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COP15 — the 15th Conference of the Parties climate negotiations in Copenhagen this month — is the latest clarion call for business leadership in meeting the climate challenge.
The recent tempest over embarrassing emails from a few climate scientists has contributed to public confusion over the overwhelming scientific understanding of anthropogenic global climate change — confusion that has been well nurtured by the denial axis and their deep-pocket backers — and clarified by Scientific American, among many others. (This just in: the Associated Press conducted an “exhaustive review” of the stolen climate emails, which shows they “don’t undercut the vast body of evidence showing the world is warming because of man-made greenhouse gas emissions.”)
The real story for business leaders lies beyond the buzz, and demands careful attentions by executive leadership, boards of directors and and owners.
COP15 will produce a series of emissions reductions pledges from participating nations — which will be hammered out into regulations over the next 12 months to be ratified at next year’s meeting in Mexico City. But, that’s not the real story either. Not for anyone who has any smidgen of strategic vision.
The real story is that the business landscape — regulatory, competitive, and financial — is changing rapidly. And resistance is futile — both because the process of climate change now seems inexorable, and because the business opportunities it presents are so significant.
Consider:
* Current and upcoming state and federal regulations will offer real teeth to curbing carbon emission, and changing what your value chain produces–and how they produce it.
* Regulations and market realities will give real economic value to curbing carbon emissions
* The process of curbing those emissions (despite the rant about the cost) will be an innovation driver — for the wise. California is leading the way in the US, with AB32 kicking into gear in 2010 as cornerstone of the state’s efforts to reduce emissions 25% by 2020 and 80% by 2050. Emissions charges are expected to triple during the first few years — and then California’s cap and trade program is slated to launch in 2012, as other regional carbon markets open.
The US EPA has just declared its intention — and legal authority — to regulate carbon emissions, and will require annual carbon reporting from manufacturing facilities starting in 2011.
WalMart is considering (as UK retailer Tesco has been doing) asking for carbon footprint labels on every item on every shelf; and what WalMart “asks” for has a way of happening.
(Visit one possible scenario of the carbon regulation landscape over the next three years in this excellent blog post from Terry Tamminen (former Secretary of CalEPA) at our ally Pegasus Capital Advisors.)
All of these events should inform the one-, five- and ten-year plans of all companies, regardless of industry. If you keep your head in the sand, you’re risking your fiduciary duty to your shareholders (if you have them), your family (if you don’t) and your own integrity.
The only question is this: What does leadership in a carbon-conscious economy look like?
Ultimately, the coming carbon regulations give executives the same choices they’ve always had: resist, follow, or lead. This time, though, it’s for real — and the stakes are stratospherically high.
The good news: this changing business climate offers an opportunity for smart companies — like yours? — to deploy integrated, game-changing sustainability strategies that leapfrog regulations to drive exceptional environmental performance, profits, market share and brand value.
Climate change is just the tip of the iceberg — a doorway into a world of new possibilities.
To be continued — with more specifics on what to do, and how to do it. Meanwhile, feel free to follow my more frequent COP15 comments and links on Twitter.
(This post is adapted News from Natural Logic, the monthly newsletter of my sustainability strategies consulting company, Natural Logic. Thanks to Benjamin Privitt for contributing to that article and this post. Please join our mailing list and/or subscribe to this blog to stay up to date.