Value of Carbon Management
In 2008, a survey of corporate executives published in McKinsey Quarterly  indicated that though climate change is considered important and awareness is high, relatively little is being done in terms of building climate change mitigation, energy usage and emissions reduction into corporate decision-making or operational processes. Now, in 2009, there are indications that climate change, specifically the contribution from energy use, is being addressed by businesses in an overall attempt to reduce cost.
Carbon management, as a whole, is the process by which any company can develop and implement a corporate climate strategy. A typical carbon management structure includes the following principles: measurement of emissions, set emission objectives, emission avoidance and reduction, assessment of residual emission and offsetting. The ultimate object is to achieve financial sustainability whilst meeting carbon targets set by the organization. The key element of Carbon Management principles is to consistently identify the emission source and measure emission from your operation.
Value of Carbon Management
The goal of the principles is to assist organizations in making sound decisions around the reductions in GHGs. These principles can be applied to the decision making process with regards to economic, technological and societal considerations. Ultimately, the principles can be used to assist in developing the appropriate carbon management strategies where the environmental, financial and social benefits are maximized – often, the benefits for each of these will coincide.
- Reducing Input Costs – this is around the various energy, materials, water etc. that a business may use in the production of it’s goods or in the operation of it’s facilities. The goal is to identify where emissions are occurring and reduce them. Today, the success for many climate change programs is built mostly on this ability of the process to identify areas of inefficiencies or waste that can be reduced that lead to cost savings.
- Building Environmental Leadership – creating value for the corporation/facility/project as an environmental leader. Builds reputation for environmental stewardship
- Creating Market Opportunity – through external GHG policies and the reduction in emissions, businesses may create opportunity for direct revenue as a carbon credit provider in those countries where carbon trading/regulation is or will be occurring. Also creates customer loyalty for efforts at being more “green” through the GHG reductions and the ensuing environmental benefits of the products/services being provided.
- Reducing Business Risk – There are increasing costs to all businesses associated with fuels, energy and material procurement that the awareness of the GHG emissions and options for alternatives (Coal vs. Solar, plastic vs. cardboard, one level of recycled content vs. a higher or lower level). In addition, forthcoming carbon regulations will impact business so awareness of current emissions and reductions will allow for mitigation of compliance risks and costs.
 A McKinsey Global Survey: How companies think about climate change, McKinsey Quarterly, Feb 2008
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