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Friday, August 29, 2008

BT's Carbon Stabalization Intensity Target

Large corporations can produce long lists of great environmental initiatives and large claims of reduced emissions. Smaller companies have shorter such lists and fewer reduced emissions, but maybe their efforts are proportionately greater – how does one really know?

What really counts is how much a company contributes towards solving the problem. And the test? What would the outcome be if every company did likewise?

In the climate change space, the desired outcome is climate stabilization. From the 2007 Bali Climate Declaration by Scientists, there is pretty good consensus over the maximum allowable level of carbon in the atmosphere and the 50% reduction in absolute emission levels that needs to be achieved to get there.

It is fairly straightforward to calculate what that looks like in relation to anticipated GDP growth. An 80% reduction in global emissions per unit of GDP by 2050 is required - slightly higher for developed countries, slightly lower for developing countries. So, if we can work out our contribution to GDP, corporations should be in a position to work out what it really means to do their part.

BT has started down this path with our recently announced CSI – Carbon Stabilization Intensity target. The intensity is calculated in relation to our "value-added" as a company. Value-added is a measure of a corporation’s contribution to GDP – a published figure in the UK. Consistent with the reduction required from developed countries, our objective is to reduce emissions per unit of value-added by 80% by 2020. If everyone does the same, we should be well on-track for the reductions required.

This changes the paradigm for sustainability from one in which we judge a company’s actions by how long their list of actions or how sizable their emissions avoided, to one in which action can be planned and assessed within the context of solving the larger problem.

Postscript: August 2009 - A report from the CDC The Carbon Chasm highlights that for the most part even leading companies are not doing enough to avert catastrophic climate change.

Postscript: November 2009 - Autodesk has announced a target using a very similar approach called C-FACT - Corporate Finance Approach to Climate-stabilizing Targets. Read a guest post from Autodesk's Emma Stewart on their new target.

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