Despite economic conditions, businesses are investing in climate change
VANCOUVER, May 26 /CNW/ - Eighty-two percent of Canadian executives believe that a response to climate change is imperative today and plan immediate increases on spending for climate change initiatives, according to the new report Action amid uncertainty: the business response to climate change, based on a survey from Ernst & Young.
"Despite uncertain economic conditions, we're seeing companies in the province place an increased emphasis on climate change initiatives," says Mike Mannella, Leader of Ernst & Young's Climate Change and Sustainability Services practice in British Columbia. "Particularly in B.C., legislative drivers are forcing companies to take a look at the importance of climate change, but beyond that, businesses are really recognizing the value this investment can make to their business."
Mannella notes that more than 90% of executives surveyed globally indicate that climate change governance rests with C-suite executives or board members. This reflects the growing strategic importance of climate change for many organizations, who understand that climate change is not just a risk area but also an opportunity to reduce costs, increase revenue, and gain competitive advantage. Canadian participants in the survey agree, with 71% of Canadian respondents indicating that their company already has an enterprise-wide climate change program targeting key business drivers, and another 11% planning for implementation in the next 12 months.
Canadian respondents also compared impressively with their global counterparts; while globally, 70% of those surveyed expect their companies' spending on climate change initiatives to increase over the next two years, Canadians ranked 12% higher in this regard. And the investment will be significant, with nearly half of Canadian respondents planning to spend between 0.5% to more than 5% of their revenue on climate change initiatives. For a US$1 billion company, this represents an anticipated spend of US$5 million to US$50 million annually.
Canadian companies are taking a comprehensive approach, expanding their climate change efforts beyond the enterprise, through their entire supply chain. Forty-three percent of respondents said they are working directly with their suppliers to help them reduce their carbon footprint, while another 29% say they have begun such discussions.
"In B.C., we only have to look as far as the carbon neutral government and Olympic Games, the carbon tax, the recently announced Clean Energy Act, or the legislation requiring reporting of GHG emissions to see that we understand the importance of being considered leaders in this space," says Mannella.
Globally, the survey findings are predominantly consistent in all participating countries, with some additional trends emerging across all countries surveyed:
- Energy efficiency is a top global priority, with 82% of respondents
planning to invest in energy efficiency initiatives over the next
- Customer demand is driving investment. Changing customer demands are
driving corporate climate change activities according to 89% of
respondents. As a result, 65% percent of executives intend to focus
their climate change investments on new products and services to
respond to changing customer demands.
- Equity analysts are incorporating climate change initiatives into
company valuations. Forty-three percent of the senior executives
surveyed believe that equity analysts currently include climate
change-related factors in company valuations.
- Climate change is generating new revenue opportunities, such as
developing more efficient products, building a portfolio of carbon
assets, investing in clean development mechanism projects, clean
technologies and innovative IT solutions.
- Government policies strongly influence climate change strategies.
Ninety-four percent of global respondents see national policies as
important or very important in shaping their climate change
strategies, with 81% recognizing the importance of global or
The report is based on a survey of 300 global corporate executives across 16 countries. Ernst & Young commissioned the survey to provide a status update on corporate responses to climate change issues in 2010, the half-way point in the first commitment period of the Kyoto Protocol.
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SOURCE EY (Ernst & Young)
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