Climate of change

Summary
• The timber sector can gain business benefits by reducing its environmental impact.
• The EU’s Emissions Trading Scheme will have a substantial impact on heavy road users.
• Flood risk is one of the most apparent consequences of climate change.
• A flood management plan can save up to 90% on the cost of damaged stock and moveable equipment.

Investors in the UK and worldwide are starting to look ahead at the physical impacts of climate change on business continuity to 2030. Beyond forest certification, how best can companies in the timber sector direct their efforts and gain business benefits by reducing their environmental impacts?

“It makes sound economic sense to follow a path of carbon emissions reduction,” said David Boomer, head of energy efficiency and climate change at the Institute of Directors. “For companies with a significant proportion of their operating costs related to transport, the incentive couldn’t be more apparent. There are also less obvious pressures through the workings of the Climate Change Bill. This imposes a Carbon Reduction Commitment on large organisations, like B&Q for example, who will in turn support and seek efficiencies from the organisations comprising their supply chain.

“The Carbon Reduction Commitment will create an unofficial league table. Positioning will depend not just on energy reduction: those companies taking up the new voluntary carbon labelling standard, PAS2050 (recently launched by the Carbon Trust and BSI) will be ranked automatically towards the top of the table. Potentially this means they will be less subject to formal emissions audits by government than those at the bottom. The ranking may also provide a competitive advantage. You can therefore see it’s in companies’ interests to cut carbon in any form, including from their supply chains.”

Carbon reduction labelling, as set out in PAS2050, is yet to be widely promoted to buyers and consumers as a positive environmental choice. However, a number of major retailers, FMCG (fast moving consumer goods) product manufacturers, and suppliers to the construction sector, have already trialled and introduced these labels. Landscaping product supplier Marshalls announced just a few weeks ago that it would carbon-label its whole range. How long will it be before the timber sector is asked by its customer base to justify our claim of timber sustainability on the same basis?

The Boy Scouts’ motto of “Be Prepared” seems doubly applicable while government’s policy maps contain a suggestion that road transport should be included under the EU’s Emissions Trading Scheme. The impact of this proposal on heavy users of road transport could be substantial. The fiscal potential of CO2 risk exposure was echoed at the launch of OECD’s Environmental Outlook to 2030 earlier this year, when OECD secretary-general Angel Gurría talked of “slowly phasing in a global carbon tax”, and even cited possible price tags. For such operational cost reasons alone, promoting climate change risk to a board-level management responsibility would indicate good governance.

Flood risk is one of the more apparent manifestations of climate change, and one which company management can quickly grasp. The effect of the almost invisible river hidden in a dry ditch next to a warehouse might only become apparent under freak weather conditions, but its effects could be devastating. Research by the Environment Agency shows that companies setting up a flood management plan can potentially save 20-90% on the cost of damaged stock and moveable equipment.

Whilst flooding may affect premises, it may also affect major road supply routes to customers. Predicted sea level rises will ultimately have an effect on the 65% of timber that passes through our ports, though Peter Barham, sustainable development manager with Associated British Ports, can offer some comfort here: “We work closely with the Environment Agency to put in place flood defences that will cope with a once-in-200-year freak storm along the east coast of England.

“Timber companies need to look for ports that have the best flood defences, but also to look at other factors such as provision for onward rail transport,” added Mr Barham. “Rail is likely to offer valuable options for the future since any government serious about reducing CO2 will have to address road transport emissions. The rail link to the Port of Hull has just been improved by Network Rail, and at Southampton we’re developing a facility that will take the new higher container boxes and transfer them straight onto rail.

“Freight Facility Grants are available to transport schemes that can demonstrate positive carbon reductions and, with the right help and incentives from government, there’s a lot of opportunity for innovation,” he said.

With UK government intent on turning us into the world’s most successful ‘green economy’, and with the emergence of interesting quangos like the Green Fiscal Commission, reportedly looking at environmental tax reform, it behoves the timber sector rapidly to enhance green credentials right across its daily operations.