Why your business should reduce its carbon footprint now

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The question comes up all the time.
Why should my business care about reducing their carbon footprint now?
I asked the question to a room full of climate change experts at the Carbon Collaborative Leadership Forum at the offices of Hanson Bridgett on Tuesday night.

Everyone understands the “it’s the right thing to do for the planet” argument. You know, the one that does nothing to address trivial things like shareholders and bottom lines and the recession.

While the problem of climate change is an urgent one, convincing companies to make heavy investments into measuring their footprint, including along their supply chain, energy efficiency improvements and others, it’s a tougher sell now as corporations are facing layoffs, scale-backs and declining revenue, and before the state or the country has rolled out mechanisms that will cap emissions and effectively put a price on carbon.

For companies in transportation, utilities and fuel refiners and distributors that will be capped, it makes sense to start trying to reduce emissions now, so they don’t face huge upfront investments when and if cap and trade is implemented.

“To the extent that companies might take early action now, their operating costs and cost of compliance will be lower,” said David Pascal, the green business and clean technology advocate for San Francisco.

But there’s a case to be made that a wait-and-see approach by companies that aren’t in the industry groups being capped and don’t rush to reduce now could pay off.

See, utilities’ emissions will be capped under the current plan for California’s climate change legislation and under the federal version being debated in Congress now. Utilities will likely have to incent their rate payers to reduce emissions so the utilities can meet those caps and avoid having to buy emissions credits.

Amy Zimpfer, head of the Air Division of the US Environmental Protection Agency Region 9, said energy savings alone should spur companies to look at reducing today even if they won’t be forced to in the future.

She said return on investments into energy efficiency technologies are averaging about three to five years. That means the sooner a company invests, the sooner it will start saving money in energy costs. It will depend on the size of the savings and the size of incentives if an early action strategy pays off and “that’s a tradeoff that people are going to have to gauge.”

Franki Ridolfi, who works for San Francisco-based climate change consultancy Climate Earth, said he’s heard a more compelling argument. Countries who don’t have the luxury of relying on the oil resources the United States has secured are already working on their strategies to cut fossil fuels, which account for lots of greenhouse gas emissions, from their products and supply chains.

And the way the world is heading, the lowest footprint, least energy-consuming products will become the global standard. We’re already seeing that with major retailers like WalMart deciding shelf space based on which product are most sustainable.

“This is totally about the competition,” Ridolfi said. “If companies don’t take early action, they will go out of business.”