Thursday, January 28, 2010

Climate Disclosure: More than a Carbon Inventory

The SEC has voted to require something that firms should already be doing proactively, assessing their vulnerability to climate change and legislative remedies for it. What everyone should recognize, however, is that first generation measures are not enough.

First generation analysis was first-round: a business or agency would inventory its own carbon emissions and the impact that climate change would have on their own operations. This is a good start, and much has been learned.

To go to the next generation, the guiding principle is to evaluate not only your own direct exposure, but also that of important customers, partners and suppliers. You can say it’s their problem, and it is, but it’s also yours. For example, my institutional home, Evergreen State College, has to consider what the consequences will be for student enrollment if fossil fuel prices are increased dramatically. How many commute from distant locations, and how many of these will move to our neighborhood in order to continue their education? If there are likely to be significant shifts in residential patterns that will affect student demand, can we predict them? Are there actions we can take in advance that can minimize the downside of these adjustments or possibly take advantage of the upside?

You could say that what is needed is for organizations to stop looking at themselves as if there were thick lines around their borders and see themselves ecologically.


CrisisMaven said...

While I'm all for such deep, multi-faceted analyses, but before they look for rising oil prices due to climate change, they'd better take into account the moredirect causation due to either scarcity and/or political upheaval in oil-rich regions. And even after that, factorslike this Of Mortgage Brokers, ARMs, Attrition and Marathons might play a bigger role in reducing college attendance than climate change.

Anonymous said...


gordon said...

From the linked NY Times article:

"According to an S.E.C. staff paper, the new guidance urges companies to consider, for example, whether any new law or international treaty limiting carbon dioxide emissions might increase operating costs and prompt a disclosure requirement. A company might also be well positioned to take advantage of a new law mandating increased production of renewable electricity, again requiring disclosure".

This is weird. There is a difference between vulnerability to climate change and vulnerability to policy responses to climate change.