Report Explores the Potential Impacts of Changing Energy Policies on Businesses

On Sept. 20, Global Business Network (GBN), a member of the Monitor Group, in cooperation with EPA, released a report exploring potential impacts on business of changing energy policies, climate change, global power shifts, technological advances and other uncertainties.

In "Energy Strategy for the Road Ahead," senior executives from 20 major U.S. companies, including Merck & Co. Inc., National Starch & Chemical, HSBC and Toyota, along with energy experts from GBN and the EPA's ENERGY STAR program, consider the potential energy impacts that U.S. businesses may face over the next decade. Based on four plausible scenarios of the world in 2020, the report identifies a set of strategies that businesses can employ to ensure energy success across a range of futures.

"The relationship between energy, the world's economies and society is fundamentally changing," said Peter Schwartz, chairperson of GBN and former strategist for Royal Dutch/Shell. "This report encourages U.S. business leaders to reevaluate their current operations to determine if their businesses can survive an uncertain and potentially disruptive energy future."

"Energy Strategy for the Road Ahead" assesses the implications of four possible future scenarios:

  • Current economic and energy trends continue with no major regulatory shifts in climate policy.
  • Investment flows overseas make it difficult for most U.S. companies to adjust to an energy and carbon constrained world.
  • Severe weather events and international economic crises bankrupt many U.S. companies and institutions.
  • An innovative focus on clean and efficient technology fosters a new era of economic prosperity and self-reliance in a carbon-constrained global marketplace.

"Scenarios help us make sense of our emerging future," Schwartz stated. "By considering possibilities such as these, businesses will be able to make more reasoned choices and rehearse their decisions against a variety of futures."

To prepare for the uncertain road ahead, the report outlines five robust steps that companies can take today:

  1. Master the fundamentals.
  2. Take both a longer and a broader view.
  3. Search out business transformation opportunities.
  4. Prepare contingent strategies.
  5. Take personal action.

"As business leaders, it is essential that we plan for the future," said Willie Deese, president of Merck & Co., Inc.'s manufacturing division. "'The Energy Strategy for the Road Ahead' report provides guidance to help companies prepare for future energy-related risks. Acting now just makes good business sense."

"As a global organization, HSBC is determined to develop a sustainable business," said John Beckinghausen, first vice president, corporate real estate, North America, HSBC. "This is an important issue not only for us as a company but for our shareholders, customers and employees. Reports such as 'Energy Strategy for the Road Ahead' allow us to learn from our peers, discuss best practices and create a discussion forum to increase awareness."

"Our participation in 'Energy Strategy for the Road Ahead' has been an invaluable input for developing an innovative energy strategy and management system for our energy- and capital-intensive Natural Polymers Group," said Dex Brown, Group vice president of National Starch and Chemical. "We fully appreciate the efforts of EPA's ENERGY STAR Program and Global Business Network for bringing this project together. We see using this experience as a springboard for such approaches elsewhere within the company and believe it offers similar potential value for other like-minded companies."

Increasing the visibility and importance of energy management at the top levels of corporations is recognized as a key factor in reducing future energy and climate change risks. Many companies have already made energy efficiency a priority by actively participating in the ENERGY STAR program and instituting strong energy management goals. Twenty of these leading companies participated in the development of the report and its recommendations: California Portland Cement; Cascade Engineering; CEMEX; Dow Chemical; Eastman Chemical; Genentech; General Motors; HSBC; Jones Lang LaSalle; Merck & Co. Inc.; Mercury Marine; Mittal Steel; National Starch and Chemical; Owens Corning; PepsiCo / Frito-Lay; PPG; Procter & Gamble; Shell NA; Toyota NA; and UPS.

The report is available at http://www.gbn.com and http://www.energystar.gov/energystrategy.

This article originally appeared in the 09/01/2007 issue of Environmental Protection.

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