Can we still go green as we head for the red?

The Carbon Trust touts the business benefit of tackling climate change - but it may fall on deaf ears.

Last Updated: 06 Nov 2012

The environmental organisation has suggested that companies who fail to tackle climate change could be taking a hit on the value of their business. It reckons that while firms could boost their market value by taking steps to tackle emissions, there are risking potentially hefty losses if they don't. With a shift in regulation around the corner, it's probably true. Trouble is, will anyone be listening?

The Kyoto protocol is set to change next year, which may force companies to take climate change more seriously if they want to avoid falling foul of legislation. This means that, to compound the pressure that many businesses are experiencing right now - of getting hammered by loss of credit and consumer confidence - they may soon be taking a beating from failing to do their bit to save the planet too. It's like watching an unemployed banker carrying his possessions home in a box, and then having a go at him for not recycling the cardboard.

The Carbon Trust's research, which covered firms worth £3.8trillion globally, looked at six sectors of the economy - including car manufacturing, brewing and consumer electronics, and concluded that automotive firms stood to gain the most by adopting greener strategies, in its case hybrid and electric technology. But the car sector also risked the taking the biggest hit if they failed to make the changes needed to meet ever more ambitious emissions targets.

It's a good time for the Carbon Trust to point this out. As we head into what looks like a recession, profit boosting (and avoiding losses) sits very much at the top of the business agenda. Anything that can help is probably worth a punt. Trouble is, the whole CO2 issue is still contentious. While most companies have now jumped on the bandwagon, few people seem to know exactly where it's heading. Companies may be looking to boost profit and cut costs in much more tangible ways. When you're trying to put food on your employees' table, noble tasks like saving the planet from a distant apocalypse unfortunately tend to take a backseat. And any changes based on legislation will be met with a grumble.

Bruce Duguid, head of investor engagement at the Carbon Trust said: ‘The financial risks of inaction are just too vast to ignore.' That may be so. But is the financial reality of the next few months going to make them even harder to stomach?

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