Getting Ahead of the Curve: Corporate Strategies that Address Climate Chante

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Cover_corpstrategiesIn a new report prepared for the Pew Center on Global Climate Change, Andrew Hoffman, associate director of U-M’s Erb Institute for Global Sustainable Enterprise, says that companies with a history of climate-related activity are trying to shift their strategies from a focus on risk management and bottom-line protection to an emphasis on business opportunities and top-line enhancements.

Hoffman’s report, "Getting Ahead of the Curve: Corporate Strategies that Address Climate Change," lays out a step-by-step approach for companies to reshape their core business strategies in order to succeed in a future marketplace where greenhouse gases are regulated and carbon-efficiency is in demand.  The research shows a growing consensus among corporate leaders that taking action on climate change is a sensible business decision.  Many of the companies highlighted in the report are shifting their focus from managing the financial risks of climate change to exploiting new business opportunities for energy efficient and low-carbon products and services.

Relying on six highly detailed, on-site case studies, as well as results from a 100-question survey completed by 31 companies, the report offers a unique and in-depth look at the development and implementation of corporate strategies that address climate change.  The featured case studies include Alcoa, Cinergy (now Duke Energy), DuPont, Shell, Swiss Re, and Whirlpool Corporation.

One of the clearest conclusions is that businesses need to engage actively with government in the development of climate policy.  Of 31 major corporations polled by the report author, nearly all companies believe that federal greenhouse gas standards are imminent, and 84 percent of these companies believe regulations will take effect before 2015.  The report offers policy makers insight into how companies are moving forward on climate change and how they can most effectively engage in the policy discussion.

“If you look at what is happening today at the state level and in the Congress, a proactive approach in the policy arena clearly makes sound business sense” said the



’s Eileen Claussen. “In the corporate world, inaction is no longer an option.”

Lessons learned at each step of the strategy development process are presented and four overarching themes emerge:

  • Strategic timing – For some there is a danger of starting too early; others highlight the risks of starting too late.
  • Establishing an appropriate level of commitment – For many companies, uncertain demands from government, the marketplace, and the financial communitycoupled with limited hard data and models to guide aggressive action–make it challenging to support extensive expenditures on GHG reductions.
  • Influence policy development – Any policy that regulates GHG emissions will certainly constitute a major market shift. Early action is seen as a way for companies to gain credibility and leverage participation in the process of policy.
  • Creating business opportunities – positioning to capture emerging opportunities and gain competitive advantage

The research draws from the experience of companies in the



’s Business Environmental Leadership Council (BELC).  The BELC, with 42 companies representing over 3 million employees and a combined market value of more than $2.4 trillion, is the largest US-based association of corporations actively pursuing solutions to climate change.  Wal-Mart and Goldman Sachs also gave input.

Via: (Pew Center on Global Climate Change; Erb Institute for Global Sustainable Enterprise)

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