A new Management Consultancies Association (MCA) report , ‘‘A growing concern – how should business adapt to a low carbon world?’’ released today (31st January 2008) highlights the extent to which environmental concerns have changed dramatically within businesses in the last five years. Asked how important it was responding to climate change five years ago, almost two thirds (61 per cent) said that it wasn’t one of their top ten priorities. In stark contrast, today, 70 per cent said that it is, with over a third (36 per cent) stating it was amongst their top five most pressing concerns.
However, the survey for this report, carried out in conjunction with consultants Arup, demonstrates that there is clearly a long way to go for most businesses in reducing their carbon emissions. The report found that the majority (75 per cent) are only ‘scratching the surface’ in their attempts to reduce emissions, with only a quarter of businesses presently funding projects to reduce their emissions.
Other key findings from the report included:
61 per cent of organisations had carried out a review of energy usage, 67 per cent said they’d taken steps to reduce overall waste and 46 per cent claimed to have increased energy efficiency
However, 93 per cent stated that their organisation had not succeeded in cutting its carbon emissions by more than 10 per cent, with almost a quarter (22 per cent) saying that their initiatives were too new to have had an impact so far
Over a third (36 per cent) said they had more urgent business priorities, 14 per cent said that they lacked people with the expertise in understanding the issue and 13 per cent said the cost was its most serious barrier
Fiona Czerniawska, author of the report and Director of the MCA Think Tank commented: “Fundamentally, the cost of pollution is not yet high enough to focus the attention of senior managers; reducing carbon emissions is still just one of the many things jockeying for funds and commitment.”
Neil McLocklin Director at Corpra comments: “We just don’t appreciate how bad a polluter the UK is. We produce approximately 12 tonnes of carbon per person in this country, compared to the Kyoto target of about six. Even the Chinese are only at three tonnes per person. We, along with the US, which produces around 20 tonnes per person, are the bad guys here. And that makes substantial pay-as-you-burn taxes inevitable, and that’s when climate change will really hit the bottom line.”
The report also highlights that defining a carbon footprint is difficult and organisations also need to distinguish between what is ‘good’ and ‘bad’ carbon. David Singleton, Chairman, Global Infrastructure Business, Arup comments: “Supposing we sent a group of advisers out to China to help a power plant reduce its emissions. Flying those people out there is surely a better use of carbon than flying the same number of holiday-makers to an exotic beach, but at the moment we evaluate the carbon impact in the same way. But we’d need companies to work together – and some elegant thinking – to come up with a way of taking this into account.”
Natural Resources – The Future?
The report also found that whilst people believe reducing carbon emissions is something that can be achieved within our current way of doing business; they don’t see dealing with a scarcity of natural resources in the same light. The majority (94 per cent) of people said that they thought organisations need to prepare now for the impact that limited natural resources will have on the world economy in the future and 90 per cent said that this would significantly change the way we work.
The report says that government will therefore have a role to play, but it’s perhaps as an enabler more than a doer, as solving this problem will require far more fundamental changes at all levels in society. David Singleton, at Arup concludes: “There are two critical success factors. First, we need organisations able to identify practical solutions for reducing energy demand and shifting to zero or low-carbon technologies and economies with a long-term view; organisations whose governance and ownership structures are capable of taking a medium to long-term view, balancing today’s economic imperatives with the ability to make investments over decades if required. Secondly, business needs to show more leadership. Economics and environmental needs may be closer together than ever before, but we still need individuals and organisations who are prepared to say that we all have to adapt to living in a more fragile world. “
‘‘A growing concern – how should business adapt to a low carbon world?’’, a report sponsored by Arup is published by the MCA. To receive a free pdf copy either email david.poulton@mca.org.uk or contact David Poulton on 0207 321 3993.
Case Study – Fujitsu – Improving Energy Efficiency
“In the UK alone, our electricity bill is £10million a year”, points out Juliet Silvester, Head of Environmental Programmes in the UK, “so looking to reduce this made economic sense.”
Fujitsu’s first step was to look at the simple steps it could take to increase energy efficiency – monitoring usage more carefully, turning the air-conditioning down when everyone had gone home – something that has already saved the company £750,000 this year. “But this is the starting point,” says Silvester. “We’re now working with the Carbon Trust on its carbon management programme. We’ve carried out an initial scoping study and are now working on a more comprehensive survey to identify long-term initiatives. We want to be in a position where we understand our footprint, what’s included and what’s excluded. Our data-centre accounts for quite a large proportion of our fuel bill and if we grow, then our energy consumption will grow too. We also have a large number of people who travel a lot and this is something else we need to reduce; we have to help our employees understand the impact they have as individuals. Finally, we are looking at trying to buy our energy from cleaner sources: in the first instance: from British Energy because of their nuclear component, but we’re also looking to install a wind turbine at our new data centre which we hope will reduce our fuel bill by 10 per cent. The one thing we don’t want to do is offset. Offsetting makes it too easy for organisations to claim they’re carbon neutral, and to throw money at the problem without getting the actual problem fixed. It has allowed people to jump on the carbon reduction bandwagon but not do as much as they could to resolve the issue. No organisation can be genuinely carbon-neutral but we can all try to reduce our fuel consumption.”
“Legislation will lead companies to take more of these types of initiatives, but Fujitsu has been concerned about its environmental impact for a long time, largely because Japanese customers are more clued about this issue than they tend to be in Europe, but also because rising fuel bills affect our bottom line. We’re trying to run a sustainable business in every sense.”
About the Management Consultancies Association
The MCA was formed in 1956 to represent the consultancy industry to its clients, the media and government. Management consultancy is an increasingly important industry for the UK economy with management consultancy revenues for 2006 estimated at £7.7bn. MCA members represent around 70% of the UK consulting sector, employ 18,000 consultants and work with the FTSE100 and all government departments. Eight of the top ten UK-based consulting firms (by consulting fee income) are members.
The MCA supports its member firms with a range of services including events, publications, interest groups and public relations. The Association also works with its members to attract the top talent into the industry. The MCA provides advice on the selection and use of management consultants and is the main source of data on the UK market.
About the report sponsor – Arup
Arup is a global firm of designers, engineers and business consultants providing a diverse range of professional services to our clients around the world. Sustainability underpins our work and the firm is the creative force behind many of the world’s most innovative and sustainable buildings, transport and civil engineering projects.
Established in 1946, Arup has more than 9,000 employees, based in 92 offices in 37 countries, working on up to 10,000 projects at any one time. Our unique structure, with the firm held in trust on behalf of its employees, gives us complete independence. Our profit at 31 March 2007 was £48.5m GPB, before tax and profit share, while our turnover rose 21% on the previous year to reach £572.4m. Arup has been listed in the Sunday Times Top 100 Companies for the last six years, and we are currently ranked 37th. It is also ranked 19th in the Top UK Management Consultancies.
Arup’s multi-disciplinary approach means that any given project may involve people from any or all of the sectors or regions in which we operate. Our aim is to achieve excellence in all we do by bringing together the best professionals in the world to meet our clients’ needs. More information at www.arup.com
For more information please contact:
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