26/09/2008 - “Trillion Dollar Wake-Up Call” For Business
Companies that take decisive action to tackle their carbon footprint could significantly increase in value, new research claims.
The Carbon Trust argues that proactive, forward-thinking firms that embrace the shift to a low carbon economy could increase in value by up to 80%.
However, they also warned businesses that didn’t adapt and were unprepared could be jeopardising up to 65% of their value.
The study, carried out by analysts McKinsey and Co, focused on the following six sectors, which have a combined estimated market value of $7 trillion: aluminium; auto; beer; building materials; consumer electronics; and oil.
It found that some industries, such as the automobile industry had significant potential for both increased opportunities (60%) and risk (65%). Other industries, such as oil and gas had limited scope for increasing value due to good environmental practice (up to 7%), but still had the potential of losing up to 35% of their value if they failed to put tackling climate change at the top of their strategy.
Tom Delay, chief executive of the Carbon Trust, said businesses must act now.
He argued:
“Climate change will cause a revolution in business and our findings should act as a trillion dollar wake-up call. Companies that prepare now and develop new strategies will reap the commercial rewards of the move to a low carbon economy.
“The financial risks of inaction are just too vast to ignore. We can see a trillion dollars of company value change, with leading, well-positioned companies gaining, and badly positioned or slow companies losing out.”
Mr Delay urged businesses to immediately incorporate climate change into their core strategy decisions, and also called on governments to create a policy framework that rewards firms who take steps to be more environmentally aware.
He said:
"We have a short window of opportunity to act, but at present business and investor actions are way out of step with the need to tackle climate change.”
Another recent study claimed the Carbon Trust had helped UK businesses save around £1 billion in energy costs and carbon emissions since it was launched in 2001.
Source: Carbon Trust, 22/09/2008