When giant supermarket chain Tesco followed Marks & Spencer into carbon-slashing mode earlier this year, the writing was on the wall for worldwide suppliers: carbon judgement day cometh. And if New Zealand doesn’t start exercising its carbon conscience with more vigour, our clean green branding image is going to suffer.
There’s already distinct sense that we’re dragging the chain. When global sustainability experts visited last month, they expressed surprise we weren’t more proactively promoting verifiable green image to counteract what is fairly easy salve for the consciences of carbon-aware northern hemisphere consumers: food miles – just don’t buy stuff that’s travelled long way to local markets.
They also noted lack of robust environmental standards and were somewhat shocked at the level of vehicle emissions.
Merely having landscape relatively free of belching smokestacks and fortuitous abundance of “clean” hydro-generated electricity may not quite cut it in world that’s becoming lot more particular about counting the carbs.
“You have to be on the front foot. You need to know where your carbon footprint is and use it in the marketing process,” advises Tim Jackson, professor of Sustainable Development (SD) at the Centre of Environment Strategy, University of Surrey and chair of the economics steering group with the UK Commission on SD.
The lack of certainty around climate change policy in New Zealand hasn’t helped. There’s not much in the way of regulatory push to go carbon zero – despite Prime Minister Helen Clark’s stated commitment to that track.
Compare that to the United Kingdom where bill mandating 60 percent cut in carbon emissions by 2050 (as recommended in The Stern Review: The Economics of Climate Change) has just been introduced to “ensure the UK’s emissions are placed on sustained downward path”.
Murray Ward, who led the Ministry for the Environment’s climate change team before founding Wellington-based Global Climate Change Consultancy (GtripleC) in 2003, says the on-and-off nature of climate change policy here means business hasn’t had to really focus on it.
“New Zealand businesses have been able to cruise in the past decade without any regulatory-style pressure so it’s been under the radar screen for most. It hasn’t appeared to be particularly relevant to them – with the exception of heavy energy users.”
That however is changing.
As Helen Clark noted earlier this year: “Issues around sustainability and climate change have become the compelling issues of our times, dominating international forums and agendas.”
Her announcement earlier this year that six government departments will commit to reaching carbon neutrality by 2012 is part of flurry of activity on the climate change front. One sign of this is an announcement on Landcare Research’s “carbonNZero” site that it might be running slow due to “unprecedented interest”.
“Yes there is lot more interest,” confirms Ann Smith who leads Landcare’s business sustainability research and the government-accredited carboNZero certification programme.
“I would say that up to September last year we were working with about 10 companies. Now we’re working with around 200. While there’s just small handful of companies that have gone through our certification process, there’s lot more that are coming up fast.”
One company that has successfully gained carboNZero certification is Meridian Energy, which announced its status as this country’s first carbon-neutral energy supplier in February. The move is not only in line with the company’s own renewable energy strategy but means customers seeking to reduce their own carbon footprints can treat electricity supplied by Meridian as ‘carb-free’.
You can also drink ‘carb-free’ wine – courtesy of the NZ Wine Company which is able to claim first mover status in its industry, not just domestically but globally, after gaining carboNZero certification last year.
The reasons for committing to carbon neutrality vary from company to company – some pulled by offshore markets, others by intrinsic values or desire to jump before being pushed.
“Some companies feel they need to put price on carbon voluntarily because they believe it will be mandatory in future,” says Smith. “They’re basically positioning themselves to be able to operate within carbon trading environment. For exporters it’s something being imposed by overseas markets. Tesco and Marks & Spencer have both made announcements requiring suppliers to have these measures in place. Some [buyers] have given New Zealand suppliers 24 months to be carbon neutral.”
While market access is an issue for many, there’s another whole group of companies who see it as the right thing to do, adds Smith.
“They already have strong environmental or ethical stance and are looking at how they can do their bit.”
Although New Zealand as whole doesn’t have big industrial footprint – unlike most developed countries large proportion of our emissions come from our agricultural sector – it’s situation where individual actions do add up. And whether or not we like the notion or even believe in climate change, the reality is that come 2012, our emissions will cost us all.
As Murray Ward noted in recent paper: from January 2008, every tonne of carbon dioxide equivalent that otherwise couldn’t have been cost effectively avoided will cost the New Zealand taxpayer $20-$40. And every business can do their bit both to reduce that bill and mitigate their individual impact on the environment.
“No business is too small to care – it depends on whether they choose to care,” says Ward.
So how easy is it to reduce your carbon footprint?
Measure, manage, mitigate
Anyone wanting to curb their carbs has first to count them.
This involves identification of all direct and indirect sources of greenhouse gas (GHG) emissions that are considered material – vehicle use, light and heating are examples common to all business operations.
Raechel Cummins, specialist consultant at PricewaterhouseCoopers, says the first thing to do is take holistic view of the company from both legal and operational standpoints and undertake thorough scoping exercise.
“It’s critical to do this accurately because if you get it wrong then your baseline [measurement] is wrong and under the ISO regime, you have to backtrack to get that right again.”
She says carbon counting is based on principles of financial accounting which matters when you start to get into more complex organisational structures where carbon accounting has to include subsidiaries, contractors, joint ventures etc.
“Because it has material impact on your bottom line, you need to ensure you’ve got very accurate numbers – something that actually reflects what you’re doing.”
Go for the low-hanging fruit first, suggests the head of PWC’s climate change team Julia Hoare.
“Often when companies sit down to work out their carbon footprint, they end up finding they can save money – that there’s whole lot of energy efficiency issues they haven’t thought of. And while staff may not always be happy about having to turn lights off or travelling less, many may feel quite positive about making contribution to the environment.”
The second step is to manage or reduce emissions. CarboNZero offers simple calculators and guidance for small businesses to measure their GHG emissions and help with energy audits is available via the Energy Efficiency and Conservation Authority (www.eeca.govt.nz). For larger, more complex businesses, more sophisticated software tools and external expertise may be needed, says Landcare. These should be based on standards for GHG measurement and reporting such as The Greenhouse Gas Protocol (from the World Business Council for Sustainable Development) or ISO 14064 – Greenhouse Gases part 1 (International Standards Organisation).
One of the issues being grappled with around the globe is ensuring that those participating i