“Climate Protection Becomes Relevant to Business”
Despite the war in Ukraine, climate protection remains on the agenda in Germany. What’s more, the German government is accelerating the expansion of renewable energies, and society is also keeping expectations high for companies. Dr. Axel Kölle explains in an interview which good business reasons there are for corporate climate protection. He is head of the Center for Sustainable Corporate Management (ZNU) at Witten/Herdecke University.
Mr. Kölle, corporate climate protection is still often seen as a cost factor. But isn’t it the case that it is now profitable?
A resounding yes! Corporate climate protection as part of a holistic approach to sustainability is worthwhile. Even more so in view of the overall political situation. Fossil energy prices are rising so rapidly that investing in energy-efficient processes and renewable energy sources now becomes profitable in an even shorter time span. The war in Ukraine is accelerating everything. It is remarkable how dynamic the demand for green technologies has become.
Whereas before renewable energy should come energy saving.
That is the be-all and end-all. That’s what we as ZNU are shouting out to the world. CO2 emissions which don’t happen are the best emissions. What’s more, energy efficiency is a highly attractive topic for companies. Because it not only protects the climate, but also saves costs. Climate protection and economic goals go hand in hand here.
On the market, we are seeing rapidly rising prices for offset certificates. This makes it more expensive for companies to offset emissions. Is the window of opportunity to improve your carbon footprint in this way closing?
The market for emissions certificates is a wild one. As with all comparatively young markets, it changes relatively quickly. For example, there is currently an increasing shake-out in allowances. Some companies bought large quantities of emission rights years ago. That was a smart move. However, some of the projects behind them, which bound these CO2 volumes, expired more than ten years ago. Recognition of these old certificates is becoming increasingly difficult. This is leading to a shortage on the market.
In principle, offset projects cannot be expanded indefinitely anyway. At some point, coal stoves in Africa will be replaced by electric ones. In other words, the certificate market is finite. What does that mean for prices?
It is absolutely clear that the price of certificates will continue to rise over the next few years. Especially, since there is another factor: in perspective, the emerging countries increasingly want to credit the offset projects to their own climate balance sheets and no longer sell them to the industrialized countries. You can imagine what that means: supply will then be even tighter. The three- to fourfold increase in prices over the past two years was just a harbinger of this. Everything is marching rapidly upwards.
If large corporations or retailers expect suppliers to protect the climate, and banks are increasingly paying attention to the issue when granting loans, then it’s no longer very voluntary.
These are developments that are indeed becoming more and more accentuated. Consumers are also paying more attention to climate-neutral products. For this reason, we at ZNU always advocate a joint approach and, in connection with this, a distribution of the costs on several shoulders. What’s more, the issue is also becoming increasingly relevant among employees and in job interviews, especially among the high potentials that companies are fighting over. Managing directors tell me: “It’s amazing how often the climate issue is now asked in job interviews.” Climate protection is becoming relevant to business.
About the interviewee and interviewer
Together with Dr. Christian Geßner, Dr. Axel Kölle is the founder and director of the ZNU – Center for Sustainable Corporate Management at the University of Witten/Herdecke. The center has developed the “ZNU Standard for Sustainable Business Management”, which is used by more than 100 companies. It also started the climate neutrality initiative “znu-goes-zero.de”.
The interview was conducted by Daniel Baumann. He is Editorial Director Green Transformation at dfv Mediengruppe. Under the “GREEN.WORKS” brand, dfv Mediengruppe has launched a long-term initiative for corporate climate protection.
