Carbon Trust

What can a snake teach Chinese business?


Courtesy of Courtesy of Carbon Trust

As China celebrated the beginning of the Year of the Snake last week, what should the business community be focusing on as the country strives to promote sustainable growth and long term prosperity?

Those born in the Year of the Snake in the Chinese Zodiac are said to be characterised as being wise and having good judgement - useful traits for amassing riches. In 2013 all businesses in China will have to apply these characteristics to the sustainability challenges they are facing.  China is rapidly becoming the economic centre of the world, but its leadership is also keenly aware that this growth can be sustainable. In order to achieve this, adopting some of the best practices and methods already working successfully in other parts of the world, as well as innovating some of its own, may well hold the key to achieving these goals. 

One example of such best practice is in the understanding and reduction of the embodied environmental impact and key resource use of goods and services, along their whole life cycle and value chain.  China forms an important part of most supply chains of multinational businesses across the world, and as these businesses take steps to reduce their environmental impact, pressure on China to decouple its economic growth from fossil fuel consumption and rapid resource depletion will grow steadily.

In recognition of these trends, the country's 12th five-year plan, released in 2011, outlined a number of ambitious commitments to foster sustainable growth. This included significant support for reducing fossil fuels in primary energy consumption, and cutting CO2 emissions per unit of GDP. These national targets have been broken down into targets per province and industry, and incorporated into performance measurements of the political leadership. The plan also made bold statements on the introduction and enforcement of low carbon regulations, more emphasis on measurement to encourage accountability, investment in energy efficient technologies and promotion of green consumption.

Because of this Chinese businesses are increasingly focusing attention on sustainability, but many are looking for guidance. In our experience of working with companies in China, we have found that they are embracing the opportunities that sustainability presents rather than treating it as a burden. We have been consistently impressed by their willingness to participate and report their environmental data, and it is only the lack of robust and widely disseminated guidance and support that stops them from doing more. This is an example of where we can take experience that we have gained in other parts of the world and share best practice. In a recent international study commissioned by the Carbon Trust into business attitudes to resource efficiency 98% of Chinese companies cited carbon emissions as a priority environmental area for their business to focus on to ensure competitiveness. However when asked why action had not been taken 78% said lack of knowledge was a key barrier.

One of our recent projects, which aims to share best practise and support the Chinese government's drive for measurement to encourage accountability, was to develop and trial a bilingual footprinting tool and accompanying database that allows Chinese companies along the supply chain to measure their Scope 1 & 2 (operational) emissions, as well as a portion of their Scope 3 (value chain) footprint. The tool has been specially designed to provide a useful breakdown for the Chinese company to identify reduction opportunities and also automatically displays the results into reporting categories for the Carbon Disclosure Project (CDP) supplier reporting.  It is currently being piloted with Chinese businesses.  This project was funded by the Strategic Prosperity Fund of the British Embassy in Beijing, with the support of China's National Development and Reform Commission and Ministry of Industry and Information Technology, and executed in partnership with the China National Institute of Standardisation.  The project team included subject matter experts from the Carbon Trust's London and local engagement from the team at the Carbon Trust's Asia office in Beijing.

Although sustainability and climate change have been gradually moving onto the boardroom agenda, practical action has remained very much at an individual project level orbased on a specific technology focus. If China and Asia are to continue their rise on the world's economic and geopolitical stage, sustainability has to be viewed as a must-have strategic tool to create enterprise value and secure future economic growth.

The Chinese New Year is a time for celebration with our increasing presence in China, and other Asian countries, we extend our best wishes for the Year of the Snake; and invite all our clients and stakeholders to work together with us towards a prosperous, low-carbon and sustainable future.

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