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The Carbon Disclosure Project has been working to engage the corporate and investment communities in the issues associated with climate change for seven years. In that time, climate change has become almost universally accepted as a scientific reality and people have started asking ‘What can we do to deal with it?’ rather than 'Is it happening?'.

The last 12 months in particular have demonstrated that business communities are increasingly conscious of the role they can play in addressing the challenges of climate change. The Carbon Disclosure Project has a key part in this dynamic by encouraging and facilitating the measurement of carbon emissions by large companies and organisations all around the world.

The burning questions facing business 
For businesses trying to make sense of climate change, it can be instructive to look at the growth of corporate social responsibility (CSR). If governments were generally considered to be managing the world in a coherent and credible way, corporations would not have to worry about CSR. But the reverse is sadly true. The public now expect large businesses to take an active interest in protecting their customers. We don't yet expect corporations to save the world, but it is no longer acceptable for them to be part of the problem.

Over the last year businesses have been asking themselves a range of questions associated with climate change. These questions include:
• Are you carbon neutral?
• Have you ensured you are sustainable?
• Are you implementing CSR properly?

How can business answer these? Not easily, because such questions are ill conceived. They require simple binary answers to a highly complex subject. Let's change some words and see how the questions sound:
• Are you internet compliant?
• Have you ensured you are internet correct?
• Are you implementing the internet properly?

None of which make any sense, of course. The internet is a large and complex area of business that represents a constant, ever-changing set of risks and opportunities. It cannot be addressed by plain ‘yes’/’no’ – solutions and our experience with the ‘digital revolution’ can now help with the ‘green’ evolution. The issues of climate change cannot be resolved by ticking a number of compliance boxes. Instead, companies and organisations need to develop strategies that will significantly change the way they operate and the impact they have on the environment. And it’s becoming increasingly clear that consumers do not want to buy from organisations that are not putting such strategies at forefront of their business philosophy. 

Plastic bags and tipping points
The debate that is currently going on in the UK over plastic bags is interesting in many regards. Ending the production and disposal of plastic bags is not going to save the planet. In the grand scheme of eco things, their impact on climate change is quite small. But even though campaigns against plastic bags will do very little to help solve the ecological crisis we face, they show a strong desire for action and a sense of urgency. As such, they are symbolically very important.

We are only just beginning to come to terms with the full meaning of climate change, but the last year has seen several major advances in the corporate and investor debate on climate change. It is a cliché to speak of tipping points, but the image that this idea conjours up is illuminating. The momentum behind climate change is feeding off itself, growing like a giant snowball rolling a hill, and it is being driven by an almost universal acceptance of the inconvenient truth.

And although some companies see the consumer response to climate change as not exactly convenient, others are starting to realise that it is potentially profitable. Toyota, for instance, are basking in the glory of the Prius brand, while rival car manufacturers feel aggrieved to be left on the sidelines of a consumer revolution.

Mixed messages and greenwashing
There are still lots of massively confusing phrases being bandied about. Phrases like ‘environmentally friendly’. These unfortunately tend to soften or trivialise the scale of the problem. Contrast ‘environmentally friendly’ with notions such as ‘air safety friendly’ or ‘cancer friendly’.

While consumers are taking great interest in climate change issues, it is now evident that they are not engaging with false promotion, which is often referred to as ‘greenwashing’. The businesses that are proving to be successful can back up their claims by taking action over climate change. Those that are faltering are unable to grasp the long-term impact of climate change on our planet and our business trends.

Among the business figures emerging as being switched on to the problem is the ever brand-conscious Richard Branson, who has given considerable thought to the issues around climate change. Retail giant Wal-Mart (which owns ASDA in the UK) is also beginning to put climate change right at the heart of what it does and has partnered with the Carbon Disclosure Project to discover the greenhouse gas emissions in its supply chain. That is a big step. Wal-Mart is the biggest retailer in the world and the eighth largest trading partner of China – larger than Canada. Another 20 major companies, including Unilever, Tesco, Proctor & Gamble, Nestle, Dell and Hewlett-Packard, have followed Wal-Mart's lead.

Small changes can make a big impact
Lord Adair Turner, Chairman of the newly formed Climate Change Committee, has said:

“The first step towards managing carbon emissions is to measure them, to work out how large your business emissions are, and from what processes and what products they arise. Because in business, what gets measured gets managed.”

It is only when businesses have a grasp of the sources and the exact levels of emissions that they are in a position to act on them and reduce them. Many of these reductions will be driven by technological innovation – and capitalism is an incredibly powerful tool for bringing about technological change. But because climate change is an externality – the cost is not always borne by the polluter – it is also vital that public policy creates systems that will incentivise reductions. Cap and trade schemes and taxation can both play an important part in encouraging businesses to measure, manage and reduce their emissions.

It is only through collaboration of corporate and investment communities with government and international bodies that we will achieve the levels of emissions reductions required. If more businesses progress further down the twin paths of measurement and management, and they do so within the context of a public policy that spurs on business leaders and drags along the laggards, then we will be able to offset the danger that climate change poses to our world. And at a surprisingly small economic cost, too.

The future and beyond
It is clear that the level of emissions reductions required is not a cut of, say, 10% on business as usual by 2050. We really need to see global cuts in the region of 50% from 1990 levels if we are to avoid catastrophic temperature rises. Because of growth elsewhere, for much of the developed world that means cuts in emissions in the region of 80% by 2050, which is the figure that US presidential hopeful Barack Obama has suggested.

These percentage challenges are significant for everyone. Companies and organisations must be true to themselves and integrate climate change issues into the very core of their business activities, rather than simply bolting on ill-conceived promotions. The businesses that do so will not only keep their existing customers, they will entice many more – and these are the ones that will be the long-term winners. 

About the Carbon Disclosure Project
The Carbon Disclosure Project (CDP) now represents 385 investors with combined assets of $57 trillion, which is more than the GDP of the world. Over 1,300 of the world's largest corporations report their emissions to the CDP website. This would seem to show that the issue of climate change is well beyond a tipping point and has now become a mainstream concern.

Climate change is certainly now a mainstream concern for business. As former US president Bill Clinton said at a CDP launch event in 2007: "The Carbon Disclosure Project is vital and we have got to get everyone involved."

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