The Issue Of Reducing Carbon Footprint Commerce Essay

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The issue of reducing carbon footprint has become more salient to the business community as most customers and shareholders are shunning organisations that do not report progress on their environmental sustainability. The Brundtland report of 1987 "Our Common Future" described sustainable development as "meeting the needs of the present without compromising the ability of future generations to meet their own needs" (Swallow, Furniss 2011).According to Swallow and furniss, many businesses have realized that engaging in sustainable business enhances efficiency, reduces costs, preserves the environments, offers opportunities and puts the business in a more competitive advantage position.

Investor confidence is boosted by assurances gained through steps the businesses take to address issues related to the environment. Thus company disclosure of measures being taken to reduce carbon footprints helps attract investors (Mandelbaum, 2008).Since businesses are at the centre of the environmental debate, having created the problem through the notion of wealthy creation, there is the realisation that they hold the solution to the problem (Welford, Gouldson , 1993).Leicester City Council has developed an environment and sustainability plan to become a low carbon city ( 2012). This calls for a holistic approach from the business sector in striking a balance between creating wealth for the current generation without compromising future generations ((Welford, Gouldson, 1993).

Business Sustainability and Ecological modernisation

For the past 15 years, sustainability has played a major part of business consideration. According to the Dow Jones Sustainability index, research has indicated that those organisations that are eco-efficient are also the most successful ones (El-Kafafi, Siham; Stephen 2010).The concept of sustainable development was coined to emphasize that it possible for businesses to engage in economic development while protecting the environment at the same time (Carter 2001).

Organizations have realized that giving priority to the environment does not thwart business opportunities but rather it helps create them. Thus shareholders and societal value can be increased while decreasing carbon footprint at the same time (El-Kafafi, Siham; Stephen 2010). Leicester City achieved second place in 2010 from 14th place in 2007 in Sustainable Cities Index. Sustainable Cities Index tracks progress on sustainable development on Britain's 20 largest cities ( 2012). Leicester City uses EMAS (Eco Management and Audit Schemes for managing and improving environmental performance. EMAS is a voluntary initiative aimed at improving the environmental performance of organisations. Established under the European Regulation 1836/93, EMAS recognises and rewards organisations that go beyond the legal minimum compliance and continuously improve on their environmental performance (Carter 2001).

According to Carter, EMAS helps organisations exploit market opportunities offered by producing validated environmental information(green claims) and enhances the use of ISO 14001.EMAS focuses on helping business use resources more sustainably, improve relations with regulators and also demonstrates responsible management of environmental risk (Carter 2001). Businesses have been forced to take environmental issues seriously due to competitive challenges, pressures coming from the regulators, shareholders and public opinion. Stakeholders have constantly demanded environmental improvements and proof by way of reports that they are being done. Thus green issues form part of the overall strategic formation process of organisations and environmental reports have been published to provide information for stakeholders (Azzone, G, et al, (1996).

While sustainable development implementation has had its North and South divide obstacles, there has emerged the notion of ecological modernisation which assumes that capitalism and the environment can operate in tandem by the reform rather than restructuring the market economy (Carter 2001). According to Carter, business can therefore profit by protecting the environment and by including ecological criteria in the production process, costs can be reduced through improved productive efficiency. Technological innovation also helps realise some savings by reducing waste and pollution. There has been an increase in markets demanding green technologies equipment that can curtail pollution. The rise of "green consumerism" has propelled to a certain level demand for goods that reduce environmental damage in the way they are produced and their after use impact (Carter 2001. Businesses and governments are therefore encouraged to work into partnership and take environmental issues seriously. While the businesses can employ environmental audits as techniques to curtail carbon footprints, the government should be seen to be taking an active role in providing incentives to businesses such as the polluter pays principle through the application of eco-taxes and tradeable permits which penalise those activities that damage the environment (Carter 2001).

Policy Relevance and Standards

Policy and regulation constitute powerful instruments used to develop low carbon products. The use of Environment Management Systems (EMS) which includes instruments such as the certified ISO 14001 and DEFRA guide lines has yielded many benefits to organizations which include risk management. The use of command and control methods on environmental policies and regulations has received wide ranging criticism thus policy makers have come up with policy alternatives such as voluntary action. Voluntary action encourages individuals and companies to go beyond the requirements of law or financial incentive in doing things that protect the environment (Carter 2001).According to Carter, voluntary action encourages individuals to change their life styles thus making a positive contribution to a sustainable society. Businesses can, other than always thinking of increasing their profits, engage the very source of their profits who are the consumers in voluntary activities such as green consumerism, recycling, ethical investment and conservation work (Carter 2001).

Employee engagement is enhanced through the use of internal communication programs and environmental savings are also realized (DEFRA. 2011). There is enhanced collaboration with key suppliers on environmental performance .Reduction of carbon footprint by Leicester businesses will help to create a conducive political and internal support atmosphere for actions. Businesses in Leicester will benefit from collective action and compliance with increasingly low carbon regulations ( 2012).

Climate change Act 2008 set out a target of reducing the greenhouse gas emissions by 34 percent by 2020 and at least 80 percent below 1990 levels by 2050.This comes with a trajectory five year carbon budgets. Businesses are therefore urged to comply with these regulations as this helps attract potential investors and can also help in profit generating ( 2012). DEFRA guidelines set 22 Key Performance Indicators (KPI) companies can select those indicators that are most relevant to their business. The most significant KPI for most companies is the greenhouse gas emission as the government expects businesses to challenge their impact on climate change (DEFRA 2011).

Opportunities for Business

Current and potential market opportunities demand that both inter- business and business to consumer operators develop lower carbon goods and services (Business action 2012).Businesses can seize opportunities as having eco- efficient motivation that is using the environment to improve the profitability of the business (Blair and Hitchcock 2001). According to Blair and Hitchcock, opportunities can be in the form of creation of new markets and developing new products, enhancing competitiveness and building consumer trust. Any business with an established, stronger CSR plan has the potential of attracting major corporate customers as this acts as a consumer/customer pull for low carbon products (

DETR (1998) cited in Blair and Hitchcock provides a framework for sustainable businesses practices that put more emphasis on services rather than production to meet customer needs while using fewer resources, promotion of sustainable communities through contribution to the needs of employees, local communities and stakeholders and application of effective environmental and social standards that meet international obligations. There has been an increase of late of consumer awareness and concern on issues of climate change hence the business community is expected to do more to reduce carbon emissions in their products and services.

The increasing growth of green technology coupled by expenditure on Research and Development has enhanced product innovation (Business action 2012).Environmental protection is also taken as an opportunity to enhance products and services market share by appealing to both buyers and suppliers as end-user customers (Hoffman 2001).Green market efforts such as increased recycled or recyclable material, reducing virgin material use, eliminating hazardous product constituents and decreasing the environmental impact of their products will enhance the company's public image and the marketability of its brand (Hoffman 2001).

Corporate Social Responsibility

Corporate Social Responsibility calls for businesses to integrate social and environmental concerns in the aspects of their business operations and in their communication with stakeholders on a voluntary basis. It is in their best long interest to adopt this behaviour voluntarily over and above legal requirements as they need to integrate the economic, social and environmental impact in their operations .It is therefore an integral part of how businesses are managed rather than an optional "add on " to businesses core activities (European Commission Directorate 2002).

The issue of sustainability can be viewed as having restrictions in the short term but the overall integration of business objectives and aims will provide long-term value creation opportunities (Hawkins 2006). Organisations have therefore become increasingly aware that responsible behaviour will lead to sustainable business success (European Commission Directorate 2002).

According to the European Commission, sustainable economic growth, better jobs and greater social cohesion can be achieved through a socially responsible management of change at company level. Reducing carbon footprints can be defined as finding new ways of optimizing operations. Eco- efficiency, waste- minimization and prevention of pollution are the central tenets (Hoffman 2001).According to Hoffman, costs of production can be lowered through minimizing the output of waste and the input of hazardous materials and also minimizing waste, emissions and discharges can reduce liability costs for a company from potential spills and health and safety exposures.

Green Consumers

Environmental groups.


The issue of reducing carbon footprints needs a holistic approach from all concerned. The benefits derived from sustainable use of resources need not be overemphasized. If a sustainable economy is to be achieved, it takes collaborated effort in creating sustainable businesses.