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How Businesses Can Profitably Reduce Emissions
By Mindy Ricketts

The 3% Solution, a report co-authored by the World Wildlife Fund (WWF) and the Carbon Disclosure Project (CDP), outlines how reducing emissions can be an incredible financial opportunity for businesses.

The report, unveiled Tuesday during a Greenbiz podcast, was a six-year effort that drew input and analysis from many organizations. It was sponsored by corporations like Dell, Sprint, Kohl’s, Intel, and Coca-Cola.

The tone of the report is proactive and optimistic, and presents businesses with options that are both technically feasible as well as socially and economically beneficial. In dollars and sense, The 3% Solution “can create a present value of net savings up to US$190 billion in 2020 for the US Corporate Sector, excluding utilities.”

Time is running out. “The opportunities here are real, but also constitute a limited time offer. If we wait until 2020, the path toward a safer future will be much steeper. And if we wait until 2030, it may be unachievable, leading to insecure supply chains, climate tipping points and major business and societal risk,” Marcia Marsh, Chief Operations Officer of WWF-US, wrote in her Forward to the report.

The global economy is NOT currently on a trajectory to restrict climate change to 2°C above pre-industrial temperatures as prescribed by the Intergovernmental Panel on Climate Change.

In fact, weird weather and dangerous shifts to water availability and agricultural productivity are happening sooner and are more extreme than scientists had originally predicted. In order to meet the 2°C target, “the US corporate sector must reduce total annual greenhouse gas emissions in 2020 by 1.2 gigatonnes of CO2 from 2010 levels.” This equates to a 3.2%average annual reduction between 2010 and 2020, inspiring the title of the report.

To help businesses achieve higher returns and lower emissions, the report outlines three levers to increase energy efficiency: 1) technology improvements such as lighting and HVAC upgrades, 2) management and behavior changes, such as turning off lights and computers when they are not in use, and 3) the adoption of renewable or low-carbon energy.

This report represents a profound opportunity for the corporate sector to understand the opportunities inherent in emissions reduction efforts and to voluntarily commit to meeting the demands of a global crisis before being forced into a policy solution that may be too constraining and too late.

Mention of specific companies or securities should not be considered a recommendation to buy or sell that security. Past performance is no guarantee of future results.

Posted: June 26, 2013