Environmental Engineering Reference
In-Depth Information
in Malta, saving emissions by displacing non-
renewable power to the country's electricity grid.
HSBC built on this skillset from solar paneling the
London headquarters to eventually become self-
sustaining (depending on the London sunshine).
New buildings for HSBC are being built sustain-
ably to conserve power and water, cutting the
utility costs for the bank. Finally, using its strong
presence in the UK, HSBC is financing two wind
farms in Scotland as part of its carbon finance
strategy, where it then has the option to offtake
the emissions reduction credits or the electricity
produced while at the same time supporting low
carbon growth in the country. In the absence of
political pressure, legislation, or overly lucrative
financial benefits, companies such as HSBC are
acting on sustainability, and voluntarily taking
carbon exposure to use it as a tool for learning,
developing efficiently, and investing sustainably.
As the sustainability practice expands, so will the
energy savings that come from more efficient
buildings, the returns from microfinance lend-
ing, and the revenues from emissions reducing
projects. The initiative is a win-win in supporting
the company's reputation and bottom line. Its
model is scalable, and indeed a solid example of
sustainability in practice.
of companies encompass the need for future clar-
ity in one distinct direction: that of likely global
regulatory outcomes.
As in the case of the SOx and NOx markets,
government intervention coupled with entrepre-
neurial approaches to environmental management
resulted in the commoditisation of SOx and NOx,
which companies could use to manage their risk.
Unarguably however, the speed and efficiency at
which the market was created and matured would
not have happened without the mandate from
government regulating the amount of sulphur and
nitrogen oxides that companies could emit. This
legislation was unwavering and permanent, and
indeed solved the problem of acid rain within a
decade.
Climate change legislation conversely has
been ridden with uncertainty, so despite the early
actions by some, many other enterprises are stuck
in legislative limbo, not knowing whether to adopt
costly carbon measures and hedge their future
risk to carbon mitigating legislation, or to wait
and see if strict new policies would occur in the
midterm, affecting their bottom line. This lack of
clarity has been truly damaging to the industry as
more companies are opting to wait than to act,
particularly in the US.
Existing markets are in place in the EU, as has
been discussed. The EU ETS, legislated through
2020, is a fixture that EU member states are un-
likely to dispel. Instead, the current legislative un-
certainty on the desk of the European Commission
is the choice to move from 20% to 30% reduction
targets for the EU by 2020. The Commission's view
is that it thinks carbon prices from 2012-2020 will
be too low with a 20% target (given recessionary
effects that have already lowered emissions 11%
in the EU ETS last year, and the ability to bank
carbon credits from 2008-2012 into later periods
for compliance), and this will discourage polluting
companies from making additional reductions.
The lack of emissions abatement in the EU at this
20% target is a major obstacle in the prescribed
FUTURE RESEARCH DIRECTIONS
Until now, this chapter has taken climate change
policy as a given, but seen that companies will
pre-empt behaviour changing legislation by
enacting internal measures to limit their emis-
sions, encourage corporate social responsibil-
ity, and include sustainability in their strategy.
These environmentally aware business models
are really structured from a bottom-up approach
to climate change legislation and represent the
most progressive companies. Those looking for
an early-mover advantage have reacted similarly,
incorporating carbon as a tool for risk management
