Firms are responding to governmental regulations to reduce their carbon footprint. In the United States, the Waxman-Markey climate bill is expected to reduce GHG emissions by 17 percent from 2005 levels by 2020. The bill will also establish a cap and trade system in which companies will be required to have "pollution permits" to emit carbon dioxide. In 2012 the government would give away 85 percent of these permits and auction off the rest.
Best in class companies are not merely responding to these regulations but are developing a long-lasting, broader, multi-pronged corporate sustainability initiative. For these companies the move to include environmental considerations is not new. For example:
(i) "Global citizenship" has been a key part of HP's value structure since it was founded in 1939. Since 1957, HP has identified it as the most important of its seven core values.
(ii) In 1972 Volvo communicated the environmental challenges facing the automobile industry in front of the United Nations Environmental Conference. In early seventies Volvo included the aspect of environmental care into its corporate mission statement.
(iii) Since 1993 Nike has incorporated environmental stewardship into its long-term business objectives. Nike's stated goal is to, "create performance innovation products that minimize environmental impact by reducing waste throughout the design and development process, use environmentally preferred materials, and eliminate toxins." Nike has set a target date of 2011 to have 100 percent of its footwear achieve design and waste-reduction goals. Apparel and equipment are scheduled to reach similar targets by 2015 and 2020, respectively. By achieving this, Nike will be able to reduce 17% of waste inherent in Nike's supply chain and will increase the use of environmentally preferred materials by 20 percent.
(iv) 3M made the decision to adopt the sustainability vision almost 30 years ago. Since embarking on this path, the company has been able to prevent the generation of more than 2.2 billion pounds of pollutants and at the same time has been able to achieve about $1 billion in first year savings from environmental projects.
(v) M&M Mars uses low-cost methane gas generated by the landfill to help power the plant and reduce its electricity usage from 30 million kilowatts to 20 million kilowatts in five years. This has also resulted in reducing carbon emissions by 10,000 tons annually. The move has decreased M&M Mars's reliance on local utility, stabilized its annual budget, and cut costs by $600,000 annually.
Source: Glover, T. 2009. Beyond carbon counting. CSCM's Supply Chain Quarterly, Quarter 3, 30-36.