Political context of climate change for businesses
“National Program for Climate Change”. In particular, it is due to the rise of renewable energy production and to an improvement in energy efficiency. However, it should be taken into account that the outcomes of this program are influenced by Portuguese economy’s decline during recent years. Also the “Program for Energy Efficiency in Buildings” has had remarkable results.
Beyond the 2012 Kyoto horizon, Portugal presently envisages the EU “Climate and Energy Package” as the basis on which to build its climate policy. The current Government Program states that Portugal should accomplish substantial improvements in energy efficiency, for instance, a 25% reduction in private energy consumption and a 30% decrease in public energy consumption by 2020. In addition, the current Government agrees that the fossil fuel dependency has to decrease. At the same time, the Executive’s ambition is that “in the medium-term, the country should reach the lowest energy intensity in the EU”.
How climate change policy affects companies’ performance In the last decade, Portuguese companies - following the path of EU States - have become increasingly concerned about climate issues. As a consequence, there has been a transition to production processes less exposed to energy prices. However, contrary to the clout that investors and shareholders have in decision-making, customers and the public opinion still lack recognizable power in pressing companies to join and promote a low-carbon economy.
There is a significant group of companies that already have voluntarily incorporated emissions management in their strategies. Some of those companies have not
yet specified a clear objective regarding GHG emissions reductions. Nevertheless, companies in general have continuously invested in energy efficiency as well as in renewable energy production. Therefore, Portuguese companies have made some progress, paving the way for an effective management of climate change.
Companies that are not part of the EU ETS and listed in the stock market do not specify political targets and commitments when
communicating their climate change strategies. When defining GHG emission targets, they base it on internal analysis and unilateral projections that assess companies’ abilities to decrease operational costs. In sum, the ambition behind the objectives stems only from forces within the company. Another common feature is that the formulation of energy consumption cuts and GHG emissions strategy only targets a fraction of the companies’ activity. Companies which are part of the EU ETS present targets according to regulations. Often, these companies’ inventories and mandatory objectives represent their whole climate change management strategy.
Pre-empting and adapting to future national regulation Only 46 % (6) of the Portuguese responding companies have voluntary and strategic goals to reduce their carbon footprint or overall energy consumption. The lack of more proactive and preventive measures being adopted may indicate that decision-makers within companies do not expect further regulation in the short-term.
92% (12) of the Portuguese companies that answered the CDP 2011 questionnaire are implementing energy efficiency plans and carbon footprint reduction strategies. It is
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“CGD’s strategic programme “Caixa Carbono Zero”, in place since 2007, defines the Bank’s climate strategy and promotes specific actions on the following areas: emissions accounting and reduction; carbon offsetting; market opportunities and risks and public awareness. Opportunities and risks associated with climate change perceived by CGD have so far been part of an overall approach to governance and compliance”
CAIXA GERAL DE DEPOSITOS
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