Leading companies recognise that there are often compelling business reasons to take voluntary action on reducing emissions of greenhouse gases (GHGs).The first movers have come to the conclusion that they need to reduce emissions for reasons beyond the obvious concern of protecting the climate. There are compelling business reasons. Proactive companies can save money by reducing emissions through internal measures, buffer themselves from climate-related business impacts and develop new business opportunities by investing in offsets and meaningful emission reductions projects.

The companies taking voluntary action already include some of the biggest corporations in the world:

• American Electric Power
• Ford Motor Company
• Google
• DuPont
• General Electric (GE)
• PG&E
• Avis Europe
• Blackwell Publishing
• The World Cup 2006 Germany
• Allianz
• Goldman Sachs
• HSBC
• Swiss Re
• Morgan Stanley

"We think green means green. This is a time period where environmental improvement is going to lead toward profitability. This is not a hobby to make people feel good."
General Electric's CEO Jeff Immelt, 2005

Chicago Climate Exchange

Leading U.S. companies explore ways to profit from Carbon Emissions Trading and have joined the Chicago Climate Exchange. In 2003, the Chicago Climate Exchange (CCX) was established as the first voluntary carbon credit market. A total of 225 companies have made promises to reduce greenhouse gases by 6 percent by 2010 are trading carbon credits on the Chicago Climate Exchange. Prices for the credits started around 90 cents per ton of carbon when the exchange was established in 2002; they now trade around $4.

Investment is going Climate Neutral

The Institutional Investors Group on Climate Change (IIGCC) is a forum for collaboration between pension funds and other institutional investors on issues related to climate change. The group, which represents 16 mainstream institutional investors with more than $195 billion funds under management, has formed in 2006. The IGCC aims to encourage companies and markets in which IIGCC members invest to address any material risks and opportunities to their businesses associated with climate change and a shift to a lower carbon economy. www.iigcc.org/

Bank of New York Creates Global Registry for Voluntary Carbon Market

"The Bank of New York, a global leader in securities servicing, has created a global registrar and custody service to facilitate trading of voluntary carbon units (VCUs), an outgrowth of the Kyoto Protocol calling for the reduction of greenhouse gas emissions. The new registrar and custody service is a critical component in the development of global standards and processes for the voluntary carbon offset market, allowing participants who wish to actively transfer VCUs to do so via a centralized team within the Bank's corporate trust services division. The register will provide a centralized, secure and paperless environment to support a wide spectrum of participants in the voluntary emissions reduction market."

Initiatives undertaken by companies include:

• Morgan Stanley
  The investment bank plans to spend almost $3 billion to trade carbon credits on greenhouse gases over the next five years

• Swiss Re
  The worlds largest reinsurance comapny announced in 2003 a 10-year plan to become carbon neutral (by reducing its emissions by 15% and offsetting the rest through investment in The World Bank Community Development Fund). Swiss Re expects to offset a minimum of 37,000 tCO2e per year

• HSBC
  After deciding to take voluntary action in 2004 HSBC, one of the world's largest banks, decided to make its operations carbon neutral by offsetting it's 170,000 tons of CO2 e emissions- the "Carbon Neutral Pilot Project". This leading financial company spent estimated US$750,000 buying offsets from selected projects in Germany, India, Australia and New Zealand.
  At the end of 2006, the bank is taking the consequent step and is offering now advice for its customers on the implications of climate change

• PG&E
  PG&E is one of the largest investor-owned utilities in the US and a provider of electric and natural gas service to over 5 million customers throughout California. PG&E announced a groundbreaking program that would help its customers become "climate neutral." This program-the Climate Protection Tariff (CPT) program-would collect small premiums from enrolled customers, and then invest the funds collected in carbon offset projects. The resulting greenhouse gas (GHG) reductions would negate the customers' emissions, thereby rendering them climate neutral.

Further initiatives include:

• The Carbon Disclosure Project
  The Carbon Disclosure Project (CDP) provides a secretariat for the world's largest institutional investor collaboration on the business implications of climate change. CDP represents an efficient process whereby many institutional investors collectively sign a single global request for disclosure of information on Greenhouse Gas Emissions. In 2006 it has expanded to reach over 2100 companies.
• G8 Climate Change Roundtable
  23 multinational corporations have come together in the G8 Climate Change Roundtable, a business group formed at the January 2005 World Economic Forum. The group includes Ford, Toyota, British Airways and BP among others. On 9 June 2005 the Group published a statement stating that there was a need to act on climate change and stressing the importance of market-based solutions. It called on governments to establish "clear, transparent, and consistent price signals" through "creation of a long-term policy framework" that would include all major producers of greenhouse gases.
• California Climate Action Registry
  The CCAR, developed by California statute as a nonprofit voluntary registry for greenhouse gases, has developed a General Protocol and additional industry-specific protocols with guidance on how to inventory emissions in the Registry, including what to measure, how to measure, the back-up data required and certification requirements. Participants agree to register their gross greenhouse gas emissions and efficiency metrics for all operations in California and are encouraged to report nationwide. www.climateregistry.org
• Australia
  In Australia, like in the US, in the absence of a mandatory scheme, companies are taking the climate lead. Some businesses and Initiatives which have offset some or all of their emissions or simply taken a leading role in the sector are:
  
  • Banks: ANZ, NAB, Westpac
  • Building materials: Boral
  • Energy: Origin Energy, AGL
  • Entertainment: Tabcorp Holdings
  • Food: Goldman Fielder, Lion Nathan
  • Health care: DCA Group, Symbion Health
  • Infrastructure: Transurban
  • IT: Computershare
  • Insurance: IAG Insurance Australia Group
    "The greatest risk facing insurers in the next four years and beyond is climate change."
    IAG CEO Mike Hawker, May 2006
  • Mining: BHP Billiton, Rio Tinto
  • Property trusts: GPT Group, Investa, Mirvac
  • Retail: Warehouse Group
  • Telecommunications: Telstra

• Business Roundtable on Climate Change
  The Australian Business Roundtable on Climate Change was formed to advance the understanding of business risks and opportunities associated with climate change and to help develop effective policy frameworks and market conditions for Australia's low carbon future.
  IAG, BP Australia, Origin Energy, Visy Industries, Swiss Re and Westpac are part of the Business Roundtable on Climate Change 

All those leading companies are all engaging in voluntary markets to offset their emissions. Are you taking action or will you be left behind? Contact us to discuss what steps you can take and to develop a strategy.