When Cenovus was being set up as an integrated oil company in 2009, a variety of options were considered for where to house its environment and sustainability function, according to Jon Mitchell, Calgary-based team lead for environment strategy and policy.
It could have been placed in the legal function with a due diligence focus, in the communications function driven by stakeholders or as a stand-alone function.
Ultimately, none of those options were appealing to the 4,000-employee company, so it decided to pair the environment function with the strategic planning function of the organization.
“So all our long-range planning, all our capital allocation, all the fundamentals we do around our business are all done with an environment lens as well,” said Mitchell. “It’s a very different model than you see out there often.”
This unique approach helped Cenovus place eighth on the 2011 Canadian Carbon Disclosure Leadership Index by the Carbon Disclosure Project (CDP) and Accenture.
Seventy-five per cent of the 108 companies that participated in the survey have already integrated climate change into business strategies. At Cenovus, climate change is tackled in the same way as long-term business planning, said Mitchell.
“It just goes to show how important this is for businesses with a long-term view and who are preparing to maintain their competitiveness in what many people believe will be a low-carbon future,” said Zoe Tcholak-Antitch, director of CDP North America in New York.
Change in physical climate is one of the main risk factors driving companies to focus more on climate change, found the survey. With more hot days, they have to use more cooling, which puts pressure on energy bills, and the weather can affect their ability to create certain products, said Tcholak-Antitch.
“The list goes on and on — weather events do impact companies’ ability to operate and can sometimes impede employees’ ability to get to work, resulting in lost staff days and lost productivity that way,” she said.
But employers that integrate climate change into business strategies and focus on energy efficiencies can offset some of the costs.
“Just being more energy-efficient and sustainable is an immediate drop of earnings to the bottom line,” said Losel Tethong, Canadian sustainability practice lead at Accenture in Toronto.
“We believe many companies can save 15, 20, 25 per cent of their energy costs across facilities, fleet and transportation and other big energy areas — there’s an immediate drop.”
To further reduce costs, 54 per cent of companies are driving new revenue streams by providing products and services to help third parties reduce greenhouse gas emissions, up from 47 per cent in 2010 and 34 per cent in 2009, found the survey.
“If companies are able to offer a product that is lower carbon or more efficient than their competitors, with the growing interest in this area, that provides a competitive edge,” said Tcholak-Antitch. “So they’re not just competing on price points but these business opportunities are really key.”
Out of the 108 respondents, 91 reported a cumulative 425 emission-reduction activities that were either underway or completed, found the survey. Energy-efficiency initiatives in operations and building services were among the most popular activities, followed by transportation-related activities.
These initiatives are expected to deliver annual savings of about $27 million, found the survey.
Cenovus has many climate change-related initiatives in place, including a dedicated budget of $10 million per year for energy efficiency, a system to forecast its carbon emissions, a community program to encourage others to be more energy-conscious and an environmental opportunity fund where employees can pitch their ideas and suggestions for what the company should support, said Mitchell.
It also offers an employee rebate program where staff can receive up to $600 per year for energy-efficiency upgrades in their home.
Cenovus is moving to a new building that has sustainability ingrained into it — from the physical structure and lighting to common space and individual employee work stations — and employees are very excited about it, said Mitchell.
Change in regulation is another risk factor pushing employers to focus more on climate change, especially carbon emissions. While Canada doesn’t yet have one single, national policy on carbon, some provinces have their own measures in place. Alberta has a carbon levy that requires some large emitters to pay $15 per metric ton of carbon to the province.
British Columbia taxes carbon and other provinces are considering similar carbon regimes, said Tethong.
Mandatory reporting of emissions may be another type of regulation coming to Canada, said Tcholak-Antitch.
“For companies to report this, they need measurement systems in place, they need a tracking system, a system internally to capture all that data and monitor it and then report it and this requires skills and expertise and can cost companies money,” she said. “Companies already going down that path won’t have to play catch-up when certain regulations come in.”
In many organizations (85 per cent), senior managers or members of the board are responsible for climate change, found the survey.
“That really sets the framework for any company trying to address climate change from a strategic point of view; they need that responsibility at the top and they need that top-level support,” said Tcholak-Antitch.
Another trend expected to grow is incentives to staff to meet certain targets related to energy efficiency or climate change management, she said.
“People do what you pay them to do and if you’re incentivizing business unit managers or product line managers to be more energy-efficient, they probably will be.”
Employers are also implementing more climate-friendly initiatives because these build brand value, found the report. These initiatives enhance a company’s reputation and help it be perceived as responsible and trustworthy, said Tethong.
Building a positive brand has a big impact on recruiting new, young talent, he said.
“(It’s about) becoming employers of choice for a generation of employees that care deeply about the global environment, the local environment, climate and, very specifically, who care about whether their prospective employers’ impact and contributions are having a positive impact,” said Tethong.
Focusing on climate change has also had a positive impact on employee retention and morale, said Mitchell. Cenovus tries to weave its environmental initiatives into the culture of the organization by making it personal for employees, giving them avenues to identify improvements and offering them an outlet to “express an environmental ethic they may have,” he said.
“People want to be proud of the company they work for,” said Mitchell. “They want to know their companies are doing right by the environment and really have that as a focus of the business so they don’t have to feel like it’s something they sacrifice when they walk through that door.”
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