Deriving a competitive advantage from Environmental Strategies
The reports indicate that clean technology market is likely to rise from $186 billion to $555 billion in 2010 to 2020. The main areas of business growth are renewable energy resources and GHG reduction related programmes. Further claims establish that carbon reduction related projects are among the fastest-growing business in green engineering field particularly Energy Financial Services. The emphasis is on the huge cost saving opportunities when going green added by the fact that customers’ world wide decision is demanding green products.
The past products have been engulfed in the difficulties due to toxic chemicals in facto...
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...ries, oil spills, carbon poisoning and excess automobile pollution. As a result, there has been call for the product redesign with green focus to enable the organizations attains the competitive advantage and huge savings by manufacturing designs that adhere to sustainable green rules. In this regard, this paper shall examine how to develop and implement environmental strategy to gain competitive advantage. Introduction
Companies today are making a fast move towards implementing a climate changes strategy as their incorporation of their business model as sustainability make such business entities increase the bottom kind and efficient there’s revelation that over 400 companies in UK have set their target on green-gas reduction and as result have gained good profits this successful examples indicate that there are tremendous amount of value organizations can gain advantage if by implementing climate change or/and sustainability to the business.
However, the challenges remain on the organizations that usually after recognizing this critical aspect, it either leave the value on table or embrace a wrong model towards achieving it. It is a point of worth to acknowledge that, there are various challenges that face issue of sustainability in consultancy business because most firms don’t set up a complete and full strategy or do not have dedicated teams.
Therefore without setting or coming up with full or complete firm wide strategy, the organization opens up for future risks and also miss out the value of generation. Hence, to address this issue of value proposition an effective model is necessary. Carbon Reduction A strong effective and efficient Green engineering model is necessary to generate potential carbon credits such as VERs [Voluntary Emission Reduction] RECS [Renewable Energy Credits and white tags credits [Energy affiance creditors] by enhancing or reducing GHG [Green house gases].
Despite increased recognition of the importance of a strong Green engineering model, most practitioners still have difficulty in designing a strong plan that take into account the environmental strategies without leaving out potential revenue streams this difficult that poses a daunting challenge to environmental consultancy organization is because the drivers needed to tackle climate change are multifold such as energy reduction, consumer behavior, early actions in terms of carbon reduction and future regulation and policies and brand image, therefore, use of traditional model or approach of wait and see will damage the organizations who are leaders in environmental consultancy, instead this paper proposes an effective model that links business component with the environmental issues regarding green business model. Strategy Formulation
Climate change strategies if well devised can create the organization opportunities increase by up to 80%, while at the same time if the organization is poorly positional, it can threaten up to 65%, therefore, the challenge lies in those organizations that conceptualize this potential value gear towards creating a comprehensive carbon strategy that take into account all potential benefits while reducing projected risks, this challenge is difficult to overcome by most practitioners drew to lack of a clear understanding of credit market and the needed inputs to generate those credits, which is brought about by most organizations having Engineers on broad who do not either understand or care about commercialization processes that are responsible to generate credits.
Moreover, the marketing with leadership from organizations corporate social responsibility side may not be in a position to understand the science and processes risking the company of “green washing” [exaggerations or false claims on environmental issues to improve organization brand image]. As a consequence, the best way to create design implements comprehensive environmental strategies that enables best value generation for the organization is by involving C-level organization executives who are able to incorporate Successful Environmental strategy can be enhanced when it encompasses three main value generators that can lead to organization gaining competitive advantage, these three main value generators are; Credit generation, brand value and cost reduction.
Brand value for the organization is created by effective communication to the public about the project the organization undertaking that in sense aim at improving the economical, environmental and social impact. In order to attain this, the appropriate tool of design that the organization can use is corporate social responsibility [CSR] reporting. Cost reduction results from the organization project to reduce G. H. G [greenhouse gases]. The project that can be used in this context can be related to waste reduction, feel and energy. According to Crouch (1995) he suggests that viable projects that any given organization can embark on to reduce green house gases to reduce costs can be HVAC retrofits or lighting, feel alternatives, recycling programs, energy management and renewable energy.
Credits are gained by organization when in implements projects that are new that their desired outcomes changes “business-as-usual scenario of the organization as opposed to basic carbon footprint, therefore, the trick lies with the organization to renew credit yearly in such area as energy efficiency, commission reduction and renewable energy. Strategy Development Strategy development comes before overall carbon strategy is developed, whereby an organization assumes various steps to determine its position as environment steward, the most appropriate tool of design to use in order to determine organization position is the bench marking reports.
This is an initial step aiding towards strategy development is normally referred to as carbon footprint. Carbon footprint is regarded as abase line measurement of company’s impact on climate change or the impact that the organization has on green house inventory. Thereafter, the company can move on towards strategy development and implementation. The steps followed in developing and implementing the carbon strategy involves a number of steps for an organization. Phase1. Baseline creating First, there is need top create a baseline to act as a foundation on which the organization can further come up with extra carbon reduction project that can measure up to third party verification.
The third part verification refers to quality assurance conducted by an independent auditor geared towards checking the validity of the carbon footprint data. Baseline process important because it enables the organization to generate credits once the organization want to publicly report their reduction. In addition to that, baseline creation will save the organization the media scrutiny and save loss of their consumers’ confidence as a result of green washing accusations. According to Jonathan (2003), comments that organizations which in near future or even now fall under climate change legislation, and fail to create a baseline early enough they are likely to experience difficulties in realizing reduction targets.
As a consequence, he adds, such organizations may need to purchase some additional credits to make up the difference which may lead to increased cost. However, historical data collection to aid in creating a baseline for carbon strategy is at many a time inaccurate, difficulty and faces various challenges going through third part verification. To minimize these limitations, organizations can capitalize on increasing their brand value through reporting their emissions publicly in either Climate Registry or Carbon Registry though transparency and credibility is paramount. Phase2. Reducing greenhouse gases Reducing greenhouse gases is the immediate step after completing and verifying carbon footprint.
Whereby the organization identifies their major emission sources and locates the areas with greatest emission reduction potential. The most reduction target areas that organizations go for at first in this regard are fuel consumption and energy. According to xx, cautions that the fatal mistake that an organization can ever make is to implement carbon reduction project without an effective strategy. An effective carbon reduction strategy handles greenhouse gases reduction while taking care of credits and meeting additionality. Additionality in regard to climate change space implies GHG emission reduction executed beyond and above business-as-usual. Central to successful GHG reduction in developing a carbon strategy is the financial plan.
Therefore, any emission reduction project whether changes light bulbs, uses methane for energy or implements a recycling program by any organization, it should indicate how greenhouse gases will be reduced and at the same time outline the financial plan. When this integration is achieved, then such an organization shall not only excel for any future credits, but also meet additionality to get credits certified. It is point of worth to mention that, any organization can not be able to generate credits in case it is or/and will be affected by a mandated emission reduction, unless the organization is able to reduce in excess of that target or mandate.
Moreover, an organization can not go backwards to gain carbon credit from the ongoing reduction projects or gain credit for these ongoing projects in future. Therefore, to gain the competitive advantage in greenhouse gases reduction projects the organization need to adopt effective reduction guideline. The concept of GHG and carbon credits are calculated in metric tones of carbon dioxide an equivalent of Mt CO2e. For instance, 1 Mt CO2e is equivalent to carbon credit or 1 voluntary emission reduction. There are six greenhouse identified according to the UN (United Nations) agreement international Kyoto Protocol. These gases are: SF6 (Sulfur Hexafluoride), CO2 (Carbon Dioxide, N2O (Nitrous Oxide), PFC (Perfluorocompounds), CH4 (Methane) and HFC (Hydrofluorocarbons).
GWP (global warming potential) is a useful tool of design that is used as a comparison index to compare concentrations from various GHG concentrations. For example, GWP for Methane is 21 which are 21 times more potent than CO2e, therefore 1 metric ton of Methane equals to 21 metric tonnes of CO2e; this translates to 21 Carbon Credits. The carbon credits are valuable commodities of the organization made by reducing of CO2e. Importantly, is that the credits are generated by meeting additionality and at the same time reducing CO2e. The generation of carbon credit is usually in terms of annuity. After, emission is reduced beyond and above business-as-usual it shall have changed the business-as-usual in comparison with baseline which is realized annually.
For instance, if an organization emits 100 MT CO2e yearly equivalents to the baseline carbon footprint, when the organizations uses fluorescent in replacement of its usual incandescent light bulbs, it reduces its carbon footprint by around 10 MT CO2e. As a result, the company will be emitting 90 MT CO2e yearly and thus the organization generates 10 carbon credits annually. But, the carbon credit generated by an organization should be verified by a third independent party. The organization that successfully generates attains advantage in the over-the-counter (OTC) market. This is opposed to the false belief that there is no market for organizations’ credits in Europe.
Assuring the situation, Jonathan (2003) note in the year 2007 in UK alone, the volume in OTC market was more than 42 million tonnes of carbon credits this combined with 23 million tones transacted at CCX, this constituted a total 65 million tones traded in the voluntary carbon market in the 2007. Therefore, this implies that the carbon credit market does exist and there are high and promising indicators that it shall grow. Phase 3: Communication After the first initial phases, the organization need to develop a Corporate Social Responsibility (CSR) report that incorporate economic, environmental value and social and. In this way the Corporate Social Responsibility becomes great tool to communicate an organisation’s actions to the public, but should not be the main focus in relation to climate change (Crouch 1995). Quality CSR takes into account: carbon credit creation, greenhouse gas calculation protocols, and reduction measurements.
If the organization prepares inappropriate CSR report and releases to the public, then it may backfire and cause devastating impacts. Conclusion The paper has discussed in detail how to come up design and implement environmental change strategy for a consultancy company. It points that the best level to come up with the best carbon strategy is to incorporate it into the business model by a C-level managers in need to generate as much value as possible. The steps include, developing a verified and comprehensive baseline and thereafter the greenhouse gas emissions reduction project can be communicated to all stakeholders through the use of CSR reporting or use of Climate Registry.
By doing this, the consultancy firm can reaffirm confidence in its client in its ability to develop carbon reduction footprints and develop a viable strategy, thus gaining a competitive advantage.
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