There is a resurgence of interest from corporates in flexible and sophisticated approaches to address climate impact, says Edward Hanrahan, CEO of ClimateCare, as he reflects on ClimateCare's 20 years in business.
EF: How has the debate about corporate climate action developed in the years ClimateCare has been around?
Edward: If you're talking about markets in general, it is worth looking back at 2008 and compare it with 2016. In 2008, a much broader range of corporates were out there looking to take full responsibility for their climate impact. Ironically, it felt more urgent back in 2008 than today. We all know this isn't the case, but certainly what we felt was a much higher degree of urgency among corporates before the financial crisis.
But this has started to change after COP 21. In the past 12 months we've seen a real change in what we call the mood music in the market. A lot more demand is coming through for our services from a lot more people. There's a real resurgence of interest from people in taking responsibility for their full emissions. People look for flexible structures. Blended solutions are starting to come back. We're finally seeing a greater demand for these sophisticated instruments.
EF: How has ClimateCare evolved to meet the needs of corporates today?
Edward: ClimateCare was founded in 1997 the run-up to the Kyoto Protocol being adopted. The concept was to give corporates a variety of flexible mechanisms to allow them to find the quickest and most cost-effective way to take full responsibility for their emissions and climate impact. That's still the crux of what we do. We look to find solutions for businesses and governments to address climate change while delivering value and avoiding risk - be it through buying renewable energy or emissions reductions.
We've evolved to being able to offer a wide range of products beyond carbon credits. Because of our background in methodology writing, we wrote the first effective cookstove carbon credit policy. We were also the first to offer other development outcomes and fund outcomes aligned with global goals - such as the Sustainable Development Goals (SDGs) - for what was previously pure carbon outcomes.
EF: Can you explain the importance of going beyond carbon reduction outcomes?
Edward: The point is really that these outcomes – such as public health, development and economic empowerment – are separate outcomes that might have separate funders and buyers. A project can have climate attributes we sell to one person, while we sell development attributes to another person. We try to avoid calling them "co-benefits" since they will then always be subservient to carbon benefits. We try to always keep them separate and commercialise them to different types of buyers.
EF: You mentioned buying renewable energy as one way to address climate impact. What is the opportunity for corporates in green energy and what is ClimateCare working on in the space?
Edward: We've built out a big renewable energy business alongside the carbon business. Corporates want to buy green energy and are signing up to initiatives such as RE100. This year in Q4 we will launch a new UK solar programme and are looking for corporates to partner with on this. The initiative will see our partners fund the installation of solar panels on UK schools. We will also run renewable energy education programmes in the schools. For the corporate, this is a CSR programme which will give them exposure in the local community. This is the first time we've done a domestic project as we normally work on a needs-basis with a focus on the developing world. But our clients have asked us for many years to do something in the UK and Europe in addition to our core activities.
EF: Looking ahead, what is still needed to boost corporate climate action?
Edward: More businesses need to understand that taking responsibility for emissions is a key part of climate leadership. We need to increase pressure on businesses, but should also reward corporates that take action. Whether we do this through a compliance or voluntary framework is really irrelevant.
Policy is still extremely important as it can give corporates a level playing field to work within, which is what they always ask for. We've seen an increase in corporates taking action on a voluntary basis, but not that many companies can take that leadership position. There is very little in the way of true compliance driving emissions reductions today.