"Private sector can act to cut energy use without waiting for government"
Moving toward a low-carbon economy was high on the agenda of policy-makers prior to the financial crisis and ensuing global recession. Priorities shifted with these events, but a series of announcements this fall suggest this shift may have been temporary.
Ottawa announced it is making progress in meeting the carbon emission targets set out by the Copenhagen accord. The British government launched the world’s first investment bank with the sole purpose of “greening the U.K. economy.” And in his victory speech, U.S. President Barack Obama spoke about the “destructive power of a warming planet.” The mention was brief, but for a nation still reeling from the extreme force of Superstorm Sandy — something the mayor of New York City directly linked to climate change — the message was clear.
More pronouncements and policy discussions will follow the UN Climate Change Conference being held in Doha. Yet in the immediate term market forces continue to influence energy use. High energy costs and the slow-growth economy are motivating Canadian companies to become more energy efficient. Indeed, the Carbon Disclosure Project, which asks the country’s top 200 publicly traded companies to provide information on their emission reduction strategies, reported on 140 initiatives that generated annual savings this year — an increase of 32 per cent from the previous year. By serving their private interests, companies are also advancing the public good.
That’s been our experience at TD. Becoming the first North American-based carbon-neutral bank imposed a discipline on us to do more with less — in effect, boost our productivity. At the same time, we have reduced the amount of greenhouse gases we add to the Earth’s atmosphere.
Three strategies underpin our initiative: use less energy, use “greener” energy, and “offset” the remaining emissions with high quality carbon credits.
The second and third strategies proved to be catalysts for a number productivity gains. Simply put, the additional cost required to use greener energy or offset our emissions made the status quo too expensive. In turn the business case for achieving greater energy efficiency became more compelling.
This has led us to create “net zero” energy branches in both the U.S. and Canada that are designed to produce at least as much energy as they use. We have also implemented energy efficiency projects across our operations, including construction of a more energy-efficient data centre for our North American operations.
Overall, we have reduced our North American greenhouse gas emissions associated with energy usage by 4 per cent, even though we have increased our real estate footprint by 24 per cent. We are on target to reduce carbon by one tonne per employee by 2015 — a 28-per cent reduction from our 2008 baseline. This represents substantial cost savings.
Additionally, new revenue streams have been tapped — partly due to the expertise we have gained in reducing energy consumption and purchasing offsets.
For instance, renewable energy financing now stands at over $2 billion, and we have been able to introduce innovative small-scale renewables financing products in the retail market.
Ironically, back in 2008, our motivation to become carbon neutral was based in part on the assumption that widespread carbon pricing was imminent. Our timing was wrong, but we fortunately stuck with our conviction that the dynamic between energy and environment would eventually change the way our customers live, work and play.
Given the re-emerging interest in creating low-carbon economies, are we now in a better position to adapt to some form of carbon pricing? To be sure, we are far more familiar with both the principle and practice.
However, in Canada, policy clarity is still evolving. For example, the different provincial systems already in place can create conflicting obligations for companies.
This could impede investments in technologies critical to emission reduction, according to a paper recently produced by the Canadian Council of Chief Executives — a long-time proponent for consistent carbon pricing across the country. Echoing this position, more than 100 global corporations, including some of the world’s leading energy companies, have called on policy-makers to develop an “unambiguous global carbon price.” It’s also important to take into full account the economic impact any pricing system would have on any given region or industry, so not to place inappropriate burdens on them. Economic and environmental goals are not mutually exclusive. Indeed, they are integral to each other.
Yet Canadian businesses need not wait for any national plan. Nor are they. An overwhelming majority of respondents to the Climate Disclosure Project have integrated emission reduction initiatives into their business strategy. Companies can advance the public good while serving their private interests. This prolonged period of slow growth requires organizations to maximize savings to reinvest and grow. They must also find new revenue streams to offset the economic headwinds. Going carbon neutral has helped us achieve both goals through lower energy usage and operating costs, product innovation and fewer greenhouse gas emissions.