Global recession gives boost to corporate energy-efficiency drives

The global recession is having a mixed effect on climate-change efforts within business: spurring on cost saving energy efficiency projects, but slowing deeper changes, according to a major new research report from the Economist Intelligence Unit. Almost three-quarters (73%) of firms polled will make energy efficiency a high or moderate priority over the next two years in a bid to cut costs. However other climate-change initiatives will receive less attention: overall, two-thirds (67%) think climate change will fall down the corporate agenda as the global economic crisis continues.
The report, which is sponsored by the Carbon Trust, KPMG, SAP and Shell, investigates the current policy outlook within key regions of the world and the prospects for change within the marketplace. The research is based on a policy overview from the Economist Intelligence Unit’s Country Analysis division, a global survey of 538 senior business executives, and 18 in-depth interviews with relevant executives and experts. It was launched at the 2009 Sustainability Summit in London, a major annual event hosted by Economist Conferences, recently.
Determining precisely the impact of the current global recession on the climate-change efforts of both business and governments is difficult, with countervailing forces at work. At a business level, executives will increasingly see carbon emissions as a new indicator of inefficiency—and a sharp drop in business activity will reduce demand for energy, thereby cutting emissions in the short-term. Forty percent of executives surveyed also say their firms have developed new products or services in the last two years in order to reduce or prevent environmental problems.
“The Copenhagen conference in December will be a crucial time for climate-change negotiations. But set against a backdrop of significant economic stress, a key question will be to what degree concerns about the economy will weaken any possible progress,” comments Robin Bew, Editorial Director of the Economist Intelligence Unit. “This report shows that, although businesses will necessarily switch focus to survival mode, many firms are starting to embrace some of the short-term cost benefits of energy efficiency. A significant minority are also discovering longer-term business opportunities relating to climate change.”
Other key findings from the research include:
* More than one-half of companies polled have established some kind of climate-change strategy, although most simply consider energy efficiency. More than one-half (54%) of executives polled for this report say that their companies have a coherent policy in place to address climate change, although the scope of these policies varies widely. For most, attention centres on energy efficiency: 62% have implemented some degree of improvement in this area over the past two years—far ahead of all other actions. This will remain the focus going forward. More generally, actions tend to concentrate on core internal activities and facilities, rather than involving suppliers, business partners and customers.
* Real adaptation to climate change is out of the sights of most firms right now. Seventy-five percent of respondents agree that companies as a whole have been slow to prepare for the long-term impact of global warming on their business. This is particularly the case in terms of the risk management aspect of climate change, such as assessing supplier vulnerability or ensuring business continuity. Nevertheless, 24% have made some degree of preparation for possible disruptions to operations, and 18% have worked to increase the resilience of their supply chains.