The Guardian: Change is in the wind as business climate turns green

Campaigners sceptical about companies’ new-found enthusiasm for environment

Terry Macalister
Wednesday June 6, 2007

It could be any other business conference: the utilitarian hotel complete with piped music, the corporate sponsors with their stands outside the main speakers’ hall and the crowds of suits with pink shirts and “creative” ties.

But the men – and one soberly dressed woman – from Marks & Spencer, BSkyB and other names were not discussing information technology or shareholder value. They were there to discuss a subject that has raced up the corporate agenda: climate change.

If many executives were once in denial about global warming, the titles alone attached to those on the delegate list suggest things have changed. BT has its “head of climate change” present, Barclays Bank its “head of environmental management”, while the Association of British Insurers has sent its “climate change leader” to the event, organised by a newsletter publisher, Ethical Corporation.

“There has been interest from insurers and energy companies in climate change as an issue over quite a long time – for obvious reasons in that it quickly touched on their businesses,” says Charles Allison, a partner with the environmental consultancy ERM, a sponsor of the conference. “But what you have seen over the last six to nine months is that it has become a big issue for others, such as consumer brands.

“Different sectors have different drivers for taking this issue seriously. For instance, for companies like BT it’s all about their reputation with customers. The media are giving increasing emphasis to climate change and now the public wants the supermarkets and others it buys goods and services from to offer solutions that help them lead a better life,” he says.

Friends of the Earth welcomes any top companies taking the issue seriously but is sceptical about their commitment. “There are important changes taking place but only time will tell how many of the new corporate initiatives are really substantial and how much just brand enhancement,” says Tony Juniper, FoE’s executive director.

His scepticism seems confirmed by two surveys this week which showed climate change was still low in relative terms on big company agendas. One poll of business leaders undertaken for accountants KPMG by YouGov showed just 14% admitting to having a clear strategy for tackling the issue while many fund managers saw companies primarily motivated by a desire to get “the green fraternity off their backs”.

But the success of ERM alone illustrates there is an enormous growth of interest. The Oxford-based consultancy had 2,000 staff five years ago but has grown by 50% as it struggles to cope with the increased demand for its services.

“We used to be asked in to work for the environmental risk function of organisations but now we are speaking to the chairman or chief executive. And they are waking up to the fact that climate change is not just a risk but a possible opportunity too,” says Mr Allison.

Sally Uren, at the Forum for the Future charity, has a similar tale to tell of a business world changing in its more constructive approach. “There are very few in complete denial these days, although there are clearly still many who do not buy into climate change intellectually but can read the way the political landscape is moving,” she says.

Led by Jonathan Porritt, Forum for the Future works with many organis ations, including the Guardian Media Group, to help them towards a more sustainable business model. It says it is more concerned that companies genuinely do change than about the reasons why they do so.

Big oil companies were given an early warning on the growing importance of the environment more than 10 years ago when Shell decided it no longer needed the Brent Spar oil platform and moved to dump it at the bottom of the North sea. The ensuing confrontation with Greenpeace forced it into a painful retreat and triggered a commitment to corporate social responsibility.

BP also realised its ability to continue with unsustainable oil and gas production would require it to convince politicians and the public that it was committed to a wider green agenda – hence its commitment to go “beyond petroleum” and move into renewable energy.

Both of them dropped out early from the Global Climate Coalition, which had argued against restrictions on carbon producers and claimed human responsibility for planetary warming was at least unproven, if not a fallacy. ExxonMobil has not been so fast. Its perceived antagonism to the Kyoto protocol limiting carbon emissions and its funding of research groups seen as against green regulations led to it being targeted as an enemy of progress, an image it has belatedly tried hard to shrug off.

Others heavily dependent on hydrocarbons, such as car companies, have also been trying to green their agendas with high-profile initiatives on fuel efficiency, none more effective than the hybrid (electric/petrol) engines developed for the Prius model by Toyota.

Consumer product groups such as Unilever have also worked hard to provide details of – and find initiatives to reduce – their carbon dioxide emissions.

The financial institutions have been slower to join the bandwagon, as they have a relatively tiny carbon footprint. The Co-op is serious about its ethical profile, while the odd mainstream bank has gone out of its way to highlight how it is investing in renewable energy. HSBC boosted its green credentials by pledging to donate $100m (£51m) to four climate change charities, including WWF and the Earthwatch Institute, over the next five years – the largest charitable donation by a UK firm.

But some of the biggest new green evangelists come from the retail sector, with the much-maligned supermarkets taking a lead. After years of taking flak over its labour practices, Wal-Mart, the owner of Asda, has taken evasive action, trying to prove itself a responsible company by committing itself to using 100% renewable energy, reducing waste and selling more sustainable products.

In the middle of a regulatory probe into whether anti-competitive practices are going on in British supermarkets, barely a week goes by without some new “green” initiative.

Some environmentalists still believe only a tiny minority of companies are really moving on the issue and say there is often a huge credibility gap between what operators such as Shell say they are doing and the way they are perceived by, say, residents living alongside their refineries in developing countries.

“It’s easy to make unsubstantiated claims in your…western host country,” says Mr Juniper. “We want to see firm targets for reducing greenhouse gas emissions by 3% a year underpinned by binding legislation so that we do lift up the baseline where the vast majority of companies are not engaged at all.”

Boycott threat

Almost three in four British families would boycott firms that do not take real steps to cut their environmental impact, according to research to be published this week.

More than half were sceptical about firms’ commitment, believing they made only superficial changes to win public favour. The findings were revealed in the study by MPG, part of Havas, one of the world’s largest advertising agencies. It shows how green issues have risen up the domestic agenda: two in three families said they were worried about the impact of the packaging or the products they buy.

Nearly all those polled said they were “very concerned” or “a little concerned” about the impact of their purchasing decisions on climate change, with 59% saying they had only recently woken up to the importance of the issue. Their increasing fears mean that 57% now believe that airlines should not be offering free flights.

Eco initiatives

Eurostar plans energy meters on trains, controls to reduce energy consumption from lighting and heating, electricity sourced from green companies and better use of train capacity.

Marks & Spencer’s £200m, 100-point plan includes recycling hangers, stopping sending waste to landfill and selling more locally sourced food.

HSBC pledged $100m to four climate-change charities. Also urges customers to adopt green business practices.

Barclaycard’s green credit card – Barclaycard Breathe – offers discounts on green products and transport.

BSkyB set-top boxes will go into power-saving “deep standby” after 11pm if sitting idle.

BP will continue with its Beyond Petroleum strategy which will see £4bn invested in alternative energy.

http://business.guardian.co.uk/story/0,,2096194,00.html

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.