SAN RAFAEL, CA — While the scientific community largely agrees that developed countries must reduce their greenhouse gas emissions by up to 85 percent to avoid catastrophic climate change, there is much less consensus within the business community over how to get there.
Even though the number of companies that have set emissions reduction goals is growing, the types of targets being set are all over the map: absolute cuts or intensity goals normalized by unit of output, sales or square foot of office space.
The problem with all of these goals, according to Autodesk's Emma Stewart, is that none are rooted in climate science, leading to aimless shooting by companies that may not put them on track to make the depth of emissions cuts scientists recommend.
That led Stewart and the Autodesk team to devise a new way of setting goals to reduce its carbon footprint. It's called the Corporate Finance Approach to Climate-Stabilizing Targets, or C-FACT, and the company hopes other businesses will adopt it and even help Autodesk make it better.
"It's intended as a call to action for companies to revisit the methodologies they're using, and for those who haven't set goals to borrow from this or possibly leapfrog us," Stewart, the senior program lead for Autodesk's sustainability initiative, told ClimateBiz.com this week.
It is reminiscent of BT's Climate Stabilization Intensity (CSI) Target model, which attempts to link financial and environmental performance to needed emissions reductions, but Autodesk claims their methodology goes a step further by making the metric universally acceptable by any accounting system.
C-FACT, which Autodesk's CEO has committed to use through at least 2020, allows companies to set climate goals that are proportional to what is contributed to the economy, based on its gross profit relative to Gross National Product. This accommodates for natural business growth, which can completely throw off a company's absolute emissions reduction target, Stewart explained.
"(Absolute emissions reduction targets) would be immediately moot if we made acquisitions or divestitures," Stewart said.
Here's how it works: Using their baseline emissions and gross profit, companies can determine their carbon intensity ratio, which they can then use to forecast their contribution to GDP. From here, companies can determine how many emissions they will need to reduce to stay in line with scientific recommendations of lowering emissions 85 percent below current levels.
Autodesk must recalculate a new absolute reduction target every year based on how it performed the previous year. If the company significantly over- or undershoots its target, it has a five-year window to get back on track.
The exercise showed Autodesk it needs to reduce its emissions 4.52 percent between fiscal 2009 and 2010. The company's total emissions, however, grew 1 percent between 2008 and 2009.
"This year, we have taken a number of steps that will dramatically reduce greenhouse gas emissions," Stewart said.
That includes heavily investing in virtual collaboration tools, which has helped the company so far exceed a goal of reducing travel by 20 percent. Autodesk is also trying to push virtualization in its data centers and enhance data tracking capabilities.
"We don't own our data centers," Stewart said, "so we have to use our influence as much as possible."