Survey of Multinationals Reveals Need for Greater Action on Climate Change

Few companies setting budgets to deal with energy or carbon emission reduction, ERM snapshot finds

Exton, PA — June 14, 2007 — A significant gap exists between the reductions in CO2 emissions needed to stop climate change and the targets that multinational companies are setting themselves, according to a recent survey by environmental consultancy ERM.

ERM conducted a snapshot survey of 25 multinational companies to understand at a high level how they were mobilizing to deal with climate change.

"Companies follow a natural progression from completing a greenhouse gas inventory, to setting reduction targets, assigning resources, creating budgets and ultimately achieving results," said John Curtis, head of ERM's global climate change practice. "The survey showed that while many companies have completed an inventory, far fewer have set aside budgets to actually deal with energy or carbon emission reduction."

Curtis said that, with some notable exceptions, boardrooms are not meaningfully addressing climate change because as yet climate change isn't really impacting their bottom line. To persuade executives to take action on climate change, he said, there needs to be a business case, as with any other issue.

"This business case will become more and more apparent over the next five years as those with low emissions recognize that climate change will nonetheless touch their operations," Curtis added. "As a simple illustration, a bank may have a small carbon footprint relative to a refinery, but sea level increase may influence their mortgage book."

The majority of energy reduction targets set by companies fall in the 10-18 percent range, according to ERM's survey. Most climate change models propose that to stop climate change, CO2 concentrations must be stabilized at 450-550 parts per million — which would require a 25 percent reduction in many of these models.

"If companies genuinely want to make a meaningful difference on climate change, executives need to make their targets more demanding and ask for earlier results," Curtis concluded.