CFO Magazine

Carbon Trading

(continued)

At Entergy, conducting a carbon inventory is a fairly straightforward affair. For starters, Entergy generates a good deal of its electricity from nuclear generators, which do not produce any CO₂. Moreover, nearly 95 percent of the company's CO₂ discharges come from its own smokestacks.

The more diverse the businesses, however, the more complicated carbon reporting becomes. At IBM, managers conduct regular reviews of direct and indirect emissions (that is, those from purchased electricity) during the year. About two months after the company's fiscal year ends on December 31, managers begin rolling up the energy-use and emission-inventory numbers, a process that takes about six weeks. IBM's energy use accounts for about 90 percent of its greenhouse-gas emissions, and Big Blue collects actual-energy-usage data from more than 85 percent of its owned and leased space. Edan Dionne, IBM's director of corporate environmental affairs, says the company files its yearly North American inventory with the Department of Energy and the Chicago Climate Exchange, a voluntary carbon commodity trading system. It also sends a full global report to the Environmental Protection Agency's Climate Leaders program and the not-for-profit Carbon Disclosure Project.

Such reports may help ensure that IBM gets credit for early actions if Congress mandates carbon reductions. Still, critics point out that most U.S. businesses set relative — and not absolute — carbon-reduction targets. Typically, the goals are tied to key performance indicators, such as revenues or units sold. Green Mountain Coffee Roasters, for example, expresses its CO₂ emissions in terms of thermal units per $1,000 of net sales. That's understandable, given that the coffee purveyor is growing at a 30 percent annual clip. But it's unclear what effect — if any — relative CO₂ reductions will have on global warming. "I did suggest an absolute CO₂ reduction once," says Paul Comey, vice president of environmental affairs at Green Mountain. "But our operations people nearly went into shock." — J.G.

To see "Accounting for Waste" — a list of entities providing greenhouse-gas credits, and reporting standards underpinning such offsets — click here.

Comment on this article

Readers' Comments

What individuals can do on a daily basis?

Posted by Ajith Sankar | January 21, 2008 09:39am

Paper used in office

Posted by Raman Rajagopal | January 11, 2008 06:16am

Good Information

Posted by Louisa Nara | January 08, 2008 11:00am