CSA Standards, a leading developer of standards, codes and personnel certification programs, and the International Performance Assessment Centre for Geologic Storage of Carbon Dioxide (IPAC-CO2 Research Inc.) this week announced a joint agreement to develop Canada's first carbon capture and storage (CCS) standard for the geologic storage of industrial emissions. The CCS standard will be developed by leading North American experts and, upon completion, will be submitted to the Standards Council of Canada for recognition, making it the world's first formally recognized CCS standard in this area. It is intended that the new standard will then be used as a basis for the promotion of international standards through the International Organization for Standardization.

"CSA Standards welcomes the opportunity to work with IPAC-CO2 to help facilitate and support the growth of Canadian and international best practices, standards and tools for the mitigation of risk in the geologic storage of carbon dioxide," said Bonnie Rose, president, CSA Standards. "This cooperative process will help provide for and advance global expertise in the risk assessment of geologic CO2 storage projects. This new standard means that Canada can be a world leader in carbon capture and storage, and we hope that the world will embrace our approach."

This new standard will provide essential guidelines for regulators, industry and others around the world involved with scientific and commercial CCS projects. Coal, natural gas and oil will remain the world's dominant sources of energy over the next several decades continuously adding to global greenhouse gas emissions. On a global scale, approximately 31 billion tons of CO2 are emitted per year into the atmosphere. The International Energy Agency (IEA) has urged a quick and global push to develop and deploy CCS technologies to mitigate greenhouse gas emissions.

"This is one small but very important step for us to gain public and regulator confidence in the geologic storage of CO2 as a sustainable energy and environmental option," said Carmen Dybwad, chief executive officer of IPAC-CO2 Research Inc. "We're very excited to work jointly with CSA Standards, a not-for-profit membership-based association which has served industry, government and consumers in Canada and the global marketplace since 1919."

CCS is a process consisting of the separation of CO2 from industrial and energy-related sources, transport to a storage location and long-term isolation from the atmosphere. Scientists estimate carbon capture units can be used to reduce emissions from industrial plants by 85 to 95 per cent. CCS is recognized as a key way to mitigate greenhouse gas in the atmosphere. It can also be used commercially to assist in oil recovery projects. The new standard will focus primarily on the long-term geologic storage of CO2 deep underground.

"We welcome this important initiative," said Paal Frisvold, project leader of the Bellona Environment CCS Team. "This is the first of its kind in the world and will become a key contribution to designing policies and mechanisms to enhance the acceleration of CCS deployment in other parts of the world."

The Bellona Foundation is an international environmental NGO based in Norway. Founded in 1986 as a direct action protest group, Bellona has become a recognized technology and solution-oriented organization with offices in Oslo, Brussels, Washington, D.C., St. Petersburg and Murmansk.

Large-scale international CCS research pilot projects are being tested and studied in various areas of Canada and the world. Significant projects have been underway in Saskatchewan and British Columbia for several years. A top priority for CCS research is the confirmation that geologic CO2 storage is safe, reliable and an environmentally beneficial practice for the long-term. Although research projects have been underway for several years, currently there are no formally recognized national or international standards for the long-term storage of CO2. Standards are needed to help ensure risks are identified and addressed.

CSA Standards has extensive experience in developing international environmental and carbon dioxide management standards. On behalf of the Standards Council of Canada (SCC), CSA Standards manages the Secretariat for the committee that developed the ISO 14000 environmental management and ISO 14064 climate change standards.

IPAC-CO2 Research Inc. is designed to meet a public and regulatory need in the global CCS chain by providing an independent performance and risk assessment of geologic storage of carbon dioxide. Carbon capture and storage technology has been identified by the UN Intergovernmental Panel on Climate Change as one of the most promising near-term technologies for the rapid reduction of global CO(2) emissions.

www.csa.ca
www.ipac-co2.com

Partners in Project Green recently announced the launch of its Carbon 101 Reduction Program. The goal of the program is to assist companies in completing their greenhouse gas (GHG) baselines, identifying reduction strategies, and developing implementation plans.

In order to assist companies in achieving these goals at a reduced or no cost, the following tools have been developed:

• Carbon 101 Training - in this new and evolving field, getting a handle on the ins and outs of GHG emissions, reporting standards, accounting methods and reduction strategies can be daunting on your own. Partners in Project Green Carbon 101 Training sessions can help make sense of it all, and start you on your path to GHG reductions.
• Carbon 101 Training Videos - while being able to attend the training sessions in person is the ideal choice, it may not always be possible, so Partners in Project Green has made the training available via video.
• Carbon 101 Guidebook - this guidebook can be used on its own or in conjunction with the Carbon 101 Training to provide a solid base for understanding and moving forward with your GHG inventory and reduction strategy.
• Case Studies - often the best teachers are the ones that have gone before. Look to other Partners in Project Green businesses who have started their carbon reduction programs to discover lessons learned, best practices, and tips on how to complete your own.
• Reporting Template - this excel based tool allows companies to calculate their GHG emissions.
• Reporting and Reduction Strategy Template - this .pdf based tool allows companies to create a GHG reporting and reduction strategy
• Enterprise Carbon Management Software Selector Survey - Enterprise Management Software allows for GHG monitoring, management, and reporting, helping companies ensure the accuracy and validity of their GHG accounting and can keep you on track with your reduction strategies. In order to assist in selecting the right ECM provider for your organization, Partners in Project Green has developed the ECM Vendor Selection Survey and Database.
• Consultant Roster - for those who wish to utilize outside assistance, Partners in Project Green has developed a list of carbon reduction consultants that can help develop company baselines and reduction strategies.

All of these tools and upcoming training dates can be accessed at www.partnersinprojectgreen.com/carbon101.

With prospective climate change legislation and policy discussions in the United States and Canada, intensive international negotiations culminating later this year, and ongoing stakeholder interest, companies are scrambling to develop or boost their climate change strategies. For heavy manufacturers, it is now clear that climate change regulation would have a significant impact on business. The US Environmental Protection Agency’s mandatory reporting under the Greenhouse Gas (GHG) Rule and the Ontario draft Greenhouse Gas Emissions Reporting regulation and guideline now have a reporting threshold of 25,000 tonnes from combustible emissions per facility.

The definition of facility
As defined in the Regulation, a facility means all buildings, equipment, structures and stationary items that are owned or operated by the same person or entity and are located either (a) on a single site; (b) on two or more integrated adjacent sites; or (c) on two or more non-adjacent sites, if the activities carried out at all of the sites consist of:

• Natural gas storage, transmission or distribution
• Oil or gas production or processing
• Oil transmission
• Electricity transmission

How much is 25,000 tonnes?
25,000 tonnes is equivalent to emissions from annual energy use of about 2,200 homes. It is also equivalent to just over 58,000 barrels of oil consumed or 131 railcars’ worth of coal.

How do I know if my facility is over the threshold?
It is recommended that a carbon audit be conducted. This is a cost effective way of measuring and recording the CO2 emissions of a facility or organization. A carbon audit is also the first step in building an effective carbon strategy.

Those most likely to be affected
Although the regulation will apply across a broad range of industry groups, the following industries are most likely to be affected by the new emissions reporting obligations:

• Heavy Manufacturing
• Extractive industries and metals production
• Electricity generation
• Pulp and paper production
• Refrigeration industry
• Petroleum industries
• Chemicals manufacturing

The importance of measurement
Comprehensive monitoring and measurement is required under both regulations. Such data will play a key role in establishing the historical "baseline" emissions of various industry segments. Organizations will need to carefully assess their emissions at the facility and asset level to ensure that they in fact trigger a mandatory monitoring requirement. They should also consider the potential importance of establishing an accurate historical baseline and the potential long-term implications of understating those emissions.

The opportunity
Nearly a third of the world’s energy consumption and 36% of carbon dioxide (CO2) emissions are attributable to manufacturing industries. The large primary materials industries, i.e., chemical, petrochemicals, iron and steel, cement, pulp and paper, and other minerals and metals, account for more than two-thirds of this amount. (Material is sourced from the International Energy Agency 2007, Tracking Industrial Energy Efficiency and CO2 Emissions. http://www.iea.org/Textbase/npsum/tracking2007SUM.pdf)

Overall, industry’s use of energy has grown by 61% between 1971 and 2004, showing that substantial opportunities exist to improve energy efficiency and reduce CO2 emissions. These significant savings potentials can also bring financial savings. Improved energy efficiency contributes positively to energy security and environmental protection.

Resources wasted equals profits lost. Whether that waste comes in the form of a pile of unusable scrap metal on the assembly line or as excess heat in a manufacturing facility, it is inefficiency in business operations, and where there are inefficiencies, there is room for improvement.

Linking carbon metrics to asset management
It is important that an organization links ongoing asset management to energy and carbon metrics. This will ensure the organization:

• Reduces energy costs and eliminates service outages by identifying and eliminating energy inefficiencies in operations
• Identifies and replaces those assets that are most inefficient and have the largest carbon impact
• Prioritizes asset purchase decisions that have the best return on investment and carbon reduction
• Remediates energy issues by taking action on energy issues
• Links energy metrics with asset information to manage energy as a part of service management processes, such as condition monitoring and maintenance

Supply chain
For many organizations, the most important carbon risks and opportunities may lie outside of their owned operations. Between 40 and 60 percent of manufacturers’ carbon footprints often lie in their supply chains. It’s important for companies to realize that carbon regulation may have significant implications for supply chain costs in carbon- and energy-intensive industries.

So today, we’re announcing that we will lead the creation of a Sustainability Index. The Index will bring about a more transparent supply chain, drive product innovation and, ultimately, provide consumers the information they need to assess the sustainability of products.

If we work together, we can create a new retail standard for the 21st century.

— Mike Duke, President and CEO of Walmart, Sustainability Milestone Meeting, July 16, 2009

Background
Cap and trade, also known as emissions trading, is a market-based mechanism that will reduce GHGs as well as facilitate operational efficiency, technological innovation, economic growth and job creation. In a cap and trade system, the government sets a limit or cap on the total amount of GHGs that can be emitted from regulated facilities.

The Ontario Government has been working with other North American jurisdictions to develop an integrated approach to emissions reporting and cap and trade. In June 2008, Ontario signed a Memorandum of Understanding with Québec to collaborate on a regional cap and trade initiative. Last year Ontario also joined the Western Climate Initiative (WCI), a consortium of seven US states and Québec, Manitoba and British Columbia, whose aim is to reduce GHG emissions independently of their federal governments.

On September 22, 2009, the EPA introduced the United States' first GHG reporting system, which is due to take effect on January 1, 2010. Earlier this year the Obama administration introduced the American Clean Energy and Security Act to establish a cap and trade system. Also known as the Waxman-Markey Bill, it was passed by the House of Representatives on June 26, 2009, and is now awaiting debate in the Senate.

The transition to a low-carbon economy will bring challenges for competitiveness but also significant opportunities for growth. Carbon management is a core element of preparation for the new economic environment. Ignoring climate change or the carbon agenda will damage economic or business growth. Addressing energy usage and GHG emissions is a pro-growth strategy whose cost is proportional to the timing of actions. The internalization of carbon as a critical factor in economic growth is a unique challenge — and one which we urge all manufacturers to take seriously.
— The New Age of Carbon - Stephen Stokes, Kevin O'Marah


Where to start
Where does an organization start? We encourage taking small steps. It is important that an organization sequence projects properly and find those that have pay back in the short-term. Do things you can do quickly and build momentum, rather than get bogged down on big projects. Take the savings and invest it in future projects. Those steps may include creating a:

• Carbon Audit
• Energy Audit
• Product Footprints
• Strategy that integrates; carbon, energy and sustainability

Julie Matthews is Director, Carbon Advisory Services Group, for e3 Solutions Inc www.e3solutionsinc.com. e3 Solution’s industry-leading software and services helps top organizations across North America measure, monitor and verify their environmental and carbon footprints. Linking the utility room to the boardroom, e3’s Enterprise Carbon Management software delivers the comprehensive greenhouse gas monitoring, management and reporting capabilities today’s organizations need.

In March 2009 on the Green Business website, we posed the question, “Is carbon disclosure still relevant in a volatile economy?” The answer was a firm “yes.” At the time, environmental concerns may have been muted by more pressing issues, but legislators were continuing to push for regulations to reduce our carbon footprint. 

Only a few months later, signs of economic recovery suggest that the transition to clean and green will proceed at a faster rate than ever. Businesses—particularly those in the power, oil and gas, cement, chemicals, mining, smelting and refining, steel, and pulp and paper sectors—are anticipating mandatory climate change disclosure requirements, and many are getting ahead of the curve with voluntary reports. In Canada, an important deadline is quickly approaching. According to the federal government’s latest plans, the first reporting period starts in 2010 and the first trial compliance period starts in January 2011. 

The Canadian government’s new regulations will specify what reduction targets reporting companies will be required to achieve. As a direct result, all compliance and financial risks will need to be reflected in the Management Disclosure and Analysis (MD&A) and in financial statements on a quarterly basis where material. These statements will in turn require audit and/or disclosure committee sign-off and have implications for corporate governance. 

The good news is that best practices are quickly developing, and the opportunity to make proactive climate change management a competitive advantage is gaining ground. In this article, we’ll discuss the companies most likely to be impacted, the general reporting requirements, and the specific activities that organizations in the targeted sectors should now be undertaking.

Complex reporting requirements
If you operate in one of the above-mentioned sectors, you may be aware of the future reporting requirements, but unsure whether your company qualifies. The Canadian government announced on July 15, 2009 that the minimum threshold for greenhouse gas (GHG) reporting under the National Pollutant Release Inventory program in 2010 will be lowered from 100,000 to 50,000 tonnes. For industrial operations, there is a direct link between production data and the vast majority of emissions. It is broadly anticipated that the threshold will be eventually lowered to 25,000 tonnes annual emissions to align with the U.S. standard, which will include virtually all commercial scale facilities.  To complicate matters further, regulations exist at a variety of levels: federal, provincial/territorial, bi-national as in North American agreements, and multi-national as in COP15 Copenhagen.

The issue of carbon regulation is not going away—in fact, the opposite is true. Compliance is looming, and it will likely be a complex exercise impacting data collection, information systems, and verification procedures. To prepare for this new reality, companies in the currently identified sectors should have a strategy in place. They should be examining their carbon footprint, reviewing their disclosure policies, and assessing their information management systems. As the various regulatory regimes have the potential to conflict, overlap, harmonize—or even disappear, they need to understand the full range of possibilities and which options are critical to their operations. It may seem like a daunting to-do list, but the roadmap has been written and help is available. 

A comprehensive approach to climate change disclosure
Assuming the Canadian government stays on track with its timetable, companies will need to quantify carbon risk in their fiscal 2011 MD&A—just over a year away. Their approach to disclosure should be supported by a robust (ideally automated) climate change management and measurement regime that extends across the business, integrates with existing reporting systems, and covers other partner organizations in the supply chain.

They should also look for opportunities to tie carbon data into existing business intelligence and enterprise resource planning systems, given the likelihood that regulatory information will need to be integrated with financial statements. Systems that allow organizations to aggregate their carbon positions and prepare consolidated reports will be invaluable, particularly if they are required to report on a quarterly basis.

The disclosure requirements now facing large industrial emitters may quickly become a reality for other Canadian companies. While the extent of these changes is still unclear, preparing in advance is prudent. To do so, companies should adopt the following elements of an effective disclosure regime:

• CEO leadership commitment to carbon disclosure and transparency: The tone from the top is critical to communicating the importance of full and accurate information disclosure across the organization and to key stakeholders.
• Disclosure committee: All climate change related issues and associated plans for disclosure should be discussed with and presented to the disclosure committee. Where such a committee doesn’t exist, someone in a position of authority needs to be held accountable for approving the disclosure.
• Carbon governance: In order to ensure accuracy, consistency and integrity for disclosure purposes, there must be a clear understanding of roles and responsibilities. All staff with a role to play in carbon emissions information tracking, collection, measurement, and reporting can then be held accountable for achieving related goals and objectives within their control.
• Carbon information management system: Over time, leading organizations may want to implement a carbon information management system that produces timely reports and forecasts on demand. In addition to vastly simplifying disclosures, the existence of a robust carbon information management system can help companies meet their financial audit and/or emissions assurance requirements, as well as support management reporting needs.
• Disclosure controls and internal controls: Effective climate change disclosure requires the development of internal and disclosure controls to assure the integrity, accuracy, and verifiability of performance information. If companies are using spreadsheets to report actual emissions, additional focus on internal controls will be required. To promote efficiency, such controls should be integrated into an organization’s existing governance framework.
• Third-party verification: External audit of reported information and the carbon data management process as a whole is important to assure companies, regulators, investors, and other stakeholders of disclosure credibility. In some jurisdictions, external verification of emissions reduction will be required to participate in cap-and-trade markets.

Challenges and risks of disclosure
Sufficient standards and interpretative guidance—including forthcoming information from the Canadian Institute of Chartered Accountants (CICA)—exist today for companies to properly disclose on material climate change risks, carbon assets and liabilities, and climate change risk management practices. These can address the challenges of getting started by:

• Determining the ‘materiality’ of climate change
• Deciding how to account for carbon assets and liabilities
• Assessing the aggregate impact of climate change
• Developing and describing climate change and carbon strategy

The variety of channels available for organizations to disclose information adds to the confusion—what must we do, and what should we do? Best practices suggest that more is better than less: key stakeholders such as investors and business partners want a full sense of a company’s risk exposure and positioning on this issue. As the linkage between environmental management and overall management becomes better correlated through indices such as the Dow Jones Sustainability Index (DJSI), effective participation in initiatives such as the Carbon Disclosure Project will become more important.

However, disclosure does introduce new risks, such as inconsistent information being released through various channels and the potential for its misuse. Additionally, the Canadian regulations as currently proposed will be part of the Canadian Environmental Protection Act (1999), which has sanctions for non-compliance under the Criminal Code.  If penalties are not covered by Director and Office insurance, individuals may be personally liable.

We are entering a carbon-constrained world where the targets will get progressively tighter. Mitigation and adaption, not inaction, are the only options. All companies can benefit from a comprehensive scenario analysis to help make the build-or-buy decisions that will form their strategic response. Those approaching the issue proactively will find themselves in a good position to navigate the changes—and seize the opportunities that lie ahead.

Valerie Chort is the National Leader of Deloitte’s Sustainability & Climate Change group. Skip Willis is a senior advisor to Deloitte on climate change, and the Principal of Willis Climate Group. Contact Valerie at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and Skip at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

TORONTO, ON — Canada's largest publicly traded companies are preparing for anticipated climate change policies by increasing their carbon management efforts each year, according to the Carbon Disclosure Project 2009: Canada 200 Report. The Canadian findings of the global Carbon Disclosure Project (CDP) initiative were released yesterday at Conference Board of Canada events in Toronto, Montreal and Calgary.

"Canadian companies now see more opportunities than risks from climate change, a significant change in sentiment since the Conference Board first conducted the CDP in Canada in 2006. Even in an uncertain economy, more companies are broadening and deepening their climate change activities," said Len Coad, Director, Environment, Energy and Technology of the Conference Board, which carries out the information request in Canada. "A consistent group of firms have become leaders in Canada for the quality of information they provide, and are recognized as Climate Disclosure Leaders," he added.

The top 200 companies by market capitalization on the Toronto Stock Exchange (TSX) were asked to respond to the CDP annual information request. Ninety-seven of Canada's largest companies responded, a slight decline from last year's 103 respondents (in both 2008 and 2009, respondents represented 77 per cent of the market capitalization of the TSX). The largest companies provided the most comprehensive responses, and companies in high-carbon impact sectors - notably transport and logistics, and oil and gas - demonstrated a higher overall quality of disclosure than firms in low-carbon-impact sectors.

For the first time, this year's report compares Canadian companies to organizations in other countries where the CDP is conducted. Canadian companies are in the middle of the pack in terms of their:

• engagement with policy-makers on climate change,
• disclosure of direct emissions from their operations and from external supply of electricity,
• involvement in emissions trading, and
• sound governance on climate change at the board level.

Although Canadian companies are increasingly undertaking carbon mitigation activities, they remain below the global average in the number of companies that perceive carbon to represent physical and regulatory opportunities instead of risks, have emission reduction plans, and use external verification for emissions data.

Ten companies in high-carbon impact sectors and five in low-carbon impact sectors are recognized as Climate Disclosure Leaders in Canada, based on the scoring of their CDP responses. Out of these, nine respondents have achieved this result for three consecutive years and two have been recognized for two consecutive years.

Climate Disclosure Leaders-High-Carbon Impact Sectors

• Canadian National Railways (first nomination)
• Enbridge Inc. (third nomination)
• EnCana (third nomination)
• Suncor Energy Inc. (third nomination)
• Bombardier Inc. (second nomination)
• ARC Energy Trust (second nomination)
• Catalyst Paper (third nomination)
• Gaz Métro L.P. (third nomination)
• Emera Inc. (first nomination)
• Penn West Energy Trust (third nomination)

Climate Disclosure Leaders-Low-Carbon Impact Sectors

• Royal Bank of Canada (third nomination)
• Toronto-Dominion Bank (first nomination)
• Bank of Montreal (first nomination)
• BCE Inc. (third nomination)
• Canadian Imperial Bank of Commerce (CIBC) (third nomination)

To download the full report, go to www.conferenceboard.ca/documents.aspx?did=3224.
The Carbon Disclosure Project 2009 Global 500 Report and complete information on the CDP can be found at www.cdproject.net.

About the CDP
The CDP takes the pulse of corporate perceptions, strategies and actions on climate change. This year's information request was sent to 3700 of the world's largest publicly-traded companies on stock exchanges. The CDP is endorsed by 475 investment companies and organizations with a total of $US 55 trillion under management.

Over the last few months there have been numerous milestones in the carbon legislation market. Many organizations are asking, “What does this mean for my organization?” For organizations that consume energy, goods, and raw materials, using energy  is going to cost more with a market-based carbon surcharge .

The critical milestone has been the passing by the US House of Representatives on June 26 of a massive bill aimed at improving U.S. energy independence and curbing domestic greenhouse gas emissions. Known as the American Clean Energy And Security Act of 2009 (commonly referred to as the Waxman-Markey Bill), the bill was introduced on May 15 by Energy and Commerce Committee Chair Henry Waxman and Subcommittee on Energy and Environment Chair Edward Markey. For the full text of the bill, click here.

Canadian government is paying close attention, because among other things this legislation would allow the U.S. to impose tariffs on imports from countries that do not impose similar greenhouse-gas emissions cuts. And if the bill or similar legislation passes, Canada would then have a motive to tackle their own emissions: access to U.S. markets.

Most people agree that it is becoming very likely that emissions trading will commence in the U.S. within the next few years. Even absent legislative action, the EPA has recently made an "endangerment finding" with regard to carbon dioxide that opens the door for executive action. In whatever form, the U.S. emissions trading initiatives will have a major impact on the North American economy and policy options.

All organizations need to prepare for this economic shift.  Many expect that the basic fabric of society will be changing over the next 30 to 50 years and many have compared the carbon market to the pre  dot- com era. The world carbon market is estimated to be worth $3.1 trillion dollars by 2020. All business, even if not directly affected by mandatory legislation, need to be aware and develop strategies that positions their organization for a low carbon economy.

A combination of increasingly international adaptation and mitigation strategies are being developed that should deliver a new economy based on low- and no-carbon energy sources. The Obama administration and the U.S. legislature have set in progress a series of actions that, once signed into law, will significantly reduce uncertainty around the nature and timing of this new low carbon economy :

• President Obama’s initial budget calls for approximately $80B per year in “climatic revenue” from 2012 onward, setting a clear target date on the commencement of economy-wide carbon pricing.
• The Environmental Protection Agency (EPA) has declared carbon dioxide and other greenhouse gases as pollutants under the Clean Air Act (providing the opportunity for executive action without specific further legislation). The EPA has also published proposed guidelines for mandatory reporting of greenhouse gases. Mandatory reporting clearly defines who will be required to submit reports to the EPA and other government departments and sets January 2010 as the date to begin reporting.
• The proposed American Clean Energy and Security Act of 2009 (commonly referred to as the Waxman-Markey Bill) sets out the mechanism by which global warming pollution will be directly addressed. It establishes a market-based program of tradable federal pollution permits (allowances), which are required to be surrendered by heavily polluting (facility-scale) entities. These include all facilities that annually emit more than 25,000 tons of CO2 equivalents (carbon footprint) and are dominated by the electric utilities, oil and gas, and large industrial sectors. Emission reduction and an accelerated migration to efficient energy sources will be achieved by reducing the total number of allowances over time, delivering the much talked about cap-and-trade carbon pricing model.
• More generally, President Obama has made international commitments to large-scale reductions in GHG emissions and a transformation of the energy dependence of the economy moving forward. This transformation is a central element of the American Recovery and Reinvestment Act of 2009, more commonly referred to as the Federal stimulus package.

These moves herald the regulated introduction of carbon as a cost of doing business and radically changes relationships between corporations and environmental regulations. The change likewise brings associated costs, risks, challenges, and opportunities to organizations and their supply chains.

Even though your organization may not be required to report on your carbon footprint, identifying risks and opportunities is an important step for all organizations. A few organizations today,  voluntary track and manage their carbon footprint data. Many of these organizations identify competitive advantage as a significant factor, emphasizing the strong marketing and messaging associated with the green agenda. Numerous studies indicate that many  companies and investors may be unprepared for carbon legislation and navigation within a new carbon-economy. Studies indicate that two-thirds of S&P 500 companies have inadequate greenhouse gas emissions disclosures.

Political, environmental, economic, energy security, and GHG emission-related factors have converged over the past few years, accelerating during the economic downturn of 2008–2009 to force a fundamental reorientation of policy directions relating to energy and emissions. Many anticipate an economic transformation and a new economic environment—one with the strategic priorities around energy and emissions rising significantly, and with carbon as a fully internalized cost of doing business.

Here are few high-level guidelines to developing a low carbon business strategy:

1. Start now
The last few years have proven that early action has proven to deliver enhanced brand and shareholder value for such organizations as GE Ecoimagination and Walmart. There have also numerous cases that early action can help not only reduce emissions, but also costs. Delaying action may result in damage to reputations and will ultimately be more expensive.

2. Measure, monitor and manage your organization’s carbon footprint to gain a competitive advantage
There are numerous questions that organizations should ask themselves:

• What are the main sources of my emissions?
• Where can actions have the biggest impact?
• What projects should I implement that provide an acceptable ROI?
• How do I engage stakeholders such as investors, employees and suppliers?
• Will actions within my supply chain have a large impact?

One of the best ways to answer all of these questions — and showcase your organization’s environmental stewardship — is to measure your organizational carbon footprint. The sooner companies start the learning curve required to deliver such footprints, the less total pain there will be and the greater the reputational enhancement will follow.

Michel Girard, PhD, of the Canadian Standards Association provides a comprehensive overview of how to  “Measure, monitor and manage your organization’s carbon footprint to gain a competitive advantage.”

3. Link your energy consumption to a carbon management strategy
Most organization’s emissions are as a result of energy consumption within buildings and company vehicles. By analyzing energy consumption, an organization opens the door to building an effective carbon management strategy and reducing energy costs.

4. Understand your risks within this new carbon economy
Cap-and-trade, mandatory compliance, and other regulatory risks are likely to affect only a small portion of the marketplace. However, there are various other risks associated with carbon management that should be identified and tracked. These include physical risks associated with the supply chain (e.g., impact of extreme weather events, changing temperature and rainfall patterns, sea level rise, security of supply and disease) and financial and other risks (e.g., carbon pricing, changing consumer demand, resource cost increases, reputation, and stakeholder).

5. Consider a growth strategy and access opportunities
Identifying how your products and services can be integrated is an important consideration. Numerous organizations have established new revenue streams for their green products and services. Many of these organizations have been able to grow or maintain value during the economic downturn.

6. Start building your internal expertise
Carbon management is unique to each individual organization, as it is closely related to its internal operations. Operational understanding and linkage to carbon management will take time and resources. The ability to navigate the new carbon economy in part depends on having sufficient internal knowledge to remain agile and adaptable to a highly dynamic and complicated business agenda. Start by building a green team that has executive support and multi level organizational representation.

There’s no question about it, thriving in the 21st century will depend on the ability to track, manage and report on climate, environmental, carbon and GHG-related risks with speed and precision.

Julie Matthews is Director of Advisory Services Group with e3 Solutions Inc. Additional information about e3 Solutions is available at www.e3solutionsinc.com.

All research conducted with respect to climate change acknowledges the fact that adaptation will be a key response to reducing vulnerability to its effects. The big question is how will companies and governments manage that adaptation process?

The reality is that the Earth has already warmed by 0.7°C since around 1900. Even if all emissions stopped tomorrow, the Earth will warm by a further 0.5 - 1°C over coming decades due to the considerable inertia in the climate system. Based on current trends, global temperatures could rise by 2 - 3°C within the next 50 years or so, with several degrees more warming by the end of the century if emissions continue to grow.

Economist Lord Stern of Brentford clearly warned the world in his Stern Review on the Economics of Climate Change, prepared for the British government on the subject of effect of climate change and global warming on the world economy, that climate is a pervasive factor in social and economic development – one so universally present and so deeply ingrained that it is barely noticed until things go wrong.  

He further cited that adaptation will be crucial in reducing vulnerability to climate change and is the only way to cope with the impacts that are inevitable over the next few decades. In regions that may benefit from small amounts of warming, adaptation will help to reap the rewards. It provides an impetus to adjust economic activity in vulnerable sectors and to support sustainable development, especially in developing countries.

However, adaptation isn’t easy, and it can only reduce, not remove, the impacts of climate change. There will be some residual cost – either the impacts themselves or the cost of adapting. Without early and strong mitigation, the costs of adaptation rise sharply.

The thirteenth session of the Conference of the Parties (COP 13) in Bali, December 2007, adopted the Bali Plan, which identified adaptation as one of five key building blocks required for a strengthened future response to climate change to enable to and beyond 2012. The other four building blocks are: shared vision; mitigation; technology; and financial resources.

According to a report by Working Group II of the Intergovernmental Panel on Climate Change (IPCC), adaptation is necessary to address impacts resulting from the warming which is already unavoidable due to past emissions. And some adaptation is already occurring but more extensive adaptation is required to reduce vulnerability to future climate change. The report concluded that a portfolio of adaptation and mitigation measures can diminish the risks associated with climate change.

Adaptation defined
Adaptation, in a general sense, is defined as “Modification of a concept or object to make it applicable in situations different from originally anticipated.” A broad definition of adaptation, following the IPCC, relates to any adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities.  

Adaptation will reduce the negative impacts of climate change (and increase the positive impacts), but there will almost always be residual damage, often very large. The gross benefit of adaptation is the damage avoided. The net benefit of adaptation is the damage avoided, less the cost of adaptation.

The objective of adaptation is to reduce vulnerability to climatic change and variability, thereby reducing their negative impacts. It should also enhance the capability to capture any benefits of climate change. Hence adaptation, together with mitigation, is an important response strategy. Another warning from Stern is that without early and strong mitigation, the costs of adaptation will rise, and countries’ and individuals’ ability to adapt effectively will be constrained.

Forms of adaptation
Accepting the fact that adaptation is a response to climate change and climate variability, a planned adaptation can help to minimize the impacts and vulnerabilities while policy responses through human interfaces attempt to mitigate climate change and its variability.  

Policy-driven adaptation can be defined as the result of a deliberate policy decision.   Autonomous adaptation is undertaken mainly by the private sector (and in unmanaged natural ecosystems), while policy-driven adaptation is associated with public agencies either in that they set policies to encourage and inform adaptation or they take direct action themselves, such as public investment.

According to a report published by the IPCC on the subject, adaptation can operate at two broad levels:
Building Adaptive Capacity – creating the information and conditions (Regulatory, institutional, managerial) that are needed to support adaptation. Measures to build adaptive capacity range from understanding the potential impacts of climate change, and the options for adaptation (i.e. undertaking impact studies and identifying vulnerabilities), to piloting specific actions and accumulating the resources necessary to implement actions; and
Delivering adaptation actions – taking steps that will help to reduce vulnerability to climate risks or to exploit opportunities.  Examples include: planting different crops and altering the timing of crop planting; and investing in physical infrastructure to protect against specific climate risks, such as flood defences or new reservoirs.

The barriers and limits associated with adaptation include the following:
•    Uncertainty and imperfect information;
•    Missing and misaligned markets, including public goods; and
•    Financial constraints, particularly those faced by the poor.

Countries and regions around the world are engaged in developing strategies to overcome the barriers and limitations associated with Adaptation. Here is an example of how the European Union is preparing to capitalize on the power of adaptation.

The EU’s adaptation plan
The European Commission presented a white paper in April 2009 that articulated the framework for adaptation measures and policies to reduce the European Union's vulnerability to the impacts of climate change. This paper acknowledged the fact that decisions on how best to adapt to climate change must be based on solid scientific and economic analysis. It is therefore important to increase the understanding of climate change and the impacts it will have. The white paper outlines the need to create a clearing house mechanism by 2011 where information on climate change risks, impacts and best practices would be exchanged between governments, agencies, and organisations working on adaptation policies.

The paper presented the EU’s Adaptation Framework and the objective was to improve the EU’s resilience to the impact of climate change. The EU’s framework adopts a phased approach. The intention is that phase 1 (2009-2012) will lay the groundwork for preparing a comprehensive EU adaptation strategy to be implemented during phase 2, commencing in 2013.

Phase 1 will focus on four pillars of action:
1. Building a solid knowledge base on the impact and consequences of climate change for the EU;
2. Integrating adaptation into EU key policy areas:
•    Increasing the resilience of health and social policies;
•    Increasing the resilience of agriculture and forests;
•    Increasing the resilience of biodiversity, ecosystems and water;
•    Increasing the resilience of coastal and marine areas; and
•    Increasing the resilience of production systems and physical infrastructure.
3. Employing a combination of policy instruments (market-based instruments, guidelines, public-private partnerships) to ensure effective delivery of adaptation; and
4. Stepping up international cooperation on adaptation. For phase 1 to be a success, the EU, national, regional and local authorities must cooperate closely.

The proposals set out in this paper cover actions to be taken in the first phase and are without prejudice to the future structure of the EU budget and to the current and future multi-annual financial framework.

The best way to minimize damages associated with climate change is to adapt carefully the management of resources, and the procedures and processes of producing goods and services. As a business or municipal leader, it’s worth considering how you could adapt the European approach to this issue to your own organization’s practices. Adaptation is a critical part of becoming a sustainable business in the long term. Consider it carefully.

Dr. Mir F. Ali is a Sustainability Analyst with Turner Lane Development Corporation, a real estate development company with the commitment to build sustainable communities in British Columbia ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).

If you’re reading a website called Green Business, chances are good you already have a professional interest in sustainability and the challenges of climate change. But does your organization truly ’walk the talk’ or are its so-called sustainability activities mere lip-service? Are you measuring the success (or failure) or your strategies? Have you shared those results with current and potential stakeholders? Are you able to demonstrate that you belong in a sustainable supply chain? Will you be competitive in a low-carbon economy?

By Dr. Mir F. Ali

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