top british companies want action to counter kyoto refuseniks  25/05/2004

call for economic, political and legal measures

A new survey of attitudes to climate change among Britain's leading businesses released by nef, reveals some startling outcomes and changes of opinion regarding the role of government and legislation in regulating international trade.

A set of companies from FTSE 350 with a total market capitalisation of over £202 billion, nearly half of them listed on the FTSE 100, responded to the survey on the effects of climate change on their business operations and finances. The responses show that counter to typical characterisations of the business position, Britain's largest listed companies actively favour the application of economic, political and legal measures to level the playing field with companies in countries that do not comply with the Kyoto agreement on greenhouse gas reductions.

From a range of multiple options to counteract the potential advantage of companies from non-Kyoto complying countries:

• More than one in four favoured legal measures (27 per cent)
  
•  Nearly a third favour economic measures (31 per cent)
  
•  Four out of five favoured political pressure (81 per cent)
  
•  None thought that no measures were necessary (0 per cent)

The companies were asked about measures that could be taken to level the playing field in the same way that international trade regimes can be used to counter national policies that confer an unequal competitive advantage.  Examples of economic measures to be used might include border tax adjustments or trade restrictive measures. 

The survey was conducted ahead of the new European carbon trading regime due to begin in 2005, and is released in the week that a $100 million Hollywood motion picture depicting apocalyptic climate change scenarios is launched. The survey found that:
 

• 100 per cent of companies think that global warming is a major or significant problem
  
• 37 per cent of companies do not consider environmental risk factors such as extreme weather and flooding when considering business locations, including a major national transport company
  
• 93 per cent think that climate change will increase their costs
  
• 85 per cent think that climate risks will play a bigger role in 'strategic planning' in future
  
• 85 per cent think that companies based in industrialised countries that are not part of the

Kyoto Protocol - currently the United States, Australia and Russia - and therefore do not have to internalise the costs of greenhouse gas reductions, will have an unfair economic advantage

"For years scientists and environment led the struggle for public awareness of global warming. Now that the thermometer has reached the economy's bottom line, business looks set to take over. The reason is simple. While some rich countries and their companies take action, others in Russia, the United States and Australia, will not. These free riders are creating an uneven playing field for the global economy, where some corporations start meeting the costs of climate change, and others don't," says Andrew Simms, Director of Policy at nef.

"From our large survey sample of Britain's leading companies, the vast majority think action should be taken. A mixture of political pressure and legal and economic measures to tackle inaction on climate change is now popular among major corporations. Surprisingly some of these are steps that go beyond what many environmental groups have called for. After decades of faltering diplomacy it seems support for hardball business tactics might finally bring the climate slackers to book."

There were several curious responses to the survey, including the response by a major transport company, among others, indicating that they do not consider environmental risk when choosing business locations.  Others stated explicitly that they favoured consumer boycotts and media "naming and shaming" campaigns on this issue, and of the range of economic measures that could be applied it was specifically suggested that tariffs against non-complying nations should be considered