How Companies Become Carbon Dieters

Corporations are starting to add up their carbon output

(Corrects the title of Gwen Ruta, who is vice-president of corporate partnerships at the Environmental Defense Fund.)

Workers at Toyota Motor's (TM) 20,000-sq.-ft. data center in California may have been puzzled by the strange metal cart being pulled through the aisles over the past year. The high-tech trolley was developed by IBM (IBM) to sniff out wasted energy using heat-seeking sensors that collect a floor-to-ceiling, three-dimensional view of a room in cool blues and hot reds. It sees "in color exactly where the heat is coming from so you can address it," says Wayne Balta, vice-president for corporate environmental affairs at IBM. The machine has helped IBM trim its own energy use by 5.4 percent and has saved nearly 350,000 tons of carbon dioxide emissions for clients, he says.

Cutting carbon is becoming de rigueur for multinationals. More than 80 percent of the world's 500 biggest companies now report their greenhouse gas emissions and climate change strategies to the London-based Carbon Disclosure Project, which compiles the information for investors. Measuring carbon emissions "is part of managing a responsible business in the 21st century," says Adam Kanzer, managing director of Domini Social Investments, which manages about $1 billion in assets.

Some of the savings are easy. IBM's data centers, for instance, are energy-intensive, and the company found substantial savings via simple measures such as installing fans near hot spots. And Toyota's efficiency gains came mainly from removing two air conditioners from the data centers.

It can be hard to tell how deep such efforts really go: Are they a sincere attempt to reengineer processes or just greenwashing? Oil giant BP (BP), despite its "Beyond Petroleum" slogan, invests $12 billion annually in oil and gas research—25 times what it spends on wind and solar. And even when companies do count carbon, they often focus more on the opportunities than on the risks. In an Ernst & Young survey of 300 companies in 16 countries, 85 percent said new revenue opportunities were a big part of climate-change initiatives. Corporate green commitments can be "very murky," says Gwen Ruta, vice-president for corporate partnerships at the Environmental Defense Fund. "You really have to dig to try to understand what the company is actually saying."

Many companies, though, are getting more serious about the carbon threat. Wal-Mart Stores this year began a program to prod its 100,000-plus suppliers to cut greenhouse gas emissions by 20 million metric tons over five years. That includes buying more products locally, reducing packaging, and finding the most energy-efficient products. In April wind turbines were put atop parking lot light poles at two Wal-Mart (WMT) outlets to supply some of the stores' electricity.

Office Depot (ODP) is aiming to cut carbon by trimming deliveries. The company made about 25 million customer deliveries in 2008, generating 53,000 tons of carbon dioxide, says Yalmaz Siddiqui, the company's director for environmental strategy. In April, Office Depot began offering rebates that encourage customers to consolidate orders, which reduces fuel use and emissions. "None of it matters in and of itself, but it all matters in the aggregate," Siddiqui says.

Bon Appétit Management, which provides food services for more than 400 corporations and colleges, is cutting its carbon footprint by making menu changes such as substituting turkey burgers for higher carbon beef burgers; a pound of beef generates the equivalent of 21 pounds of CO2 as cattle emit methane through their digestive system, says Maisie Greenawalt, Bon Appétit's vice-president for culinary development. The company has reduced its use of beef by 33 percent since 2007. "We see our sustainability commitment," Greenawalt says, "as being overall cost-neutral."

The bottom line: Counting carbon is getting more common at corporations, though it's not always easy to tell how effective their strategies are.

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