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Was Bali a success? It's too early to tell
Assessing the aftermath of international climate change negotiations always puts me in mind of the twentieth century Chinese leader Zhou Enlai's famous reponse to an inquiry about the impact of the French Revolution: "It's too early to tell".
The fallout from Bali has adopted a model now familiar to anyone who has followed the tortuous history of the Kyoto Protocol and attempts to agree a successor: optimists hail an "historic" moment, while pessimists complain that once again nothing solid has been agreed. Meanwhile, businesses are once again left to cope with a series of equivocal statements that suggest that a new global framework designed to curb carbon emissions is on the cards but fail to give anyone a truly solid picture of what that framework will look like.
The fact is Bali has achieved everything it was ever going to achieve. This was always going to be a meeting about future meetings and the environmentalists and European politicians who worked themselves up into a frenzy of excitement over the prospect of getting emission targets agreed were always going to be left disappointed.
The conference set out to agree a timetable for future negotiations and it achieved exactly that. Moreover, it also undertook some much needed house cleaning, delivering reforms to the struggling CDM, finally recognising the importance of tackling deforestation, and giving the UN clearer direction in how it will address adaptation and technology transfer.
The White House may have poured cold water on the whole agreement by barely waiting until the applause in the convention centre had died out to voice its "serious concerns" and issue a thinly veiled threat to abandon future talks if China and India are not tied into deep cuts.
But that cannot detract from the fact that the US has signed up to an international climate change agreement for the first time and committed to the agreed timetable. There are still plenty of doubts surrounding the post-Kyoto framework, but a deal in 2009 looks more likely now than it did a week ago.
So the pessimists are in the wrong. But then again so too are the optimists.
The idea that just because there will be a new incumbent in the White House by the time the negotiations reach their climax everything will be OK is an absurdly upbeat assessment. The presidential candidates almost all appear greener than Bush but they have given themselves plenty of wriggle room when it comes to climate change legislation and there is no guarantee a new president is going to sign up to a Kyoto successor in a blaze of first term.
Furthermore, there is hardly any limit to the amount of havoc the Bush administration can wreak as the lame duck presidency limps towards 2009. Given Bush's record on climate change it is not unrealistic to imagine US officials returning to their default role as a negotiating roadblock over the next two years, imposing damaging delays on the Bali-agreed timetable. By the time a greener president is elected the whole process could already be on the brink of collapse.
All of this means that it is a case of as you where for business leaders. The business case for investment in cutting energy use remains strong, the carbon market is gaining strength and will become increasingly influential despite remaining flawed in several key areas, and risk assessors will continue to warn that an increase in environmental legislation and green taxes remains highly likely.
However, the critical detailed information needed to inform green investments - such as how much a tonne of carbon emissions will cost, what carbon targets will be agreed, what penalties will be in place for firms that breach them, how different geographies will be effected by green regulations, and which technologies will be subsidised by governments - remains two years away at best.
There are still plenty of reasons to be confident that solid successor to Kyoto will be agreed in 2009, but at the same time any Chinese leader commenting in 200 years time on whether the Bali conference was a success or not may sadly be doing so from a coastal resort in the Himalayas.
The Week in Green
As an environmentalist (and committed miserabilist) it is always tempting to focus on the wastefulness inherent in a modern Christmas. The cards, the wrapping paper, the food, the tree dying slowly in the corner of the room, the constellations of fairy lights, the "comedy" socks you'll never wear and the Love Miles that, if you’re honest, you're pretty ambivalent about travelling. Seriously, the Grinch has got nothing on me.
But given this has been the year that green indisputably went mainstream perhaps I should instead focus on the potential for a more sustainable holiday season.
There are certainly plenty of green gifts out there for environmentally conscious business people and BusinessGreen has taken a look at some of the best ones out there. We've also reviewed a clever little device that will allow you to turn the Queen's Speech off at the wall without even getting up from your Turkey
For the more mercenary among you how's about some cold hard lucre in the form of some carbon futures? Or for those with some cash to splash what about a CHP generator from E.ON, or a greener company car that'll save your business and employees a fortune, or better still a bike?
For those with an eye on the regulatory problems coming up next year how's about a guide to coping with the EU's Reach directive, or any other EU environmental regulation for that matter.
Of course the one thing every green business exec really wants, an international agreement on tackling climate change, may sadly be beyond us. But, then again, you never know.
Whatever you get up to over the holiday season have a great one. BusinessGreen will be taking a break for a week or so from next Wednesday and I look forward to catching up with you again in the New Year.
Cheers,
James
If in doubt, count the carbon
So it's all too good to be true after all.
Of course we all knew the UK's carbon emission figures had just a passing acquaintance with reality, but now researchers at Oxford University have revealed how estranged the two are.
According to a new study, titled Too Good To Be True? The UK's Climate Change Record, the UK's official claims that emissions have fallen 15 per cent on 1990 levels are dangerously incomplete and misleading.
The headline figures look impressive but the vagaries of the official figures collation mean that emissions from shipping, aviation and perhaps most significantly imports are not included.
Take these emissions into account - and given the atmosphere does not care if the emissions appear on a balance sheet somewhere there is a strong case for including them - and far from seeing UK emissions fall they have climbed by almost a fifth since 1990.
It is slightly unfair to suggest the government has been deliberately deceiving us. All countries exclude aviation, shipping and import related emissions from their official calculations and are very open about how their figures are calculated. Moreover, the fact that the supposed fall in UK emissions is down to the shift in the energy mix from coal to gas rather than any successful green energy policy has been widely reported.
However, the study does raise an interesting question about what both governments and businesses should or should not include in their emissions reporting.
It is easy to understand the temptation to exclude as many emissions as possible from calculations, but from a risk perspective it is best to resist this temptation and include pretty much everything you can.
While it is fair to argue that the embedded carbon in imported products should be recorded by the company that manufactures the product rather than the company that buys it, other emissions external to a company's facilities, such as those from corporate travel and supply chains, should certainly be included in carbon accounts.
It is only a matter of time before a bunch of academics kick up a PR storm by undertaking a study on a major firm's emission reports that finds that, as with the UK, their figures are on the optimisitic side.
Moreover, with emission reporting standards evolving fast (witness the launch today of the Prince of Wales' Accounting for Sustainability guidelines) firms already reporting their emissions would be advised to take as conservative approach as possible.
It would be hugely embarrassing for any firm if the reporting standard that will inevitably emerge over the next five years demands that they include emissions that they had previously ignored, leading to a huge spike in their reported emissions.
It is hardly the most sophisticated piece of advice, but when it comes to corporate carbon reporting if there is any doubt about whether emissions should be included or not you are best off erring on the side of caution and sticking them in.
The Week in Green
I recently met with David Symons, director of corporate services at WSP Environmental, who expressed concerns that carbon was becoming a bit passé.
Not that he was advocating that firms should move away from carbon cutting policies – quite the opposite in fact. He argued that as it became the norm for larger firms to boast carbon strategies businesses would find it harder and harder to gain a competitive advantage through instigating such initiatives.
They would, of course, risk considerable commercial damage from regulators and customers by not having such a strategy, but only the very best carbon cutting initiatives would be able to stand out from the crowd.
One potential solution to this problem, according to Symons, is for firms to augment their carbon cutting strategies with broader environmental policies that allow them to carve out a leadership position in other areas such as water conservation or the phasing out of hazardous chemicals.
When it comes to hazardous chemicals in particular there appears to be plenty of potential for firms to stand out from the poorly performing crowd. New research highlighting the number of children's toys containing hazardous chemicals certainly suggests that there is space in the market for a firm that makes a fuss about its refusal to use toxic nasties. And if the potential for brand leadership is not incentive enough imminent EU regulations should be forcing vast numbers of companies to assess their chemicals strategies.
Focusing on fresh ways of greening your business may also provide some light relief from the increasingly confusing rules and guidelines governing carbon and climate change. This week alone we've had (entirely justified, legitimate and accurate) reports slamming the UN's trading scheme, criticising Europe's trading scheme, and warning that too many businesses are ignoring the increased risks of coastal floods.
Not that the outlook is all doom and gloom. How can it be in a world where green jobs are booming, electric cars are safer than ever, submarines will soon be running on fuel cells and even David Cameron and his wind mill are having intelligent ideas on renewable energy?
Have a good weekend.
Cheers,
James
Now that's what I'm talking about
Yesterday, I posted on the importance of ensuring your company's green message is delivered through a green medium.
A point ably demonstrated by the good folk in the Mercedes-Benz press department and their woefully daft decision to snail mail a press release and a photo to journalists to promote its new wind turbine.
Well, perhaps they could learn a thing or two from their counterparts at US energy giant Pacific Gas and Electric (PG&E), who last month decided to promote the company's green energy investments using, wait for it, a solar powered billboard.
In a word: genius.
Nice wind turbine, shame about the press release
I know a journalist moaning about the world of public relations hardly constitutes news, but sometimes you just can't help it.
This morning an envelope appeared on my desk containing a two page press release (two sheets of one-sided printing) telling me that Mercedes-Benz has just installed a wind turbine at its site in Milton Keynes. It was accompanied by a colour photo of said turbine.
Now, I'd like to be the first to congratulate Mercedes-Benz on this excellent green initiative, but am I the only person that finds their means of communicating it a trifle strange?
Have they not heard of email? What is wrong with double sided printing? What exactly am I supposed to do with the photo? Frame it and put it on my desk.
I feel a bit mean pointing this out - after all the company is investing heavily in an indisputably green technology and it is a bit unfair to focus on two sheets of paper when the turbine will generate enough green energy to power a 20 person office.
But it is still hard to imagine what possessed the PR team behind the press release to send out a green announcement using the most carbon intensive and wasteful means they could find.
The world of green business has opened up a whole new line of attack for marketing and PR departments everywhere, but it comes with risks and the need to marry green content with the appropriate communication medium has never been more important. You wouldn't promote a green initiative by hiring a plane to write about it in the sky, so why put it on a paper press release?
The paperless office may still be decades away and I am as guilty as the next man when it comes to occassionally wasteful behaviour, but if you are going to tell people that your company is going green then cutting down on paper use and using electronic documents wherever possible is one of the simplest things you can do to create the impression that you are walking the green walk.
How greener supply chains could improve my morning
Every morning on my way to work at BusinessGreen's central London bunker, I walk along the world famous shopping thoroughfare that is Carnaby Street.
You'd think walking past all the chic little boutiques would be a rather pleasant affair, but regardless of whether I am taking a gentle early morning stroll at 7:45 or lie-in induced sprint at 9:55 I invariably find myself running the gauntlet of reversing, honking, gridlocked delivery vans as they jostle for position on the narrow, otherwise pedestrianised street.
This experience is infuriating for a number of reasons, not least amongst them that dodging slow moving Ford Transits first thing in the morning is unlikely to put you in a great frame of mind for the rest of the working day. But it is also a highly frustrating working example of how a sizable chunk of a firms' environmental footprint can be attributed to processes that could be easily optimised with just a little bit of lateral thinking.
The fact is that most of the stores on Carnaby Street are so small that their daily or weekly deliveries cannot fill a large lorry, hence the herd of small vans and trucks each delivering to their own little store. It doesn't take an expensive consultant with an MBA in time and motion studies to work out that this is a hugely inefficient scenario both in terms of supply chain costs and carbon emissions.
It would be far more efficient for all the companies to co-operate and develop a shared distribution and delivery infrastructure. Deliveries could go straight from the docks to an optimally located distribution point from where three or four large trucks a day could take requested deliveries to Carnaby Street. They may struggle to get articulated lorries down the narrow street, but a few porters could surely solve that particular problem.
It would be a huge, but not insurmountable, logistical challenge to make this work. But if it did the net result would be fewer journeys, less congestion, greater economies of scale, lower costs, drastically reduced carbon emissions and a quieter walk to work for me.
This idea seems so obvious and mutually beneficial for all concerned that the only question is why has it not happened already?
I did once hear of a pilot scheme in Bristol that aimed to serve many of the city's high street stores from a single distribution centre, but that aside the idea of integrated or outsourced supply chain logistics and distribution has singularly failed to take off.
The primary argument against such an approach is that the effective management of supply chain and distribution represents a competitive advantage for retailers and as a result they want to keep them under their close control.
Businesses - or perhaps that should be supply chain managers, supply chain consultants and supply chain software providers - frequently point to the timely delivery of products in response to customer demand as a key factor in commercial success and an area where a well-oiled internally-controlled supply chain can provide measurable competitive advantage.
But while this is undoubtedly the case when you are looking at the retailers' relations with the producers and manufacturers at the origin of the supply chain - where the ability to knock down prices, demand a certain level of quality and select the right products is a key factor in competitiveness - is it really true of the supply chain logistics, transport and distribution methods that get products from factory to store?
Could it not all be outsourced to a third party specialist, much in the way an IT department is outsourced. It would be a gargantuan organisational challenge but that third party service provider could then integrate the distribution network for one retailer with those from other retail customers, optimising journeys and slashing costs and emissions in the process.
Several years ago none of this would have been possible on the grounds that supply chain logistics still represented an area of commercial competitiveness - something I saw firsthand when working stacking the shelves for one of the UK's biggest supermarkets. At the time the supply chain and ordering systems were such a mess that each week during the summer the store would oscillate between running out of lettuces at midday and having so many that at clsing time we'd be selling them off for five pence a time.
Against this backdrop supply chain excellence was a bona fide commercial differentiator because, as irate customers would frequently tell me, if you didn't have lettuces people would just go elsewhere.
But a few years on it is remarkably rare to find the shelves in any UK supermarket anything other than fully stocked. All the major chains have such sophisticated finely tuned supply chain and ordering systems that the mix of products flowing into the store changes constantly in line with the weather, sporting events, fashions, TV ads and the vagaries of customer demand. The sold out signs are left gathering dust in the cupboard.
Similarly all the high street stores have determined what products will be in fashion months in advance in an effort to ensure that supply always closely matches demand. This might not seem the case when you are fighting for the last pair of jeans currently featured on all the fashion pages, but in reality supply chain and marketing departments are so closely integrated that shortages or unpredictable spikes in demand are pretty rare.
In short, the competitive edge delivered by strong supply chain logistics has been hugely diminished. If both you and your competitors are operating basically the same supply chain software, distribution network and logistics techniques where is the commercial argument for keeping these functions in house? Why not slash the carbon emissions and financial cost by integrating supply chains together through a specialist outsourcer?
Retailers would need water tight service level agreements and the ability to impose massive fines on the outsourcer if deliveries were not on schedule. But overall it would be cheaper, greener and would free up retailers to focus on the things that really matter to their business: marketing, product development, low costs, store design and customer service.
Perhaps the logistical challenge of integrating the supply chains of every store on Carnaby Street would prove too daunting, but the benefits that could accrue mean it is a concept that is at least worth trialling.
