Group 6

Astrid Safiera Pradipta

Aninditra Nuraufi S.
Dwiwulan
Monica Shella
 Climate Change Strategy:
The Business Logic behind
Voluntary Greenhouse Gas
Reductions
 5. Improved Risk
Management.
Greenhouse gas reductions can become an
opportunity to reduce financial risks. These risks
can be categorized into two domains.
1. Natural consequences. The first category is the
risks associated with the damages and remediation
due to climate change itself (as a result of droughts,
floods and hurricanes)
2. Financial consequences. The second category of
risk is that associated with the exposure to the costs
of greenhouse emissions in any regime to mitigate
climate change. Companies could face unexpected
expenses with future regulations, fines, taxes and
caps on products that produce greenhouse gases.
6. Increased Market Demand.
Greenhouse gas reductions could enhance market share
for products and services by appealing to both end-use
customers or buyers and up-front suppliers or vendors.
Green marketing efforts may enhance the company's
public image and the marketability of its brand name.
On the other hand, conventional wisdom suggests that the
best marketers can expect is that when goods provide
comparable value (and are comparably priced),
environmental attributes can break the tie.
The International Aluminum Institute (IAI) claims that the
industry has cut greenhouse gas emissions in some cases
has attempted to present a greener image by touting that
more than a quarter of aluminum demand is met by
recycled aluminum. This to satisfy or neutralize conflicting
interests that may impinge on industry operations.
 7. Setting New Strategic
Directions
The example of new strategic directions :
Measuring environmental costs and risks associated
with product or process lines, companies can identify
strategic opportunities in redirecting attention and
resources towards less risky and more attractive
businesses.
One clear area where strategic opportunities from
greenhouse gas reductions may emerge is the
development of large-scale alternative energy
schemes.
Beyond alternative energy opportunities, there is an
entire service and technology sector that specializes in
greenhouse gas (and other pollution) reduction
technologies (e.g. Environmental industries in Canada
Certain product markets offer
opportunities to reduce carbon
load and improve market
performance. One area with a
great deal of activity is bio-
materials, which shift the raw
material for synthetics away
from fossil fuels.
In the end, the entrepreneurial
question in greenhouse gas
reductions is :
How can one generate carbon
credits at the lowest possible
cost?

Greenhouse gas trading could

create brand new markets for
companies and industries.
 8. Enhanced Human
Resource Management.

Amory Lovins of the Rocky Mountain Institute speaks often

of the cultural elements of climate change strategies:
There is some very good news about the climate problem:
we do not need to worry about how the climate science
turns out or whether this is a real problem or not because
we ought to do the same things about it anyway just to
save money. The obstacles to achieving this profitable
resolution are not technological or economic. Rather, they
are cultural and procedural. They are what economists call
market failures
This shows that the strategic benefits in culture change
requires a change in the structure and culture of the
organization: reward systems, training, management
philosophy, employee involvement, reporting
requirements, data collection and analysis, etc. Companies
must engage workers as partners in identifying and
 8. Enhanced Human
Resource Management.

On the other hand, the adoption of

greenhouse emissions strategies can
improve the morale of the company
and thereby increase the retention
rates of skilled workers, lower the
costs of recruiting and training new
ones, and attract and retain higher
caliber applicants.
 Conclusion
Controls on greenhouse
gas emissions represent a
market transition; one that
will yield winners and
losers. To know where the
company position is, the
company should
embracing or resisting
voluntary greenhouse gas
reductions, comes down to
It is important to see how
companies can build on
their strategic
opportunities, creating
synergistic benefits among
multiple efforts and also
influencing their external
environment to favor even
more initiatives.
In the end, the
identification of
opportunities in strategic
climate change strategies
must begin with the most
simple of measurements to
determine the extent of