The energy and natural resources industry is arguably the most susceptible to the financial risks associated with carbon emission controls. Oil and Gas by virtue of its carbon emissions intensive products and long development process is particularly vulnerable to the financial risks associated with climate change. As one of the largest sources of carbon dioxide emissions globally the threat of mandatory carbon legislation is a real risk for the industry as is the increase in ethanol and renewable fuels. Energy security within the mining sector is also a constant challenge and while diesel generators are common practice they still require fuel to be ferried into remote mining areas.

Electricity power producers on the other hand are even more susceptible to the financial risks associated with climate change. With legislation on carbon emissions tightening globally these enormous polluters with their coal fired power plants and other high emissions power plants could face significant compliance costs. Other significant climate change risks facing this industry are litigation concerning corporate contributions to global climate change. Examples already exist of lawsuits against large utilities for substantial contributions to climate change.

Opportunities:

Leading utilities are realizing that they need to diversify their investments into renewable energy sources. This has a positive impact on reputation and will reduce risk of litigation in future. Utilities are differentiating themselves to consumers by offering clean energy products such as wind, solar and biofuels. In Oil and Gas some companies are seeing these risks as opportunities and are positioning themselves well in the biofuels industry. Forerunners are embarking on renewable energy, energy efficiency and education programs with the knowledge that they can significantly impact their own profitability and impact their reputation positively by showing they are internally reducing their own emissions while searching for alternative fuels.

Waste streams like gas flaring and methane emissions are being looked at as new sources of revenue through implementation of carbon credit projects. Leading companies are communicating their progress transparently to consumers and gaining from the positive brand exposure and the reduce risk perceived by investors.

GCX Services: What we can do

Efficiencies – GCX will assess your companies’ carbon emissions through a carbon footprint and a business case energy efficiency audit. The next step is to reduce your carbon emissions by working with you to set targets and budgets and then implement reductions and achieve cost cutting goals. Reductions include Education campaigns to ensure that your employees support internal initiatives. GCX will also monitor your emissions on an ongoing basis. As you embark on the journey to become a low carbon emission business you can gain significant marketing and PR traction and differentiate your brand as a climate change leader.

Adaptation - Adaptation is the adjustment in systems in response to actual or expected climatic events or their effects, which moderates harm or exploits beneficial opportunities. GCX will look carefully at the impact that climate change will have on your business including your supply chain. Our specialists will show you the risks inherent in your business model and help to implement ways to reduce this risk.

Legislation and Reputation – GCX will determine the impact of legislation on your business and how best to respond to ensure that your profitability is not impacted. This includes determining the reputation risks exposed by being high emissions businesses.

Waste to Energy – GCX will work with you to identify waste streams that offer energy efficiency and revenue opportunities through the carbon credit market. Project types include fuel switch (goal or Gas to Biomass), waste to energy (gas flaring utilization) and waste heat recovery processes.

Investors – GCX will work your company to create a comprehensive emissions reduction communication strategy to ensure that the investment community is happy that the inherent risks in your business from the physical, legislative and reputation climate change risk are under control.