The Risks

There are three main categories of risk. The first is financial losses from damages and remediation due to climate change. These are direct costs that companies would have to pay if their facilities or other assets were damaged or dislocated by weather-related impacts or rising ocean levels.

The second kind of risk results from regulatory developments at the international, national and state** levels and pressure from risk managers, investors and consumers to constrain carbon emissions.

A third risk is legal action from investors or other parties who attempt to hold officers and directors accountable for management decisions related to “off balance sheet” environmental risks and liabilities.

The Opportunities

Companies can both manage risk and position themselves for changing market conditions by understanding the carbon intensity of their activities and products and developing appropriate policies and management strategies.

One management response is to consider preventive and adaptive measures that will protect against direct risks from climate change. A second approach is the development of less carbon-intensive processes and products that improve economic efficiency and/or tap new markets. A third option is to bank or trade emission reduction credits in anticipation of future carbon constrained regulatory environments.

An evaluation of the company’s current emissions baseline is essential for valuing greenhouse gas management investments and determining their return.

The Investment

A small investment in developing a greenhouse gas inventory and implementing corporate strategic responses can provide long-term dividends from effective early action.

• greenhouse gas measurement and reporting
• inventory and baseline development
• project design and analysis
• project and system validation and verification.

The Benefits

Managing greenhouse gas emissions can improve operational efficiency, reduce energy consumption, and increase market share. It can reduce risks, increase shareholder value, and augment a corporation’s reputation.

The First Steps

Organizations that wish to report emissions should take the following steps:

1: Prepare a GHG inventory

2: Establish GHG objectives

3: Select projects for GHG reductions or removals

4: Manage the project

5: Validate and verify

Futurepast can assist you with this process or help you train an interdisciplinary team to manage the GHG inventory and reduction/removal projects. Our consultants can also provide expertise in inventory design and project implementation. For added quality assurance, Futurepast will conduct an independent audit and/or train internal assessors to provide verification services.

For information about our one-day seminar, please click on our Managing Greenhouse Gas Emissions hyperlink.

Notes

* At the 2000 World Economic Forum in Davos, Switzerland, attendees decisively voted climate change to be the leading challenge for the 21st century.

** At the state level, Massachusetts in 2001 became the first state to mandate emissions reductions when it established a "cap and trade" program for its oldest electric generating plants. The following states either now have or soon will establish voluntary greenhouse gas registries:

• New Hampshire
• Maine
• Wisconsin
• Texas and
• California.

In July, 2002, California became the first state in the union to regulate carbon dioxide tailpipe emissions from cars and trucks.

BACK TO TOP