What's going on here? Report suggests execs stalling climate strategy in post-Copenhagen era

Many businesses aren't in hurry to make sustainability part of their end-to-end operations.
Written by Heather Clancy, Contributor on

There is much data of interest in the roughly 40-page report on climate change released this week by the Economist Intelligence Unit, but for me the most telling statistic was this: while almost half of businesses have some sort of climate change strategy in place, only 10 percent of them have a strategy that encompasses their supply chain and/or external business partners.

"After Copenhagen: Business and Climate Change," reflects the responses of 542 senior executives from around the world polled after the close of the UN Copenhagen Climate conference through January 2010. About half of the executives were from companies that were less than $250 million in annual revenue, while 32 percent represented businesses with yearly sales of more than $1 billion. Slightly more than half (56 percent) were C-level or board members. The sponsors of the report include The Carbon Trust, HItachi, IBM and 1E.

For me, the supply chain number is telling because in part it actually declined year over year. For 2009, about 17 percent of the respondents said they included supply chain in their climate change strategy versus 10 percent for 2010. A higher percentage of companies, close to one-third, said they had no "cohesive" strategy.

For me, that's important in the context of companies such as Wal-Mart, which is basically dictating sustainability best practices down to its smallest suppliers, or Hewlett-Packard, which is likewise trying to serve as a sustainability model for its extensive supply chain. The fact is, a company can only be as sustainable as its entire supply chain from end to end. Without that focus, strategy cannot help but be fragmented.

Other findings in the study were somewhat of a bummer for sustainability enthusiasts like myself. For example, even in the area that seems like a given -- energy efficiency (since it promises to cut costs) -- the responses of executives taking action seem lower than expected. Only 41 percent of the respondents report that they have moved to improve energy efficiency across their organizations; only one-third have moved to address the carbon footprints of their products or services.

Um, I'm sorry, but why wouldn't EVERY company try to be more energy-efficient, even if you are leasing your office space or facilities and not paying those bills outright?

I chatted about the Economist report with two executives from sponsor 1E, which makes power management software for desktops, laptops and servers: Sumir Karayi, founder and CEO, and NIck Milne-Home, U.S. president of 1E. 1E boasts an impressive client roster with the likes of AT&T, CSC, Dell, Microsoft, Nestle, Verizon Wireless and the U.S. Air Force among those that are publicly using its software. Ford, which is saving at least $1.2 million on its energy costs annually by using 1E's NightWatchman, is another major customer.

Karayi says his company has been able to win meetings specifically because certain businesses like those listed above ARE recognizing the overall impact that technologies that are perceived as "green" could have on their overall IT efficiency.

Both executives say one reason for the seeming paralysis of sustainability efforts would seem to be the lack of government direction on climate change. Indeed, close to 70 percent of the Economist respondents "strongly agree" or "agree" with this statement: "uncertainty over national climate change policy makes it difficult to plan our corporate strategies."

The government, rather than public opinion, holds sway here. Which means that everyone will be watching legislation and environmental leaderships closely during this critical post-Copenhagen year.

This post was originally published on Smartplanet.com

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