Cutting emissions means cutting costs

Cutting emissions can save money and improve a company’s reputation, a study shows.

Reducing emissions is also an opportunity to innovate and a duty to the wider community, Dr Bettina Wittneben of the Smith School of Enterprise and the Environment (Oxford University) and Dagmar Kiyar of the Wuppertal Institute for Climate, Environment and Energy say.

Their research, published in a special issue of the journal Management Decision, shows how RWE, one of Europe’s most polluting energy companies, is trying to cut emissions and improve its public standing by reducing its use of coal, increasing its efficiency and its use of renewable energy.

“Businesses are under pressure from regulators, consumers and other companies to reduce the size of their carbon footprint,” Dr Wittneben says. “That means companies all over the world must start incorporating climate change measures into their business decisions.”

A study in 2006 by WWF and the Institute for Applied Ecology found that 30 power stations produced 10 per cent of Europe’s emissions. Six of those plants belonged to RWE including four in the top 10, prompting the German firm to set targets for emissions cuts.

The researchers believe that large companies like RWE have accepted the need to cut emissions but that other, smaller firms fear becoming uncompetitive. Their study warns that climate change “can only be tackled by profound changes in the patterns of production and consumption that our economies have come to rely on.”

The scientists are urging businesses to measure their emissions, set emissions standards for themselves and suppliers, back community measures to tackle climate change and publicise the action they are taking.

Dr Wittneben says: “We are trying to give managers an idea of what they can do because many firms don’t have the resources to do their own research.

“Many people think it is only developing countries that must adapt to climate change. This is not true. Every organisation is part of a larger community so it is important for businesses to help others adapt to prevent social unrest.”