KEY POINTS:
A spate of corporations flaunting their environmental credentials, and especially their concern about climate change, says as much or more about a shifting commercial landscape as the planet's future.
The so-called US Climate Action Partnership today called for a federal plan to curb greenhouse gas emissions, a day before President George W Bush is expected to avoid proposing just that in his State of the Union speech.
"These recommendations should catalyse legislative action," said Jeff Immelt, chairman and chief executive officer of General Electric Co, a member of the group, which also includes BP America.
Climate change is set to dominate discussions this week at the World Economic Forum in the Swiss ski resort of Davos, where some 900 company chief executives and board chairmen are expected to rub shoulders with 24 heads of state.
Both GE and BP Plc, parent of BP America, are at the forefront of a new breed of companies that want to be big players in a new clean, or low carbon, economy fashioned by concerns over climate change.
BP says it will direct some 5 per cent of its investment over the next 10 years into clean energy -- low carbon energy sources like wind that contribute less to climate change than conventional fossil fuels like coal and oil.
But companies may be able to make climate change work for them without necessarily tweaking their business plans -- with the right policies.
Citigroup noted in a research briefing on Monday that even "dirty" power companies can profit from carbon markets, citing the example of RWE AG, one of Europe's biggest power-producing companies.
Under the EU carbon trading programme -- the bloc's main climate change strategy -- power companies get a certain quota of greenhouse gas emission permits for free, but still pass on the price at which they trade to consumers, bagging a profit.
"Despite emitting about 90 million tons of carbon dioxide (in 2005), or about 10 per cent of Germany's total, this 'dirty' utility has been enjoying windfall profits," the note said.
The aviation sector joins the EU carbon trading programme in 2011, and many airlines have lobbied hard for it as some economists suspect airlines want to cash in on such a windfall.
"They could, and I think would, pass on more than 95 per cent of the (carbon) cost," said Richard Tol, senior research officer at the Economic Social Research Institute in Dublin.
Citi listed 74 companies across 18 countries that are well-placed to benefit from climate change, including clean energy companies, water utilities, some carmakers and specialist carbon trading firms.
Investment in clean energy has likely set a new record of some US$100 billion ($145.1 billion) over 2006, according to research firm New Energy Finance.
Other business opportunities including cashing in on the growing financial clout of the "green" consumer.
British retailers Marks and Spencer Group Plc and Tesco Plc last week said they would spend £200 million ($573.9 million) and 500 million respectively to cut carbon emissions and waste in their bids to win over environmentally conscious shoppers.
Tesco cited the commercial success of its premium organic foods.
Meanwhile Japan's Mitsubishi Motors Corp said on Monday it would begin selling a so-called flexible fuel vehicle which can run on both conventional petrol and environmentally friendly biofuels in Brazil in the 2007/08 business year, and later on in the United States.
- REUTERS
