Bracing for a government crackdown on carbon emissions, a number of companies are volunteering to disclose their energy plans to gain market cred.
Through the London-based Carbon Disclosure Project, participating businesses are voluntarily submitting detailed reports on their carbon emissions, according to a New York Times reports. With the promise of further regulation on the horizon, the project allows companies to get ahead of the game and change their energy practices. And, experts say, the trend may be the best way to change market forces until broader regulations come to fruition.
To date, the Carbon Disclosure Project so far counts nearly 3,000 companies that believe curbing emissions is a worthwhile investment.
“With the regulatory framework changing, how companies handle carbon is a core risk factor,” said Jack Ehnes, chief executive of the California state teachers’ pension fund, Calstrs. “Smart companies will take C.D.P. information and realign their strategies.”
Paul Dickinson, the founder and chief executive of the Carbon Disclosure Project, said his vision for transparency goes back more than a decade, when he solicited philanthropists and convinced large investors to sign onto his concept. Dickinson admits government regulation is still needed, but says the voluntary nature of his project offers a “frictionless path” toward reining in emissions, writes the NY Times.
For example, Boeing began to focus on energy in 2007, and Boeing workers near Seattle recently plugged drafty floorboards to save countless dollars and kilowatts of energy. “The questions take you through and say, ‘Do you have environmental performance targets?’ We didn’t, but now we do,” said Mary Armstrong, the company’s vice president for environment, health and safety.
Indeed, the Environmental Protection Agency is poised for a crackdown, which will require power plants and industrial operations to report emissions by 2011. In Europe, the E.U. has been monitoring carbon emissions since 2005; since 2003, Japan has required companies to report energy consumption and efforts to reduce use.
Still, critics say the Carbon Disclosure Project is no substitute for government regulation, which would ostensibly include external auditing of emissions figures. Companies point out that reporting is not only onerous but could reveal information to potential competitors. “There is disclosure, and then so what?” said Hewson Baltzell, the cofounder of Innovest, a financial research firm.
But the numbers speak for themselves: Some 2,500 major companies completed at least part of the project’s questionnaire last year, including 330 U.S. companies. (The questions pertain to how much energy a company consumes and how it might be vulnerable to climate change.) Current figures show that the disclosure project has response rates of 60 percent for most U.S. industry sectors, and even higher rates for utility, energy and chemical companies like DuPont, Chevron and others.
“With each year we are able to compare performance on greenhouse gas information with new levels of granularity,” said Rob Bernard, chief environmental strategist for Microsoft, which is working to publicize the project’s data. “Now we just have to hope that more people read it and care.”