Value Propositions for Corporate GHG Management Programs

Businesses create a GHG strategy by gauging tangible returns and intangible benefits. Anticipated outcomes, or value propositions, are the indicators of a successful GHG program.

Tangible Returns

• Climate-friendly projects yield a positive return on investment.
• New or enhanced products or services increase revenue, capture market share, and/or deliver net income.
• Internal emissions-reduction projects allow for the sale of emissions reduction credits.
• Enhanced energy-conservation practices and fuel switching stabilize corporate energy use and protect against energy price volatility.

Intangible Benefits

• Competitive positioning
  • Low-carbon products or services improve the company's position vis-a-vis its competitors.
  • The public perceives the corporate brand as environmentally friendly, leading to improved public relations.
  • Strong environmental performance results in higher employee recruitment, retention, and productivity.
• Shareholder-related benefits
  • Shareholders drop climate resolutions as their conditions are satisfied.
  • Investors perceive strong environmental performance as an indicator of superior business management, resulting in a premium on the stock price and a lower cost for capital.
  • The company's stock is included in a specialized stock index, such as the Dow Jones Sustainability Index, and is held by investment funds that track the index.
  • The company receives higher stock ratings from "socially responsible investment" (SRI) analysts, resulting in more stock purchases by SRI investors.
• Regulatory preparedness
  • Company staff are trained to manage GHG emissions, thereby broadening the company's experience and enabling it to adapt more easily to future regulations.
  • The company's GHG emissions are at or below legal requirements at the time the GHG regulations go into effect, thereby making compliance easier.
  • A strong GHG management program gives the company greater credibility and thus a greater voice in policy discussions and an opportunity to influence policy outcomes.
• Management benefits
  • Coordination of GHG management across business units and jurisdictions improves learning, identifies opportunities, leads to innovation, and offers unexpected efficiencies.
  • The company is protected against potential class-action lawsuits related to corporate governance, specifically claiming breach of fiduciary responsibility for failing to manage GHG emissions and their associated liabilities.