Do You Smell Smoke?
There’s lots of worthwhile reading in the July/August issue of AFP Exchange. Of particular interest in this issue is an examination of how corporate executives and financial professionals are adapting as their companies develop and implement climate mitigation strategies.
All in all, the take-home message from the magazine is clear: it’s time for everyone who’s involved with what we broadly call “the business world” to start paying attention to climate change and carbon management. In the article about carbon emissions trading, Josh Margolis, co-CEO of CantorCO2e, a subsidiary of Cantor Fitzgerald, uses a great analogy to drive home the point:
“If you’re not paying attention to climate change, that’s akin to not thinking about fire insurance until you smell smoke,” Margolis says. “Well, there’s smoke in the air now. The alarm is ringing. Your shareholders, customers, regulators and insurers are demanding to see your climate mitigation strategy. Taking the battery out of the smoke detector and adopting a ‘wait and see strategy’ is nothing short of reckless.”
That’s the kind of straight talk that I think we need to start hearing more frequently. Why? Because, let’s face it, this issue is not one that’s going to just go away. Legislation dealing with climate change is gaining prominence at both state and Federal levels, and both Senator Obama and Senator McCain are backing some type of cap-and-trade system to reduce GHG emissions. In short, it doesn’t look like we’re going to be turning back from where we stand now. In keeping with the Margolis analogy, think of it this way: many of us are smelling smoke. We’re heeding the alarm, and we’re ready to push forward.
Is your firm ready to start developing its climate mitigation strategy? If so, I’d like to suggest that you keep one fundamental point in mind: a whopping 90% of a company’s carbon footprint is embedded in its supply chain. That’s right, 90% of your carbon emissions come from your supply chain. What a great place to direct your efforts to mitigate and minimize your impact. My article in AFP Exchange (starting on page 28) will help get you started. Then, stay tuned. In August, I’ll be blogging in more detail about how to engage your supplier base and manage carbon-related data in your supply chain.
