Planet Richard
26 April, 2008
Carbon Footprinting
Carbon footprinting. What is my operation's impact? What does it mean to me, my customers, my investors? How much of this stuff am I really responsible for? How will the changing public and regulatory attitudes change my operational requirements, my costs, my access to markets, my brand identity and the perception of my behavior with my customers?
All great questions.
But, I will contend that it is pretty simple.
Carbon emissions = energy consumption.
Period.
Using lots of energy always has had issues - cost, figuring out how to get an adequate share of a limited resource in a political and social equity context, working with utilities, governments, etc. to maintain dependable supplies, hedging costs with futures, etc.
But now, carbon emissions are very likely to add costs to energy consumption. The same energy access and acquisition issues will remain. But, add to that, costs and scrutiny over the carbon dioxide emissions that occur due to the energy consumption of your enterprise. KaChing!
But, there is more than cost to this equation. Carbon dioxide is now a POLLUTANT. Putting the stuff out or causing your power utility to put it out is BAD and makes you a POLLUTER. O-Oh!
So this changes the strategic branding equation a bit here. Cutting energy consumption will not only save money and lower political risks, it will now make you LESS of a POLLUTER. In fact, shifting to non-fossil energy makes you a net GOOD GUY! Ah-Ha!
How much is that worth? Can you charge a carbon reduction premium to some of your demographics? I think perhaps so. Can you leverage political good will for access to regional markets or production opportunities? I think perhaps so. Hard to strictly quantify these benefits. Not to mention, energy costs are just going through the roof these days, particularly when you add to that the cost for the right to emit carbon dioxide soon to come...
Now everyone seems to be blogging and reporting and discussing just how to do carbon footprinting. What carbon is mine, what is my supplier's, what is my energy utility's, etc.? Which government is setting what rules? What rules will apply to my global operations? Such devilry in these details. But, do they really matter to your strategy? Yes, how you carve up the carbon emission costs can impact the pro formas.
But, so much value is difficult to quantify anyway. Perhaps, if you are an energy intensive industry, it just makes a lot of sense to take a look at investing in energy reduction and carbon reduction so that you can promote those activities to gain market share, pricing power, etc.
But, do more than PR on this. Do some real shifts in energy efficiency, energy procurement, product development from an energy consumption perspective, etc. Because, when the governments do get around to working out carbon footprinting and accounting details, these things will really matter.
Labels: carbon, carbon dioxide, carbon footprinting, climate change, energy, environment, environmentalism, global warming, greenhouse, greenhouse gases, planet.
