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From Starbucks to Nike, Business Asks for Green Legislation

Would it surprise you to learn that Starbucks is a leading advocate for action on climate change? "The way we see it," says Ben Packard, Starbucks VP of Global Sustainability, "addressing climate change will help companies like ours reduce operating costs and mitigate future economic instability. Starbucks has joined with other companies to form a coalition that calls itself BICEP (Business for Innovative Climate and Energy Policy) and it has a clear message for next year's Congress--move quickly on climate change to kick-start a transition to a clean energy economy.
by Mindy S. LubberHarvard Business Review Posted on Dec 05, 2008

Would it surprise you to learn that Starbucks is a leading advocate for action on climate change?

Think about it. Starbucks' success hinges on a robust coffee crop, which needs certain growing conditions. But the company is seeing the imprint of climate change on coffee growing regions around the world. Global rainfall and harvest patterns are shifting--hurting farming communities and shrinking the availability of arable land.

"The way we see it," says Ben Packard, Starbucks VP of Global Sustainability, "addressing climate change will help companies like ours reduce operating costs and mitigate future economic instability due to extreme weather conditions, agricultural loss and the very real human costs they bring."

Levi & Strauss agrees. Cotton provides 97 percent of the raw materials for its famous jeans, and growing the crop requires vast amounts of water and chemicals. Levi is facing rising water scarcity, fueled in part by global warming, and in response it's experimenting with alternative fibers that can be produced more sustainably.

Making their own operations more climate-friendly isn't enough for these companies, however, and that's why they've joined with Nike, Sun Microsystems and Timberland to launch a business coalition that intends to flex its muscle in the national dialogue on climate change.

The coalition calls itself BICEP (Business for Innovative Climate and Energy Policy) and it has a clear message for next year's Congress--move quickly on climate change to kick-start a transition to a clean energy economy.

Agricultural impacts are not the companies' only concerns. Nike has supply chain issues. Operations at its 700-plus contract factories producing Nike-branded products are the largest contributor to its carbon footprint. Transportation is another key driver, producing one-quarter of its carbon emissions.

The massive operations and supply chains of all the BICEP companies will be profoundly impacted by global warming regulations that will make fossil fuels more expensive and clean energy and energy efficiency more attractive. But at the same time, these consumer companies have enormous influence and opportunities to bring climate-friendly products to the marketplace.

To some degree, they already are. Sun Microsystems produces energy efficient computer servers and has teamed up with Pacific Electric & Gas to make them more available to California businesses. Nike is working with its contract factories to improve their energy efficiency and embed green building principles into the design and construction of new factories.

But to reduce their carbon footprints to the level that scientists say are necessary, these consumer giants need national policies that will reward them for incorporating clean energy innovations into their products, their operations and their supply chains.

BICEP companies would like a say in how these policies are crafted. They also want to jump out in front because they know that the companies that position themselves and establish competitive advantage relative to their peers will be the winners. They don't want to be in the tough spot U.S. automakers are now in - pleading for federal handouts because they didn't see this clean-energy train coming.

Mindy S. Lubber is president of Ceres, a leading coalition of investors and environmental groups working with companies to address sustainability challenges such as climate change.

Read the post at Harvard Business Review

Meet the Expert

Cynthia McHale

Cynthia McHale is the Director of Ceres Insurance Program. She brings over twenty years of sector expertise working with many of the leading North American and European insurers, re-insurers and industry brokers. In her current role, Cynthia is leading a campaign to promote the insurance industry’s understanding and leadership on climate risks and opportunities. As risk managers, risk carriers and major institutional investors, insurers have a vital interest, and play an important role in fostering society’s response to global warming. Stronger insurance industry leadership on climate change issues will strengthen and accelerate our nation’s transition to a clean energy future while helping to build a resilient and sustainable society.

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