Connecting, Nurturing, Creating for Sustainable Environment

Business Response
   

 

Business Response

 
The business case for climate change is more complex than a simple cost / benefit analysis. Organisations formulating climate strategies must:
  • Understand their issues
  • Minimise their risks
  • Maximise their opportunities

Businesses all over the world are considering how to best manage the transition to a low carbon economy; managing growing regulations, investor, physical and reputational risks, all while exploring growth opportunities and positive bottom line results. For most companies climate change begins as a risk management issue.

Climate change also represents one of the greatest business and investment opportunities and it is important that Hong Kong business look forward and pursue its potential in clean energy investment. Globally, many companies are already going ‘green’ and sending signals up the supply chain that tomorrow’s products will need to show higher levels of carbon reduction. Hong Kong business’ need to start planning for a low carbon future with the knowledge that climate change policies will impact their business while seeking new opportunities for competitive advantage.

Achieving significant emissions reductions in Hong Kong requires action from government, business and consumers.

Recommendations for Businesses:

  1. It is vital to assess climate risks and integrate this into their business strategy.
  2. Businesses should cooperate within and among sectors to ensure best practice and set a benchmark. This will also facilitate innovation and knowledge sharing.
  3. Making the requisite changes will help businesses attain financial stability in the long run and capture opportunities and market growth.
  4. Businesses play a crucial role in ensuring energy efficiency, low carbon transport and renewables. 

6 Reasons and Examples for Hong Kong Businesses to Reduce their emissions

 

Improved Energy Efficiency

For many organisations the efficient use of resources, particularly energy, is the first place to achieve cost savings through reduced energy bills. Whether you take low-cost actions, or invest in long-term solutions, all cost savings go straight onto the ‘bottom line’, and these savings are pure profit.

 

The MTR Corporation developed a Climate Change Policy, which aims to reduce emissions and waste through the establishment of a change management strategy. The policy puts forward the initiatives and methodologies which are utilised to progressively reduce MTR’s environmental footprint in the future. Key actions which have taken place under the policy include the assessment of risks presented by climate change, as well as the measurement and mitigation of their carbon footprint. For example, an initial assessment identified rail operations and property management as the biggest sources of GHG emissions. The MTR administered several actions towards reduction of these emissions, such as the USE (usage, staff and efficiency) programme. This involves controlling energy through optimization, educating staff on energy efficiency and upgrading to more energy efficient technology.

 

Cost Savings

Companies that set GHG reduction and energy efficiency targets are finding they are saving money through reduced energy costs. According to Carbon Trust a 20% cut in energy costs represents the same bottom line benefit as a 5% increase in sales in many businesses.

Aware that only with sustainable practices will we be able to grow and maintain our business, Hang Lung Properties has incorporated sustainable design practices into all our new developments in mainland cities.

Through the installation of water-cooled air-conditioning system, energy-saving lighting and demand side management for improving energy utilization among our investment properties in Hong Kong, we achieve a saving of over 25 million kWh and HK$28 million in terms of electricity expenses within four years from 2005 to 2008.

 

Enhanced Reputation and Leadership

Increasingly consumers are receptive to companies working to tackle climate change and ‘early mover’ companies have the opportunity to demonstrate leadership and enhance their reputation. According to a study by the Climate Group, GE is the most often named climate-change brand leader in the U.S. and Tesco in the UK.

General Electric’s ‘myecomagination’ designed to make ecomagination more personal for UK employees, allows them to measure their own personal carbon footprint, reduce it and save money. In 2007, Green Wizards were established at 40 UK sites to rally employees and implement carbon reduction schemes from recycling and biking to work to switching off lights and turning down heating. Every employee received an energy saving light bulb and free workshops were held with the Energy Saving Trust.

 

Reduced Risks from Legislation

Rising levels of compliance for businesses, due to tightening regulations in energy efficiency, building standards, waste and emissions look set to increase worldwide. It is only a matter of time before Hong Kong enacts carbon constraints.

Forward looking companies in Hong Kong such as CLP, Hongkong Electric and Cathay Pacific are already conducting regular assessments of the emerging regulatory trends and scenarios where they do business. An emissions strategy will help assure that long-term investments are aligned with long-term regulatory trends and goals.

CLP recognises that environmental regulations help to establish a level playing field, where all are held to the same standard of environmental performance. CLP expects, and advocates sensible new policies regarding greenhouse gas emissions. At the same time, they try and anticipate how and when regulations may change, to ensure that their business strategies are robust.

 

Competitive Advantage

Businesses can gain competitive advantage by responding early to low carbon business opportunities. Late adopters, by contrast, run the risk of falling behind. Progressive companies can also help influence and shape policy development, thereby having a measure of control over their future business environment.

HSBC adopts a four-step process to achieve carbon neutrality. First, it measures its annual carbon footprint from its operations. Second, it sets targets with respect to its electricity use, carbon dioxide emissions, water use and waste generation, and undertakes measures to achieve these reduction targets. Third, it purchases “green” electricity wherever possible, e.g. from renewable sources. Finally, the bank offsets the remaining emissions through investing in third-party verified projects that generate credible carbon credits from both the compliance and voluntary markets.

 

Avoid Costs of Physical Risk & Stranded Assets

Businesses need to consider the risk and costs of damage to assets as a result of extreme weather events. Businesses also need to factor in the possibility of stranded assets – particularly of fossil-fuel power stations and other high-emission industrial infrastructure - as a result of tighter national and international emission caps and more expensive loans (because of the higher risk associated with high emission assets).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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