SOLNA, Sweden — A number of businesses over the years have pledged to do their part to address climate change by setting goals to reduce their greenhouse gas emissions.
The goals were sometimes based on revenue or unit of output, which companies argue allow them to compare performance while also allowing for business growth.
It also means, however, that a company's carbon footprint can keep growing.
Company X can grow its business by 10 percent in a year, and if it cuts its carbon intensity by 5 percent -- creating less carbon dioxide equivalent (CO2e) per dollar of revenue -- it can claim that as a win, even as its overall greenhouse gas emissions have gone up.
Climate scientists, however, warn that emissions must decline up to 80 percent by 2050 to avoid the worst impacts of climate change, leading some like Salvatore Gabola to call for moving past normalized emissions targets in favor of absolute reductions. At a recent event in Stockholm, Sweden, that brought together organizations working to limit their impact on climate change, Gabola, Coca-Cola's head of European public affairs, laid out his company's vision for a change in strategy.
"We believe we know how to grow our business, or how to grow an economy, while at the same time reducing the absolute amount of greenhouse gas emissions," Gabola said.
Gabola was one of several participants in a panel discussion examining what businesses and governments can do to tackle global warming and foster a transition to a low carbon economy as the world's nations negotiate a successor to the Kyoto Protocol. [Full disclosure: GreenBiz.com was a guest at the event and Tetra Pak, its sponsor, paid my expenses to attend.]
Sweden, the site of the panel discussion, offers a prime example of how absolute decoupling of economic growth from greenhouse gas emissions is possible. The country has cut its emissions by 9 percent below 1990 levels while growing the economy by 48 percent, said Anna Törner, section head of Sweden's Ministry of Enterprise, Energy and Communications. The country is also making a big push toward an "Eco Efficient Economy," where environmental problems are turned into business opportunities, creating first-mover advantages and reducing future costs.
"It's really about creating more wealth, while at the same time, you're using less natural resources, you're more energy efficient, and you have less negative impact on the environment," Törner said.
Coca-Cola has set a goal of reducing its absolute European emissions by 5 percent by 2015. "Is it enough?" Gabola asked. "In the long term it is not enough," but is in line with the Kyoto Protocol in terms of first stopping emissions growth before reducing the trajectory.
Companies must also look past their front doors, he argued.
"We need as companies to move beyond our direct emissions," he said, pointing out that the company's direct European emissions equal roughly 700,000 tons of CO2e annually, but its total carbon footprint rings in at about 7.8 million tons when factors such as refrigeration, transportation and packaging are included.
Just 11 percent of the company's carbon footprint comes from manufacturing, leading Coca-Cola to turn to its largest impact: refrigeration. The company made a commitment to use cooling equipment that was 40 to 50 percent more energy efficient by 2010, and also promised to phase out use of hydrofluorocarbons (HFCs) in its refrigeration, which are greenhouse gases 1,300 times more potent than carbon dioxide. The company has nearly 100,000 refrigerators in the marketplace now that run without HFCs, and by 2015, all new equipment will be HFC-free.
Since 2002, Tetra Pak has worked to decouple emissions growth and energy use from business expansion. The chart below shows how the company has managed to hold energy use steady while driving emissions lower at a time of increased packaging production.
Tetra Pak used the event in Sweden to announce a wide-scale rollout of cartons in the United Kingdom and Ireland made with paperboard certified by the Forest Stewardship Council. That move translates to more than 1.5 billion cartons that could bear the FSC label, or roughly three-quarters of cartons sold in the U.K. and Ireland over the next year, with plans of achieving 100 percent FSC certification for all cartons in the next five to six years, according to Nils Björkman, Tetra Pak's executive vice president of commercial operations.
Tetra Pak has set a goal of reducing its absolute emissions 10 percent below 2005 levels by 2010. Tetra Pak already achieved a 12 percent reduction this year while still growing its business.
It's imperative to show this positive type of business case to government officials as they debate a successor to the Kyoto Protocol and legislation in the U.S., according to Oliver Rapf of WWF International.
"The most important thing is to make clear to policymakers we cannot have a disconnect between science and policy," Rapf said. "And they must demonstrate there is a business case for climate action."
In addition to businesses, governments and NGOs, it is important to bring consumers onboard if the world is to achieve any meaningful emissions reductions, Gabola explained.
"Part of the equation to get to a low carbon economy is a change in lifestyle of consumers," Gabola said. "That does not need to be against business growth. It's all about changing the system, changing industry behavior, changing consumer behavior."
Gabola mused on whether the right means of altering consumer behavior rested with a cap-and-trade program or carbon labels, which are currently being deployed in the U.K. to tell shoppers the amount of emissions produced during the life of certain products.
Should it come to the point where consumers would choose Coke over Pepsi because of its environmental performance, Gabola said, "you would see us putting even more money into this, and the same thing with Pepsi."