UK executives all at sea over climate change


With more than eight out of 10 UK captains of industry agreeing that climate change is fast becoming a significant business issue, you'd have thought they would doing something about it. Think again.

In fact, while three quarters of senior UK business executives believe climate change will grow in importance as a business issues over the coming years and decades, a whopping 82 per cent admit they still have no strategy in place on it at all.

The poll of 200 senior executives carried out for accountancy firm KPMG found that many business leaders were struggling with the issue and how their firms should respond.

Climate change hadn't made it on to the boardroom agenda of a third of those organisations questioned.

More than a fifth also stated that it was unlikely to become something that was discussed at board level in the near future.

Remarkably, the complexity and enormity of the issue may even be leading executives to bury their heads in the sand.

Despite ever more urgent warning from scientists, a comparison with a similar study carried out in May 2007 found the number of executives who felt climate change was a significant issue had in fact fallen, albeit only to 84 per cent from 85 per cent.

What is also clear, according to a separate survey by PricewaterhouseCoopers, is that it is economic concerns rather than hand-wringing about the environment that will be the key to driving change.

In a survey of executives of technology firms it found six out of 10 arguing that energy savings were now one of the most important factors in their company's environmental decision-making process.

And four out of 10 claimed the green movement created significant market opportunities for their companies, including a noticeable increase in customer demand for green products and services.

On a more positive note, too, the KPMG survey found that four out of 10 of those polled claimed to have a good understanding of the impact of climate change on their organisation.

A further 17 per cent got extra brownie points for knowing their organisations' carbon footprint and for having a clear strategy in place.

Yet fewer than a tenth of those questioned knew that the UK had committed itself to a 60 per cent cut in greenhouse gas emissions by 2050.

According to latest government figures, carbon emissions fell just 0.1 per cent in 2006, highlighting the size of the challenge facing consumers and businesses alike, said KPMG.

The results also revealed that an increasing number of UK executives did not think the government was doing enough to educate business on how to tackle climate change.

In the past six months the number of people sharing this view jumped from 42 per cent to 58 per cent.

Richard Sharman, partner and head of KPMG's Carbon Advisory Group, said: "Business is looking for improved communication and a clear regulatory framework from the government to provide certainty so that they know where to focus their emission saving efforts.

"Any significant investment in new carbon efficient business practices or energy saving technology is unlikely to go ahead until they fully understand the impact of regulation," he added.

"Our survey shows that the majority of business leaders still don't treat climate change as an economic issue that can have a positive or negative impact on the bottom line," Sharman continued.

"Even by taking some very simple steps now and gathering basic energy and emissions data, a business is less likely to be caught out by legislation when it does come and they could be cutting wastage and energy bills in the meantime," he added.

Nearly three quarters of the executives polled agreed that education and increasing awareness among businesses was one of the most important tools for tackling climate change.

"Anyone who asked an executive about last quarter's turnover or profit would expect a quick and accurate response," pointed out Sharman.

"Knowing your carbon number is rapidly becoming a key performance indicator that employees, regulators and shareholders demand accuracy and assurances on", he added.

"Failure to provide this information will not be an option but it isn't something that can be collated overnight, it requires accurate data over a period of time," he continued.

Executives pointed to getting buy-in from employees as being one of the biggest hurdles when implementing carbon reduction strategies, closely followed by influencing partners and suppliers to adopt more carbon efficient practices.

Nevertheless, nearly eight out of 10 said they were now recycling or using recycled products and more than two thirds were using energy efficient appliances.

More than half said they were educating their employees about environmentally friendly business practices, while nearly a third were reviewing and updating their existing business models.

More than a fifth were working to achieve carbon neutral status, with a similar number donating to organisations/charities that are combating climate change.

The PwC poll also identified a significant shift by consumers towards green products, services and business operations.

"One in five executives claim their companies practise environmentally preferred purchasing, where organisations select products and services that have a lesser impact on the environment than competitive products and services," said Barry Murphy, technology tax partner at PricewaterhouseCoopers LLP.

"What is encouraging though is that within the next two years, this figure will rise to over half of all executives," he added.