Regardless of one's stance on climate change, it makes economic sense for businesses and consumers to take climate-related action, says Ross Professor Andy Hoffman in his new book Climate Change: What's Your Business Strategy?
ANN ARBOR, Mich.—If you're a CEO, Hoffman and co-author John Woody think your position on the science of climate change is irrelevant, but they implore you to recognize its importance as a business issue.
"Know your carbon exposure, take action to reduce your carbon footprint, and influence the policy-development process," urge the authors. "Doing nothing means missing myriad near-term financial opportunities and setting yourself up for long-term political, operation, and financial challenges."
Hoffman is the Holcim (U.S.) Professor of Sustainable Enterprise at the Erb Institute for Global Sustainable Enterprise, as well as a professor of management and organizations at the Ross School of Business.
In his book, he and co-author Woody identify several low-cost ways for a company to achieve its climate change targets, including installing motion sensors and compact fluorescent light bulbs, or simply turning down heating and air-conditioning in company offices.
One company, The Beer Store (owned by Labatt, Molson, and Sleeman) cut $17,000 a year in fuel costs and 114 tons in carbon dioxide emissions just by changing the behavior of its delivery truck drivers.
The key to incorporating climate change strategy according to the authors is to be one step ahead of the competition, rather than two or three, to avoid completely surpassing the rest of the business community. They recommended companies think of climate strategy on a series of graduated steps, with some actions that are required now while others will become important later.
Above all, the authors say, remember that if you're not at the table, you're on the menu.
"Know what's on the table in terms of how to count emissions, getting credit for early action, cost control, and regulation," say Hoffman and Woody. "But also know where the table is, since standards are being set all over the world. Whichever standard becomes the gold standard will tell you at which table to sit."
The authors advise CEOs to take a pro-active stance when integrating climate change policies into their business strategy to avoid letting competitors make the rules.
"How will you play the game?" ask the authors. "You can sit on the sidelines or you can get into the game and let your interests be known."
Hoffman and Woody's book is the latest in the "Memo to the CEO" series from Harvard Business School Press. The work builds on Hoffman's experience in the areas of corporate responsibility and climate change, as well as his research at the Ross School's Erb Institute.
"The book is more of a policy memo," says Hoffman. "The publisher did want a data dump on the CEO, particularly the CEO of a smaller company, who typically doesn't have the resources to devote the people and time, or the luxury of making mistakes."
Many of the book's arguments build on the ideas Hoffman first outlined in 2006 in Getting Ahead of the Curve: Corporate Strategies that Address Climate Change, published by the Pew Center on Global Climate Change.
Written by Leah Sipher-Mann
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