Charles Henderson - Talk of carbon slipping down agenda is hot air

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BETWEEN The Lines

HAS carbon disappeared off the corporate radar as businesses switch to short-term survival mode? Has the eco-director of today sacrificed his or her green credentials despite customers and clients still demanding action from the businesses they buy from?

It's worth having a think about how carbon action is delivered through today's corporations. As with most business issues, leadership comes from the top, and the boardroom is often where strategic green vision thrives.

Bryan Donaghey, managing director of Diageo Scotland, which owns 27 distilleries, employs 4,500 people and produces a third of the country's whisky, has been described as a climate change evangelist. When asked about his green leanings, he said: "It makes sense on so many levels. The whisky industry is part of Scotland's heritage, including its wonderful natural environment. Being responsible is what's best for the company, and what's expected by customers. And, as a family man, I think about my children's future. I am in a fortunate position of being able to influence the business that I am a part of."

Corporate social responsibility (CSR) and environment managers are the foot soldiers who carry this vision forward. At Scottish & Newcastle, climate change is als o high on the agenda. Richard Naylor, UK environment manager, explained: "In the past three or four years, senior management mindset has shifted, influenced by expectation of the supermarkets, public perception and energy costs. Now, the environmental agenda is no longer seen as a risk, but, rather, a competitive investment opportunity."

Has the recent downturn negatively influenced activity? Not for many. Diageo considers the cost of carbon in all its major decision-making. As a result, at Cameronbridge in Fife, a 65 million biodigestion and biomass plant is being planned, which will use waste residues from barley to create natural gas and fuel – both of which will be used to run a combined heat and power plant. If all goes according to plan, the site will be entirely self-sustaining in power. Diageo believes this will be the largest single investment in renewable technology by a non-utility company in the UK. This plant has in fact become more viable over the past year or two as fossil fuel costs have risen. A similar development is taking place at Roseisle, in Speyside.

Research and development investment across technologies is critical to the performance of some industries, however. With transport fuel as the least advanced renewable energy, the sector is faced with a huge challenge.

FirstGroup, with headquarters in Aberdeen, is the largest transport company in the world. Last year, it transported 2.5 billion people on trains and buses. Terri Vogt, group head of CSR, explains the options and limitations: "Training and efficiency improvements are the first route to reducing emissions, and we will always push better driving styles and vehicle replacements.

"We have switched to 5 per cent blended biofuels for our buses in the UK. However, concerns over the environmental and social impact of biofuels mean we cannot yet make a commitment to go beyond the Renewable Transport Fuels Obligation in this area. Diesel-hybrid vehicles are being tested at the moment, and are expected to form a growing part of our fleet from 2012."

She adds: "Hydrogen fuel-cell powered buses, which have been tested in London, are popular and reliable, but it is difficult to predict when the infrastructure will be in place to make a large-scale change. We are keeping a close eye on developments."

Despite the limitations, FirstGroup has still set itself a 25 per cent carbon dioxide reduction target for the UK bus division, and 20 per cent for the train division, by 2020.

Adapting to the inevitable impacts of climate change poses another challenge. Greenvale, which employs 200 people in Scotland, and has 35 contracted growers, supplies many of the potatoes we buy from major supermarkets. Stephen Rennie, environment manager, said: "We've noticed the weather has increasingly affected crop in the past decade or so. Extreme events are more frequent, and generally, temperatures are less predictable."

Potato blight is a risk with warmer, wetter weather, and Greenvale is at the forefront of developing more resistant varieties with the Scottish Crop Research Institute at its Perth centre, such as the Lady Balfour potato.

And action doesn't stop in thinking about adaptation. Greenvale has calculated the life cycle impact of two of its product lines. Again, the results are interesting – almost half of the carbon emissions from the humble spud are created when we cook it.

Scottish Water, a publicly owned company, sits at the centre of the country's water cycle, supplying 2.3 billion litres of drinking water, and removing nearly a billion litres of waste water, every day. Climate change adaptation is very high on the agenda there, too.

Mark Williams, environment manager, explained how climate change fits among its priorities: "We have a public duty to treat water carefully to meet stringent quality standards, and to cut down on leaks – and hence our carbon footprint, too. A close eye is being kept on work by the UK Climate Impacts Programme, which will soon produce detailed predictions of temperature and precipitation, at high resolution, for Scotland."

Better planning will allow the utility to work closely with authorities, businesses and communities throughout the country, he added.

The climate challenges facing major Scottish businesses, from carbon reduction targets to emerging technologies and adapting to the inevitable climatic changes, are complex and subtle. Many businesses are doing much to reduce carbon, and prepare. But the big picture is not entirely clear.

In tomorrow's final article in The Scotsman, we will draw conclusions from all the themes covered in the series – policies and targets, clean technology, carbon trading, progressive corporate vision, adaptation to the change that is inevitable – and consider what they mean for Scotland as a whole, for our businesses and us as inhabitants, employees and business owners.

&#149 Charles Henderson is a climate change consultant. His final article on Climate Change and Scotland will appear in the Focus slot on the Debate and Opinion pages tomorrow.