Executive Summary
Climate change is now a bright, blinking issue on the radar screens of companies
worldwide. Companies have started addressing climate change for a myriad of
reasons – reasons as diverse as their respective business models. The
academic and business literature has done a fairly good job of exploring why
companies are addressing climate change. This study examines how they are
addressing climate change. It explores the risks, rewards, opportunities and
barriers surrounding corporate action on climate change and provides insight into
the strategies employed by companies that have led the way in taking early
action. The lessons learned by early actors can inform the efforts of those who
follow.
Climate change presents companies with significant risks, uncertainties, and an
increasing number of market opportunities. Companies now confront a patchwork
of regional regulation. In addition, most companies in our survey expect federal
regulations to limit GHG emissions within the next decade. The unknowns of
potential regulation create uncertainty, and therefore risk, for businesses making
strategic decisions. Volatile energy prices wreak havoc on cost structures,
severely impairing the ability to accurately forecast profitability. Large storm
events have caused companies to think differently about the physical risks of
climate change. Accumulating scientific evidence, coupled with these large
storms, has boosted public awareness, leading to changing consumer
preferences. Companies are looking at these changing preferences and
identifying market opportunities, broadening the traditional risk-mitigationcentered
approach to climate change.
The focus of this study is “climate-related strategies,” defined as the set of goals
and implementation plans within a corporation that either aim to reduce GHG
emissions, or that significantly reduce GHG emissions as a co-benefit. This
includes strategies and measures for achieving near-term emission reductions
from a company’s own operations; research, development, and investment in
low-carbon production and process-related technologies; alternative products
that have a more attractive carbon profile; energy-efficiency initiatives; reductions
obtained through offsets and emissions trading; and activities to reduce
“upstream” or “downstream” GHG emissions along their value chain.