), nitrous oxide (N2O), hydrofl uorocarbons (HFCs), perfl uorocarbons (PFCs) and sulphur hexafl uoride (SF6). (Source: UNFCCC). hydrofl uorocarbons, perfl uorocarbons and sulphur hexafl uoride are known as fl uorinated greenhouse gases (F gases). HFCs are the most common type of F gases and are mainly used as the refrigerant in air conditioning and commercial refrigeration systems.
The UK has both international (Kyoto Protocol) and domestic (UK Climate Change Act) targets to reduce greenhouse gas emissions. See the Regulation section for further details.
Global warming potentialEach greenhouse gas has a different global warming potential (GWP), a measure of how much a given mass of gas is estimated to contribute to global warming (greenhouse effect). The scale is relative and calculated over a specifi ed time, typically 100 years, comparing the given gas to the same mass of CO2 which is given a GWP of one.
Carbon dioxide equivalent (CO2e) is a universal unit of measurement used in reporting GHG inventories or footprints and to evaluate releases or avoidance of releases of different GHG against a common basis. It relates the GWP of any GHG, to the GWP of one unit of carbon dioxide. An example is one tonne of methane will have a CO2e of 25 tonnes (Source: IPPC). CO2e is sometimes abbreviated to just ‘carbon’. It is important to clarify what is meant when the term is used.
Impact within the UKThe latest projections for the UK show increases in summer and winter temperatures, increases in winter rainfall, decreases in summer rainfall (although small increases are also possible), more days of heavy rainfall and rising sea levels7.
Extreme weather and climate variability have already caused millions of pounds worth of damage to businesses. Many have been forced to close temporarily or permanently and the same can happen again if strategies are not developed to manage these impacts.
For example, the total economic costs of the summer 2007 UK fl oods are estimated at about £3.2 billion in 2007 prices, within a possible range of between £2.5 billion and £3.8 billion. Overall, around £2.12 billion of total economic costs were incurred by households and businesses. Damages to agriculture, associated with inundation of over 40,000 hectares, accounted for about £50 million of the total economic costs of the fl oods8.
In 2011, insurer Swiss Re reported the highest ever economic losses in history through natural disasters and man-made catastrophes – an estimated $370bn compared to $226bn the year before.
Illustration of the Greenhouse Effect(click on image to download)
PAGE 2 OF 3
Global Warming Potentials of GHGsGHG Chemical
formulaGWP for
100 years
Carbon dioxide CO2 1
Methane CH4 25
Nitrous oxide N2O 298
Hydrofl uorocarbons HFCs 124 - 14,800
Perfl uorocarbons PFCs 7,390 - 12,200
Sulphur hexafl uoride SF6 22,800Source: IPCC
Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:
About greenhouse gas
emissions and business
Section seven:IGD and sustainability
7 Summary of the Key Findings from the UK Climate Change Risk Assessment 2012, Defra8 The costs of the summer 2007 fl oods in England, Environment Agency January, 2010
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section six: About greenhouse gas emissions and business
Greenhouse gas emissions and the economy Organisations will increasingly need to take sustainability issues into the boardroom and factor them into strategic business planning.
There is a need for an economy that is more environmentally sustainable, that is more resilient to signifi cant changes to prices of fossil fuel and other natural resources, and that is well placed to take advantage of the massive business opportunities presented by the global shift to a green, low-carbon, resource-effi cient economy.
There is a strong and growing case for moving an organisation onto a more environmentally sound trajectory, due to regulatory requirements, cost savings and reputational issues.
Greenhouse gas emissions and the food and grocery industryAccording to Defra, the food and drink sector is responsible for approximately 20% of the UK’s greenhouse gas emissions. Energy savings in the sector therefore have the potential to make a signifi cant positive impact on total UK emissions.
Many companies within the food sector have taken steps to reduce their energy consumption, which, combined with the switch from coal to gas generation and/or renewable energy, means that signifi cant emissions reductions have been achieved. If the whole industry applied similar measures to those of the best companies, impressive GHG reductions will be achieved.
However, to go beyond that towards the reduction levels that are required by the UK’s Climate Change Act, there will need to be a systemic step change. Therefore, those companies that can start reducing their emissions now, will contribute positively to the UK’s carbon reduction plans.
The risks and opportunities organisations currently face Despite climate change posing a ‘substantial’ risk to major UK companies, fewer than half have contingency plans in place. That is the conclusion of research by the Carbon Disclosure Project (CDP), which conducted a poll of UK FTSE 100. The report found that while 80% of respondents identifi ed substantial risks to their business from climate change, just 46% said they had plans in place to protect against it. This highlights a real risk that many organisations are facing, but also shows the real opportunities available.
Risks and opportunities are strongly linked; many new business risks can also be seen as opportunities because there is a possibility of gaining competitive advantage through better strategic planning.
Successful businesses will need to ensure they are resilient to changes in climate, look at new technologies, business models and production processes, use resources and energy more effi ciently and respond to changing consumer demand. The transition to a green economy will bring a range of advantages to an organisation.
It can help organisations manage risks, such as those from increasing and fl uctuating fossil fuel prices and increase resilience, to the impacts of climate change and seize the opportunities from new and emerging markets, both nationally and internationally. Furthermore, organisations can save money through increased energy and resource effi ciency.
PAGE 3 OF 3
Did you know? The food industry accounts for about 14% of energy consumption by UK businesses and 7 million tonnes of carbon emissions per year.Defra
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The food system is a signifi cant producer of greenhouse gasesand must contribute to global mitigation efforts; immediate action on climate avoids the necessity of more radical measures in the future.
The Future of Food and Farming (pdf)g (p )
Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:
About greenhouse gas
emissions and business
Section seven:IGD and sustainability
Did you know? United Biscuits reduced its group wide carbon emissions by over 6%. In the UK energy used per tonne of product was down over 8%. UB has now reduced group wide energy use by a third since 1995.
The business case for reducing emissions To suggest amends/updates to content, email: [email protected]
Please give us feedback
Section seven: IGD and sustainabilityIGD’s Policy Issues Council (PIC) is a forum of industry leaders, broadly representative of IGD’s membership. It brings together chairmen and chief executives from the UK’s leading retailers, manufacturers, wholesalers, foodservice businesses and producers to address strategic challenges affecting the food and grocery supply chain. Sustainability is a priority for the PIC and IGD.
IGD’s Industry Sustainability Group (ISG) was established in 2009 following consultation with IGD members to help the food and grocery industry tackle key sustainability issues. This builds on the recognition of the need for the industry to adapt to a more resource-constrained world through the development of insight and good practice on sustainability issues.
This guide is the output from an ISG Working Group. The Working Group was tasked with developing a guide to help food and grocery businesses build sustainability issues into their strategic plans, focusing on greenhouse gases.
Companies that were part of the Working Group are listed below:
Industry Working Group members- Brakes- Kerry Foods Ltd.- Kraft- Nestle- Robert Wiseman & Sons Ltd.- Tesco plc- The Co-operative Group- United Biscuits (UK) Ltd.- Waitrose Ltd.
The guide was reviewed and critiqued by IGD’s ISG and a selected group of individuals, to ensure that the project delivered its objectives. ISG member companies can be seen below:
Industry Sustainability Group (ISG) member companies- ASDA Stores Ltd.- Bakkavor Group- Booker Group plc- Brakes Group- Coca-Cola Enterprises Ltd.- Compass Group plc- Dairy Crest Group plc- Greencore Group plc- H J Heinz Co Ltd.- Kerry Foods Ltd.- Kimberly-Clark Ltd.- Kraft Foods- Marks & Spencer plc- Musgrave Group- National Farmers’ Union- Nestle UK Ltd.- PepsiCo UK & Ireland- Robert Wiseman & Sons Ltd.- Sainsbury’s- Tesco plc- The Co-operative Group- United Biscuits (UK) Ltd.- Watrose Ltd.- Wm Morrison Supermarkets plc
IGD would like to thank the members of the Working Group for all their support and help.
We would also like to thank members of IGD’s ISG, along with the organisations and individuals that reviewed the guide during its development.
Further informationIGD has further information on sustainability on its sustainability website where you can access free articles, factsheets and case studies on a wide range of sustainability issues. Please visit the website via the following link for more information: www.igd.com/sustainability
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Contents and How to use this guide
About this guide
Section one: Regulation
Section two:Financial considerations
Section three:Reputation
Section four:The future
Section fi ve:Next steps and support
Section six:About greenhouse gas
emissions and business
Section seven:
IGD and sustainability
