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The Three Ways to a Low-Carbon Business

Much of the press around President George W. Bush's most recent address on climate change has been dismissive (though there were also interesting approaches like the Annotated climate speech on the New York Times Web site). McKinsey, however, used it as a call to action for business. It posted (free to guests on the McKinsey Quarterly's site until April 23rd, then, registration required) Business strategies for climate change, arguing that "the shift to a low-carbon economy is already under way and that business must get ready for it, especially in energy, transport, and heavy industry--the heart of today's carbon-intensive economy--and in many other industries as well."

Perhaps most important, McKinsey says it doesn't matter if you believe in the science of global warming -- perception is reality, and business leaders must respond to that perception. That means getting ready for a shift that could be as big as the move from manual labor to factory production.

Businesses need to respond in three ways:

1 -- optimize energy efficiency of what you have
2 -- develop new low-carbon, low-emission technologies
3 -- public policy -- regulation -- is driving this disruption, a first. Have a public policy strategy.

Businesses must be strong in all three, and they must start now. McKinsey says that while climate change is often talked about in context of decades, businesses have three years, five at most, to develop low-carbon strategies.

They must also be prepared for a huge wave of assault from what McKinsey calls "low-carbon attackers, unencumbered by legacy assets, that will help write the new rules of the game."

I'd love to hear from readers whether you agree that you need a low-carbon strategy, and you need it now.

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