Resource

Commitments & Goals

October 22, 2003

The Big Picture

For many companies, one of the first actions to be taken towards implementing a climate strategy is setting a goal and making a commitment to reducing its climate impact. Efforts to reduce a company’s impact typically reach across many, if not all, business units, require buy-in and active support from top management down to line workers, and necessitate implementation over long time frames. The complexity of the issue means that a company has a greater likelihood of success if it has made a public commitment to a concrete goal. The public commitment helps in publicizing the goal both internally and externally. The existence of a concrete goal (meaning, for example, a goal of “reducing greenhouse gas emissions by 15% below 1990 levels,” not simply “lowering emissions”) makes measuring progress and determining success or failure much simpler.

A climate commitment may be made as an individual company, or may be made as part of a program sponsored by a government agency or a nonprofit organization. For example, joining a measuring and reporting initiative, an emissions-trading cooperative, or a climate-certifying program may either require or suggest a climate commitment on the part of the company.

Key Players

Companies. Many of the leaders in goals and commitments are the influential companies that have made a commitment to reducing emissions and are now working to reach their goals. Numerous companies have done so. For example,

DuPont has made a public commitment to reducing emissions of greenhouse gases by 65% from 1990 levels by 2010. The company already has reduced greenhouse gas emissions (carbon equivalent) from operations by half in the 1990s. Notably, most of these initial reductions in emissions came from greenhouse gases other than carbon dioxide.

In 1998 BP made a public commitment to reduce greenhouse gas emissions by 10% below 1990 levels by 2010. As an energy company whose business is principally based on fossil fuel-based energy production, this commitment is particularly notable, as is the fact that BP reached its goal nine years early in 2001.

Government programs and NGOs. The US Environmental Protection Agency’s Climate Leaders is a collection of companies across sectors that are working with EPA and have agreed to inventory greenhouse gas emissions and set a company goal to reduce them. In return, EPA provides technical assistance, guidance on reporting mechanisms, and opportunities for publicity. The EPA also has climate programs that are sector-specific. One example is the Voluntary Aluminum Industrial Partnership, a group of aluminum producers working with EPA to reduce emissions of a potent greenhouse gas.

Similar collaborative partnerships are led by nonprofit organizations. Two examples are Climate Savers, a program of World Wildlife Fund and the Center for Energy and Climate Solutions, and the Partnership for Climate Action, a program of Environmental Defense.

Finally, a company may choose to make a commitment to reducing or eliminating emissions from one product, business unit, or operation. The Climate Neutral Network offers certification and assistance for such cases.

Voluntary tracking and reporting programs. Involvement in measuring and reporting initiatives may require a company to commit to tracking emissions, but not necessarily reduce them. The California Climate Registry, for example, includes companies among its 23 charter members that have agreed to measure and eventually have their emissions certified by a third party. The Greenhouse Gas Protocol Initiative includes companies working with the World Resources Institute and the World Business Council for Sustainable Development to develop an accounting standard for tracking and reporting emissions. Although involvement in the GHG Protocol does not require an emissions reduction commitment, companies involved in the GHG Protocol work have in effect committed to the standards.

The Upside

Sending signals. Making a public commitment to a climate strategy clearly signals a company’s intent both to employees and management, and to external stakeholders
Creating momentum. Creating a climate strategy and setting an emissions-reduction goal is the starting point from which a climate strategy flows. These initial actions can make subsequent actions easier by making the company’s dedication clear.
Accessing resources. Making a public commitment through joining a program such as EPA’s Climate Leaders can make significant resources available to a company. Access to measuring and reporting tools, information on how to reduce emissions, and other resources are likely to make reaching an emissions goal easier, as will the networking and educational opportunities that often are a part of such progress.
Modeling leadership. An emissions reduction goal can allow the company to be seen as a leader in environmental performance.
Cost and other savings. Additional benefits are likely to come from reducing emissions, such as cost savings from energy efficiency.

Reality Check

Inadequate information. Setting an emissions reduction goal and making a public commitment to the goal can cause a chicken-and-egg problem: a company can’t easily set a goal without knowing what the goal should be, but the process of gathering enough information to set a realistic goal may require a public commitment to show that the company is serious.
Unrealistic expectations. Setting a goal without first establishing a baseline can be difficult and can create unrealistic expectations. Companies may be tempted to do this because of the desire to make a public statement, but doing so risks setting goals that are too ambitious.
Complex technical issues. Setting emissions reduction goals requires acquiring and understanding a great deal of technical information, not all of which is universally accepted. Chief among these is establishing boundaries and baselines. If, for example, a large company has been buying and selling business units in recent years, it may find that choosing an appropriate base year to be challenging.

Action Plan

Gathering information. Making a commitment to GHG management and setting goals is the starting point of a company’s climate commitment, and requires more thinking and planning than immediate action. A starting point is often gathering information from both external and internal sources. External information includes issues such as understanding policy issues, the regulatory environment for greenhouse gases both currently and in the future, and available technology, renewable energy, and other means of reducing emissions. Internal information includes the beginnings of a baseline emissions assessment so that any emissions reduction goal will be based on realistic expectations.
Joining with others. A second step is considering joining one or more of the collaborative efforts available to companies, such as EPA’s Climate Leaders, World Wildlife Fund’s Climate Savers, or Environmental Defense’s Partnership for Climate Action. Similarly, a company may choose to join a measuring and reporting initiative, such as the GHG Protocol Initiative, or the California Climate Registry.
Going public. Finally, the company must decide whether and how to make its commitment public. Joining the organizations mentioned above may include some level of publicity. A company also may seek publicity through press releases or public statements by senior management, or may choose to remain quiet. If the company opts to make its approach public, displaying the commitment prominently on its Web site, along with implementation strategies, is a common approach.

Leads

EPA Climate Leaders is a leading public-private partnership that includes companies that have made a climate commitment.
Climate Savers is a program of the World Wildlife Fund and Center for Energy and Climate Solutions.
Climate Action Partnership is a program of Environmental Defense and numerous collaborating companies.
Climate Neutral Network certifies products and company operations as having eliminated their climate impact.

Bottom Line

Committing to the creation and implementation of a climate strategy is an early and important step for any company seeking to reduce its impact on climate. Setting a goal to reduce emissions of greenhouse gases is often a parallel effort, although sometimes the goal must come after a baseline emissions inventory is complete. In either case, making a public statement about a company’s climate commitment may help give the company credibility on climate issues, and can lead to positive publicity.