The Verdant 360 Blog

With the release of his new budget, President Obama has reinforced his commitment to reduce Greenhouse Gas Emissions (GHG)’s. Although the mechanisms for quantifying and report  GHG emissions are still being debated, we are clearly moving in the direction of carbon footprint reporting. This is setting the stage for a true cap and trade scenario. According to his budget, Obama is projecting that cap and trade will amount to $300 billion in tax revenue by 2022 and that by 2012 the cap and trade program will begin to have budgetary impact.

What this all means for business leaders is that we will need to be prepared to address this scenario. Although 2012 seems a long way off, particularly given the current economic challenges, the complexity of the issue is such that we need to prepare now. Indeed House Energy and Commerce Committee Chairman Henry Waxman has brought forth legislation which he vows to have approved by Memorial Day that will limit carbon emissions. The Bill entitled The Safe Climate Act of 2007 (H.R.1590) has set very specific targets.

The Safe Climate Act freezes U.S. greenhouse gas emissions in 2010, at the 2009 levels. Beginning in 2011, it cuts emissions by roughly 2% per year, reaching 1990 emissions levels by 2020. After 2020, it cuts emissions by roughly 5% per year. By 2050, emissions will be 80% lower than in 1990. These goals are comparable to emissions reduction goals adopted by many states and called for by leading American companies, small businesses, religious organizations, environmental advocates, and others

The bill is supported by GE’s Jeffrey Immelt and Duke Energy’s Jim Rodgers both of whom endorsed the legislation at a session with the committee in January and lays the groundwork for a cape and trade program.

It is not surprising that many business leaders are not focusing on the issue of trade at the moment. Given that many businesses are simply striving to survive the current economic crisis, it may not seem a priority. However, the fact remains that should the legislation pass as promised by Memorial Day, it leaves businesses 6 months to quantify there 2009 carbon footprint and prepare to meet or lower them for 2010. Building on the assumption that the economy turns around and economic activity increases, businesses will almost certainly have to have a plan to lower emissions just to meet their 2009 emissions.

-FR

Carbon Footprint cap and trade, Carbon Footprint, carbon offsets, GHG's, green

One of the biggest challenges I face when discussing supply chain sustainability is dealing with what I call “the big misconception.” That is, the perception among many business leaders that sustainability is a high cost low return investment. I believe, however, that the opposite is increasingly the case. By focusing on the positive return on investment and clearly identifying return opportunities, it can be demonstrated that direct ROI benefits can realized through:

• Operational Efficiencies
• Material cost reductions
• Recycling materials
• Carbon Footprint reduction
• Carbon Offsets
• Increased sales
• Increased partnering opportunities

Understandably in the current business environment any additional business expense will and should be scrutinized. But  given the enormous challenges associated with our planet’s growing population and the desire for much of that population to strive towards affluence, we must recognize that business as usual is a recipe for disaster.

The positive for business leaders is that there is tremendous opportunity for those who can innovate, implement and execute sustainable supply chain solutions. Sustainability is at it’s core about the efficient allocation of resources. Reducing carbon footprint across the supply chain potentially has direct bottom line benefits. Inherently, if you use less energy you spend fewer dollars. Not withstanding the current low energy prices, energy costs will rise and as they do the benefits associated energy efficiency will grow. Additionally due to increasing awareness many companies are making demonstrable sustainability plans a requirement for their business partners.

As business leaders it is incumbent on us to do what is right for our companies, our shareholders, our employees and our customers. Increasingly many business leaders are recognizing we need to extend this to our communities, locally and globally. By recognizing that the supply chain benefits realized through a well executed sustainability plan do indeed extend to shareholders, employees, customers and communities, we are demonstrating true business leadership.

In upcoming posts I will present profiles of a number of business leaders who have demonstrated just such leadership and show how they have demonstrated benefits that strike directly to the bottom line and beyond. -FR

Supply Chain Carbon Footprint, carbon offsets, recycling, Supply Chain, Sustainability