Counsel to Counsel - September 2008 - (Page 9) POWELL GOLDSTEIN LLP CLIMATE CHANGE AND NON-COVERED COMPANIES: Preparing for Pending Legislation Most in the scientific community agree that climate change is happening, and many businesspeople feel that u.S. legislation to deal with it is inevitable. While large, “covered” entities like electric utilities and energy-intensive industries have developed climate change strategies, many likely “non-covered” companies and industries, such as manufacturing or commercial real estate, have not. situation implementation steps • Assemble a team to monitor climate change legislation. • Assess its potential impact to your energy, water and raw material use. • Investigate voluntary reporting programs. • Measure emissions levels and determine, if necessary, opportunities to lower them. • Institute energy, water and raw material savings measures. • Incorporate climate change into your company’s strategic plan. Inside counsel must ensure that upper management is kept abreast of climate change legislation and its potential impact to the business. Further, inside counsel can play a key role in developing a climate change strategy that reduces potential climate change and legislation-driven risks and determines whether new revenue and public relations opportunities exist. challenge in-house counsel Begin reducing energy, water and raw material consumption. You will save money, reduce your carbon footprint and enhance the company’s environmental image. Assemble a team to monitor climate change legislation and assess the potential impact to your company. The team should include individuals who can assess everything from energy, water and raw material use to current greenhouse gas emissions. approach adopted Voluntary assessment and reporting programs can help you get started. The Environmental Protection Agency’s Climate Leaders program is an industry-government partnership that works with companies to develop their climate change strategies. Other programs include the Department of Energy’s Voluntary Reporting of Greenhouse Gases Program, The Climate Registry, the Leadership in Energy and Environmental Design (LEED) Green Building Rating System and the EPA’s SmartWay Transport Partnership. use these programs to develop your strategy and familiarize management with the assessment and reporting process. under proposed cap-and-trade legislation, a market for emissions reductions credits will be created in the united States. Similar international trading programs already exist. The Kyoto Protocol, which set greenhouse gas emissions targets for participating countries, drove the creation of global cap-and-trade credit markets that generated $32 billion in trading in 2006 and $64 billion in 2007. There’s a financial opportunity, therefore, to understanding your company’s carbon footprint. A company that can verifiably reduce its emissions likely will be able to participate in an emissions reduction credit market. understand your carbon footprint and potential business risks and opportunities now. Similarly, the LEED ratings are helping real estate developers design more environmentally friendly buildings. Such buildings use less energy, command higher rents and result in a sales price premium. Companies that develop a climate change strategy before legislation is enacted will have a competitive advantage. Emissions and energy and raw material costs will be reduced; the company’s image will be enhanced. Further, a company that is prepared to participate immediately in an emissions reduction credit market will gain a financial advantage. measuring success future issues to consider The Kyoto Protocol expires in 2012. The new administration may choose to participate in its successor. That would allow U.S. companies to participate in the global cap-and-trade marketplace. Christopher A. Thompson helps clients assess the increasingly complex matrix of local, state and federal environmental laws to determine their potential climate change risk exposure. He can be reached at cthompson@pogolaw.com. www.martindale.com/c2c SEptEmbEr 2008 best practices 09 http://www.martindale.com/c2c
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