Business Coalition Sees Profit Opportunities in Global Climate Challenge

Business Coalition Sees Profit Opportunities in Global Climate Challenge
April 1, 1999



Three major corporations, each with a different perspective on the Kyoto global warming protocol, have teamed up with an environmental group to formulate a proactive strategy to encourage economic growth while reducing the risk of climate change.

General Motors Corp. (GM), British Petroleum Corp. (BP), Monsanto Co., and the World Resources Institute (WRI) are represented in the collaboration, known as "Safe Climate, Sound Business." GM opposes the Kyoto Protocol, while BP and Monsanto are supportive and neutral, respectively. The WRI is a noted liberal advocacy group favoring restrictions on business activity in the name of sustainable development.

"There should be no inherent conflict between economic development and a healthy environment," the group’s representatives said in Washington, DC. "We believe that finding common ground and understanding differences among business, government, and environmental interests is critical to ensure both a safe climate and a sound business outcome."

Since early 1997, the group has studied various scenarios for meeting future world energy demand, explored new technologies and potential business opportunities, and reviewed how different polices could encourage businesses and consumers to respond. The partners currently are working on the next phase of their mutual agenda.

However, other business and agriculture groups fear that the future agenda may include a legislated system of giving credits to companies that reduce greenhouse gas emissions in advance of any implementation of the Kyoto climate change treaty. The Senate Environment and Public Works Committee is considering one such bill, introduced last year and reintroduced in 1999.

Glenn Kelly, executive director of the Global Climate Coalition, said, “we have serious concerns about the concept of credits and their relationship to (emission reduction) targets. Many companies are concerned that their efforts will be misinterpreted as support for the Kyoto Protocol. Only a detailed, open debate will be able to provide the answers to many important questions.”

Nevertheless, the GM/BP/Monsanto group concluded that climate change is a cause for concern and that precautionary action is justified now. The group has established a number of actions it recommends businesses take to respond, including:

  • Measure, track, and openly report greenhouse gas emissions from their operations.
  • Act on near-term opportunities to reduce and sequester greenhouse gas emissions from worldwide facilities, products, and supply chains.
  • Educate employees, customers, suppliers, and other key stakeholders to raise their awareness of climate change issues.

The group said government also has a role in steering society toward stabilizing greenhouse gas concentrations. Its participation would include:

  • Implementing market-based mechanisms based on national commitments, and eliminating subsidies to fossil fuels.
  • Ensuring that the public, industry, and others are included in broad discussions to raise awareness and formulate responses to the climate issue.
  • Establishing mechanisms that enable developed and developing countries to implement cost-effective options to achieve sustainable development objectives.

Among the recommendations the group made to implement the "next step" phase of its collaboration are:

  • Making climate protection an explicit criteria in global business investments. For example, the group recommends that businesses share climate-friendly technologies and processes with business partners and suppliers in developing-country markets.
  • Using purchasing leverage to promote supplier energy performance and build market demand for low-cost renewable energy.

The group also expressed concern that a number of economic, regulatory, and legal barriers are preventing the development of technology and slowing its adoption. Among their concerns are a weak market demand for climate-friendly products, inadequate complementary infrastructure, insufficient incentives for basic research, and the lack of universal industry standards and norms for new technologies.

Commenting on the October release of “Building a Safe Climate, Sound Business Future,” a 56-page report summarizing the group’s research efforts and outlining its strategy for moving forward on the climate change issue, WRI President Jonathan Lash noted, “our analysis shows that it is technically possible and important to get on a path toward stabilization of greenhouse gas concentrations in the atmosphere. We also agree that this difficult challenge is a business opportunity--a chance for strong, innovative companies to create new products and businesses.”