BUSINESS STANDARDS
is the quarterly magazine of BSI Group, highlighting the vital role that standards play in today's business environment. Regular features include interviews with leading business figures, as well as news on the latest developments in management systems and standards.

Business Standards > Articles

Verifying a green future

28 May 2008
Topics: Carbon footprint, CFV, GHG, Environment, Carbon market

Do even a small amount of research into global warming and the statistics can be unnerving. For instance, the UN's Intergovernmental Panel on Climate Change (IPCC) has calculated that the Earth's atmospheric CO₂ concentration is now at a 650,000-year high of 380 parts per million. The IPCC goes on to predict that by 2050, without intervention, this concentration will exceed 500 ppm - the assumed "sustainability threshold" for life on our planet.

The experts further predict that the consequence of rising emissions will be a global average surface temperature increase of between 1.4°-5.8°C by the end of the century - climate change that will bring in its wake flooding, drought, wildfires, insect plagues and sea level rises. A temperature rise of between 1.5°-2.5°C alone is predicted to risk extinction for up to 30 per cent of the plant and animal species on Earth, a scenario that many scientists define as "likely".

Meanwhile, far from slowing down, global CO₂ emissions are rising faster than ever before. Between 2000 and 2005, emissions grew four times faster than in the preceding 10 years.

Changing climate of opinion

As a consequence of these chilling statistics, the climate of opinion is shifting and driving profound changes in the expectations that we all have of governments and businesses. This is bringing increased regulation and driving the voluntary adoption of greenhouse gas (GHG) management by organizations (and individuals) not yet obliged to do so.

What then is the business case for voluntarily quantifying and reducing emissions? For Hewitt Roberts, BSI's director of sustainability and author of BSI's new White Paper on carbon footprinting, the drivers begin with understanding what's truly happening.

"We're at the beginning of a transformation on a par with the Industrial Revolution," says Roberts. "This brings with it risk and opportunity, and winners and losers. I believe those who position early for survival stand a far better chance of seizing the opportunities presented while those who wait and wonder will likely find their ambivalence quite costly."

Quite what that ambivalence might cost may be gauged from one calculation, based on the value of a tonne of CO₂ multiplied by the amount of CO₂ that needs to be removed from the atmosphere by the end of 2012. This sum puts the notional opportunity to be worth around $1 trillion. The EU Emissions Trading Scheme alone traded 1.6 billon carbon allowances in 2007, with a total market value of € 28 billion. Roberts says: "Businesses are only just beginning to wake up to the economic opportunities, which are considerable."

A related driver is risk management and, in tandem, the demands of the investment community. As BSI's White Paper outlines, according to the Carbon Development Project: "The global investment community is at an unprecedented level of awareness concerning the competitive and financial implications of climate change."

Bjorn Stigson, president of the World Business Council for Sustainable Development, adds: "An increasing number of companies are responding by completing GHG inventories, quantifying their emissions, reporting GHG emissions and setting GHG emissions reduction goals."

The SME and GHG verification

All of which seems to apply to the very big fish: large corporations with shareholders, global reputations, wide ranging risks and relationships to cultivate with financial institutions. That said, for Hewitt Roberts even SMEs stand to gain a great deal from quantifying and reducing their GHG emissions and, furthermore, having the ability to declare an assured, accurate GHG inventory or "carbon footprint" for their business operations through voluntary Carbon Footprint Verification (see page 8 for more information on BSI's CFV scheme).

According to Roberts, in the near term, regulation is unlikely to hit SMEs unless they are huge energy users, and shareholder pressure is moot, where there are none. However, he says: "If you supply to anyone who is regulated or who is feeling the pressure from stakeholders or investors, then SMEs will likely themselves also feel that pressure either imminently or eventually. The other big driver for SMEs is their ability to gain PR advantage by becoming either carbon neutral or at least GHG management savvy." SMEs are also likely to benefit from first-mover advantage, better staff morale and, in some cases, early action credits and concessions.

Another reason is cost benefit, Roberts says: "If you aim to reduce GHG emissions, you will by definition also be reducing cost. For those with energy as a significantly high proportion of their operating expenses, there are huge benefits proportionately for a small business."

A final reason to manage emissions is perhaps the most compelling of all. As Roberts puts it: "Poor environmental management isn't necessarily going to spell the immediate demise of the entire planet, whereas poor GHG management is likely to put us in a situation, globally speaking, whereby we cross the threshold and become entirely unsustainable."

BSI's White Paper, The Growing Importance of Carbon Footprinting and Carbon Footprint Verification, can be downloaded at www.bsigroup.com/may08whitepaper

>>CASE STUDY: GHG Emissions Regulation

The EU's Emissions Trading Scheme and the UN Clean Development Mechanism are already in place to reduce greenhouse gas (GHG) emissions from the most polluting industries and to enable Kyoto signatories to achieve their GHG reduction commitments. Also in June 2007, Defra launched the Carbon Reduction Commitment to reduce emissions in approximately 5,000 large UK businesses and public sector bodies. Similar legislation is imminent in Canada, Australia, New Zealand, South Korea and Taiwan. Four regional initiatives are already in place in the US, with 11 State bills currently before the US Congress. Finally, since Barack Obama, Hilary Clinton and John McCain publicly advocate cap-and-trade emissions regulation, US Federal legislation is likely on the horizon.

For more information: www.bsigroup.com/may08ghg

>>CASE STUDY: Products and services

Every product and service has a carbon footprint - from the production of raw materials to manufacturing, distribution and retail processes, to end use and disposal. Working with the Carbon Trust and Defra, BSI British Standards is publishing PAS 2050 Specification for the assessment of life cycle greenhouse gas emissions in goods and services. This standard will enable a consistent and comparable approach to the assessment of embodied GHG emissions from products and services across their lifecycle. It will help companies understand the climate change impacts of their products and highlight opportunities to cut carbon emissions.

For more information: www.bsigroup.com/may08pas2050

Business Standards © 2008. Editorial produced by Caspian Publishing in association with the British Standards Institution. Editorial opinions expressed on are not necessarily those of BSI Group or Caspian Publishing. Neither Caspian Publishing nor BSI Group accept responsibility for advertising or editorial content, nor for that appearing on linked third-party websites. Reproduction in whole or in part is forbidden without written permission from BSI Group or Caspian Publishing.

Question: Does business really need an integrated management systems standard?

Integrate or disintegrate - which would you choose? Some ten years ago the environmental standard, ISO 14001, was born and there are now over 100,000 organizations registered to it worldwide.

Read more

Have a standards-related question for BSI or a comment on the website? We'll find the right person to answer.