Businesses “Come to Grips” with Carbon Management: Interview with Kyle Tanger

ComingToGrips.gif Sustainability consulting firm Natural Logic has announced they will present a four-part webinar series titled, Coming to Grips with Carbon: How to Measure and Reduce Your Footprint.
The online events will be held on October 18 and 25th, and November 1st and 8th. The series will provide business leaders with practical guidance from leading practitioners on the key issues related to carbon management, including: measuring carbon footprint, reducing emissions, and making sense of emerging opportunities for carbon trading and offsets. Advance registration is required. [Disclaimer: I am helping to produce the series for Natural Logic].

Kyle Tanger, president of Clear Carbon Consulting will present at the October 25th session. I talked with Kyle about his fast-growing consulting practice (he is working with WalMart and other large companies) and asked him what he believes is driving businesses to embrace carbon reduction. “Companies inevitably find projects that have very attractive pay-back periods in financial terms,” Kyle said. “I can’t think of one client that hasn’t recognized that.” More inside…

Triple Pundit: What is your background? How did you begin working on climate change issues?

Kyle Tanger: I studied abroad at the University of Oslo in Norway while I was an undergraduate. The program there was focused on sustainability and energy planning. That’s when I started spending a lot of time looking at climate change issues. I got a graduate degree in environmental science and also a master’s in public administration in environmental policy. Having that background from each of those camps has been really useful for working with the climate change issue.
What types of clients do you work for?

Our work is primarily with corporate clients. We are doing some work with the U.S. EPA. We are also working with the United Nations and for non-profits including the World Resources Institute and the Carbon Disclosure Project. The other dozen or so clients we have are all large corporations.

What typically drives your corporate clients’ concern about climate change and carbon management?

A lot of our early clients were driven by the financial benefits. When we do these carbon and energy assessments, companies inevitably find projects that have very attractive pay-back periods in financial terms. It always leads to efficiency gains. I can’t think of one client that hasn’t recognized that.

Is it really the case that everything companies might do to be environmentally responsible will always benefit their bottom line? Are there times when companies might consider implementing solutions that would raise their costs?

That is a good question. I think the answer is that generally these efforts are aligned with the bottom line. Environmental or social impacts are all costs – they all represent waste really. Reducing how much energy you use means spending less money and being more efficient. I do think some companies feel like it is within their mission to be environmentally and socially as well as economically responsible. There are definitely a lot of companies that feel that these are the right things to do, and they might make exceptions for these projects as a result of that. What I mean is that they might have a 24-month payback for a typical investment, but they might make exceptions for sustainability projects to allow for a 4-year payback period. Which still represents a very attractive rate of return.

If it is clearly in companies’ bottom-line interest to be environmentally responsible, are regulations and treaties still necessary?

We definitely need to have regulations for greenhouse gasses because it puts a price on emissions and then creates liquidity in the marketplace. There is too much speculation and too much uncertainty now about the value or cost of doing these things. So it is very difficult to plan capital projects on a 10-,15-, or 20-year time horizon.

The other push comes from the consumer demand side. A lot of our clients have come to us because addressing greenhouse gases had been a clear business driver to save money or reduce financial liabilities. The other thing that has happened – really the reason for the big surge – is increased public awareness. Everybody is talking about climate change. So public awareness coupled with government action is really the recipe to stimulate significant action.

What kind of consulting services are companies asking of you today? Do they come to you with specific projects or do they need direction as to their options?

What used to happen is that companies would say, “I don’t know what to do with this – would you help me figure it out?” And now companies are coming with more prescriptive projects. They say, “We would like to do our greenhouse gas inventory. We would like to measure the carbon footprint of this product. We would like to look at these different mitigation strategies and see which one is the most cost-effective.” So things are becoming much more tangible and much better defined – but they really fit into three big buckets – companies are looking to have their emissions measured, to manage or mitigate them, and to find reduction strategies.

In each of those areas, how mature are the tools and systems that are currently being used?

There have been some excellent protocols put together – the most significant one is the World Resources Institute / World Business Council for Sustainable Development’s Greenhouse Gas Protocol. There was a thorough stakeholder participation process to create it and they have done a fantastic job. However, there are a lot of individual projects where there is so much variability and so much uniqueness that it is very difficult to find resources to lean on to do that simply. That is why we get hired – to roll up our sleeves to figure out how to perform a calculation on an entire process. We will use the principles of the greenhouse gas protocol. But there are a lot of interpretations and assumptions one has to make going through them. You just try to document that as clearly as possible and make it as transparent as possible, and move forward.

Who are some of the clients you have worked with recently?

We worked on the Emmy Awards last week with Fox. It was amazingly green. They did a fantastic job of very sincerely figuring out what they could do to reduce the environmental footprint of the Awards. They had solar panels over the red carpets…the red carpet was made of recycled plastic bottles…. the list goes on and on. When I was watching the red carpet show and the stars were all walking down beforehand, they were showing the solar panels. That has such a huge impact on the audience – communicating to them that this is mainstream, this is important, and we are paying attention to it. Not doing it in an in-your-face way but it’s just there – it’s just what we’re doing. I think that is a great story.

The other company we are doing a lot of work with is WalMart and they are completely engaging their supply chain. They have 60,000 suppliers. So if they ask their supply chain to do what they have done in sustainability initiatives, they’ll have an order of magnitude greater impact. I actually think that is the most impactful sustainability initiative in the world right now.

Will the supply chain be able to meet the sustainability standards that WalMart is demanding?

I think it is an excellent question. Anything that is a commodity-based item or service in the supply chain is incredibly difficult to engage because the relationships are so temporary. You really need to have long-term relationships to make a difference over time. I see that as a big challenge.
The best area of focus in a country like China might just be at the level of the energy infrastructure. I know there are a lot of discussions about that going on right now among some of the big companies that are engaged in China. It might be OK that individual factories aren’t that energy efficient as long as they have green power sources. I’m not saying that’s great – I am just saying that it might be the best first step. To green the source of power first and then go from there. Here it is exactly the opposite – here we should focus on efficiency first and then go from there.

What can small or medium-sized businesses be doing about climate change? Where do they find the resources to make improvements?

When you look at the carbon footprint of a product – like a bar of soap or a vacuum cleaner or a bottle of soda – you really get back into a supply chain that has a lot of small and medium sized businesses. I think that has been one of the biggest impacts of these supply chain carbon analyses. Large companies can help by pointing these businesses in the direction of resources that are either free or subsidized. A lot of the utilities have free energy audit services for any size business. The EPA has a fantastic program that is terribly overlooked and underutilized called the Green Suppliers Network (disclaimer: this is one of the EPA groups we are working with). The resources are out there! It is just that people need to be made aware of them and I think these big companies can play a role in that.

I have a feeling that your business is going to be booming in the coming years. What are your plans for growing Clear Carbon Consulting?

We are growing quickly. Fortunately for us, we have been able to establish a wonderful client base and I’m very appreciative of that. I started in March with my own practice and now we have 12 people. I expect us to be about 20 by the end of the year.

I believe that the financial area will be a huge growth opportunity. I think carbon will have a value. Once there are some market-based approaches to identifying that value, I see it as an absolutely massive economic opportunity. We are becoming increasingly sophisticated about ways to address climate change and carbon management. We are also looking to get into these other areas that are going to be complements to it – and I think finance is a big one.
Kyle Tanger is president of Clear Carbon Consulting, the first full-service carbon consulting firm dedicated to creating competitive advantage for companies through measuring, mitigating, and managing their greenhouse gas footprints. He will be presenting a webinar training session on carbon footprint measurement on October 25th.

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