CSR and Low-Carbon: Businesses Need Sticks as well as Carrots

The President of the UK arm of PepsiCo has said that UK business 'needs sticks as well as carrots', to ensure it takes action against climate change.

Richard Evans made his slightly surprising remark at a meeting entitled 'What next after Cancun?' organised by the Aldersgate Group, a business-led coalition to tackle climate change. PepsiCo has made environmental issues a key part of its CSR activity.

He said that the 'stick' for business was a robust carbon price. It would add certainty for business and aid planning. The carrot would be simplification of existing regulations. He said that the huge number of agreements and acronyms were impossible to navigate for a company whose primary role was not to be a climate specialist. Mr Evans acknowledged that companies the size of his own had the finance and resources to cope but this was not the same for all business. SMEs needing to deal with this, even those hoping focus their CSR strategies on environmental issues, will really struggle.

Mr Evans also suggested that instead of taxing employment, government should tax the use of fossil fuels.
In closing he asked the government to help stimulate investment in the green economy by allowing businesses to count the carbon benefit of off-site generation of renewable energy. He said this was a simple measure that would make a real difference to business.

As part of its CSR programme, PepsiCo UK is looking to power more of its business with renewable energy. The company has a target of 100% renewable power by 2023.

Another speaker at the event was Yvo de Boer, a former Executive Secretary to the United Nations Framework Convention on Climate Change (UNFCCC), and now a special adviser to KPMG. He said that what was now needed were very practical steps to make sure taking action on climate change was effective.

He warned against 'symbolism' or 'politics' and said that instead that the focus should now be around 'green growth' for business. Mr de Boer said the choice was between the 'green race' - and the 'black race', represented by short-term thinking made typical by the global economic crisis. He said that this road prioritised cheap coal and conventional sources of energy.

Aldersgate Group Chairman, Peter Young, said that UK business could now show leadership by developing 'financial instruments that are profitable and actually deliver' in funding projects of value. The incentive, as well as one of CSR, is that it could make London the centre of international climate financing and generate a lot of wealth for the UK.

With HSBC estimating that the energy efficiency market will be worth $1.2 trillion and the renewable market £1 trillion by 2020, this presents a real opportunity for businesses.

Photo credit: John Morgan