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Voluntary Climate Program

Hundreds of U.S. companies are joining voluntary climate change programs and interest in these programs is growing. Many participantsare taking moderate steps to reduce their greenhouse gas (GHG) emissions, while some are setting aggressive emissions-reduction goals and positioning themselves as leaders. Why do companies join these programs and take these actions?  
   
The main reasons companies cite for joining voluntary climate change programs include the desire to have a stronger voice in formulating climate change policies, gain public recognition for efforts to reduce emissions proactively, get a head start in developing cost-effective plans for responding to future GHG regulations, and take advantage of the networking and free technical assistance offered through some programs.  
   

Types of Voluntary Programs

 
Let’s say your company is thinking about joining a voluntary climate change program. After considering the general benefits, perhaps your CEO asks you to highlight the strengths and weaknesses of the various programs out there. Where do you begin?

Table 1 summarizes the main requirements and benefits of nine popular voluntary climate change programs (see “For More Information” for links to their web sites). Most of these programs focus on the U.S., but a few are global in scope or offer the flexibility to include global operations. In a nutshell, there are two types of programs:

GHG registries. These programs require emissions reporting but no reduction goals.
 

 

 
   
Goal-based programs. These include trade association programs that require only a general commitment to reduce emissions and other programs that require a company-specific reduction goal and emissions reporting to track progress toward achieving that goal. All voluntary programs offer some type of public relations benefits, but generally those with tougher requirements offer more credible recognition.  
   
GHG Registries  

Usually run by a state or federal agency, GHG registries track an organization’s progress in reducing emissions over time. Some registries are tied to GHG regulations—they help the government enforce its emissions-reduction requirements. Registries are also sometimes created without a GHG regulation on the horizon so that the program is entirely voluntary.

One of the main purposes of many GHG registries is to offer companies “transferable credits” for emissions reductions achieved prior to the enactment of a GHG regulation. Like other voluntary climate change programs, GHG registries are designed to provide some degree of public recognition for a company’s achievements. The registries have varying degrees of rigor in their rules for reporting emissions.

The Canadian GHG Challenge Registry is a voluntary program that gives large and small companies the opportunity to register their emissions-reducing progress so that they can communicate their achievements to shareholders and the public. In addition, eight Canadian provinces and 41 states have joined The Climate Registry, which was founded in 2007 based on the reporting principles of the California Climate Action Registry.

 
   
Goal-Based Programs  
Goal-based voluntary programs require companies to commit to reducing emissions in addition to just reporting total emissions. Some require a general commitment to reducing emissions as part of a sectorwide or trade association effort, and others mandate a company-specific reduction goal and tracking of progress toward the goal.
In return, these programs offer public recognition for achievements. Some also offer technical assistance or peer exchange opportunities. Table 1 includes seven of the most popular goal-based climate change programs for large companies in the U.S.

Businesses can reduce their GHG emissions and improve their bottom lines by putting more effort and resources into their energy-efficiency programs. Several large companies in the Climate Leaders program, including Caterpillar and Pfizer, have achieved aggressive emissions-reduction goals by focusing on energy efficiency alone. Other emissions-reduction options include installing cogeneration or on-site renewable electricity generation such as systems that use photovoltaics or biofuels (like landfill gas). Companies can also purchase green power, renewable energy certificates, and carbon offsets.
 
   
Making the Right Choice  
Choosing the best voluntary program for your company is a matter of aligning your company’s goals with the strengths of the various types of programs. Joining a GHG registry will enhance your company’s chances of gaining credits for emissions reductions you achieve before an eventual GHG regulation is enacted. Joining a goal-based program that requires a specific reduction goal may make some companies uncomfortable, but for others this can be a good way to maximize public relations benefits.

Regardless of what path you choose, we suggest joining a program with good, clear standards for measuring and reporting GHG emissions. These clear standards will enhance the credibility of your company’s achievements and the recognition received through program participation.
 
   
 © 2008 E Source Companies LLC. Click here for Printable Article  
 
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