Business Strategies for a Greening World
The environmental landscape is transforming before our eyes. Governments, companies, and customers all have a stake in this new greener world. Many see significant opportunities as governments ramp up new programs and regulations to support various green initiatives, but challenging questions still remain. What are the real business implications of words like “green” and “sustainable?” What do internal green initiatives mean for firm economics, for employees, and for attracting and retaining talent? How will companies find the appropriate balance among the sometimes competing demands of stakeholders, customers, suppliers, and regulators? What new business models will emerge to enable firms to take advantage of new sources of energy, innovative ways to manage resources, and increased demand by customers for green products (who often remain sensitive to the prices of those products)?
Oliver Wyman works with clients to navigate the green terrain and develop practical solutions that balance the various interests involved. We believe it’s critical to take an outside-in perspective that incorporates the voice of the customer, but we also focus on making the economics and the organization work when designing a green program or business.
The Oliver Wyman publications below address green concerns in particular industries, reflecting our deep expertise and experience effecting change in those industries, as well as issues that cut across industries. Also included are studies commissioned by public and private sector clients to help them to better understand how companies and customers are meeting the green challenge.
Business Strategies for a Greening World
Cross-Industry Insights
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Keeping the Lights On Sustainably: How Companies Can Reconcile the Competing Objectives of Energy Security
This report presents an analytical framework based on the four objectives of energy security (autonomy, reliability, affordability, and sustainability). By identifying the requirements of multiple risk-adjusted scenarios and the implications of the policy and technological options available, the key alignments and trade-offs within energy policy decisions can be better understood and communicated to all stakeholders.
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Overlapping State and Federal Climate Programs: Economic and Policy Considerations
An examination of the implications of overlapping federal and regional programs for both governments and industry. Will companies have to “pay twice” for each ton of emissions? Will the overall costs of meeting CO2 targets increase? What will the impacts be on potential federal and state auction revenues? This issue shows how economic analysis can help answer these and other policy questions.
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What Every Company Should Do to Prepare for a Mandatory U.S. Greenhouse Cap-and-Trade ProgramDr. David Harrison, Jr., James Johndrow This article shows how economic modeling can help companies clarify what is at stake as they prepare for mandatory climate change policies. What future climate change policies might be put into place? What could be the financial impact for companies? And given the possibility of a future policy, what should they do now?
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Popular Commitment to Protecting the Rainforests: Research Briefing for The Prince's Rainforests Project Steering GroupA summary of key findings from research conducted for The Prince’s Rainforests Project in April 2008 in the UK, U.S., Germany, and France. The research showed that people are informed about rainforests and their link to climate change; shocked by the rate of rainforest destruction; motivated to help fix the problem; looking for leadership to achieve it; and potentially willing to pay for it once they are engaged. Download > |
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HSBC Climate Confidence Monitor 2008
A survey of 12,000 people across 12 markets worldwide that reveals that consumers are looking for greater leadership on climate issues, for a focus by their governments on “big issue” direct actions such as increasing investment in renewable energy and halting deforestation, and a simple “fair sharing” of global emission reductions. The survey was designed and analysed by Lippincott and conducted for the HSBC Climate Partnership. Download > |
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Consumers, Brands and Climate Change: Helping Businesses to Focus 2008
Research with 1,000 people in each of the UK, U.S., and China confirms an increasingly receptive market interested in what companies are doing to tackle climate change and eager for them to do more. Consumers continue to be willing to give credit to perceived leaders from Big Retail and Big Energy in the UK, and Big Manufacturing in the U.S. and China – sectors that can all make a massive impact, directly or indirectly, on carbon emissions – if those brand leaders can demonstrate a meaningful stance on climate change.
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HSBC Climate Confidence Index 2007
This survey draws on a sample of 9,000 people across nine economies in four continents and uses an index that measures consumer attitudes on four core scales: concern, confidence, commitment, and optimism. Overall, developing economies show the greatest concern, commitment, and optimism, while developed economies show the greatest indifference, reluctance, and fatalism.
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Consumers, Brands and Climate Change: Helping Businesses to Focus, U.S. 2007Download > |
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Consumers, Brands and Climate Change: Helping Businesses to Focus, U.K. 2007
These country reports draw from consumer research conducted with 2,000 people in the U.S. and the UK in July 2007 and reveal that more people have actively selected a brand for its good environmental practices than have avoided a brand for its bad ones. While people still tend to focus their activities on “obvious” issues like reducing carbon emission and saving money on reduced energy use, the potential for brands to engage consumers in tackling climate change, for the mutual good of the brand, the consumer, and the planet, remains substantial.
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Brand Value at Risk from Climate ChangeThis 2005 report prepared for the Carbon Trust assesses, approximately but in quantitative financial terms, the brand value at risk for companies in different sectors as a result of their response to climate change issues. How much climate change becoming a mainstream consumer issue matters to companies will depend upon their sector. Download > |
Industry-Specific Insights
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Automotive CO2: Emission and EmotionChristian Kleinhans, Jan Dannenberg Most automotive manufacturers have reacted slowly, but not too slowly to the CO2 debate. Many now want to cover the whole spectrum of technological solutions with their vehicle programs. This brief argues that technical and economic risks need to be taken into account, and that CO2 reduction efforts must be embraced as cross-functional, strategic projects that are firmly rooted in organizational structures, processes, and top-level management support. Download > |
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Automotive Management Summary: Auto and Environment 2007
This management summary outlines the key findings of the 2007 report and includes six recommendations for the eco-management of automobile manufacturers. Climate change has changed purchasing behavior in Europe and the U.S., with environmental compatibility moving into the top five criteria for new car purchases for the first time. Download > |
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Financial Services Tilting at Windmills - Managing Uncertainty in Renewable Energy InvestmentsRoland Rechsteiner, Bob Kopech, Paul Kunkel There are few certainties in energy markets and for strategists, who work over time horizons measured in decades, the uncertainties around investment decisions are even greater. This white paper looks at the challenge of ensuring that a portfolio of energy assets will deliver value across many near- and long-term scenarios, while retaining the flexibility to shift with the underlying markets.
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Financial Services Climate Change: Risk and Opportunities for Global Financial Services
The capacity of financial institutions to hedge themselves and their customers against a range of business risks, develop new products to cater for changing demand, and invest in growing markets means the sector is inherently well placed to cope with most of the scenarios climate change might bring in the future. However, the ability of firms to create value from the opportunities and threats depends critically on how their leaders and managers anticipate and address the changing business environment. |
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Energy What's Your Strategy for the Electric Vehicle Market?This report examines the key market enablers now in development by many utility and non-utility executives, who have been encouraged by increased government interest in and public awareness of plug-in hybrid electric vehicles (PHEVs). To achieve a state where individual transportation is powered more and more by electricity, these key building blocks are critical, and many of htem fall squarely in the domain of electric utilities. Download > |
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Energy Valuing Fossil Fuel Generation Assets in a Green EconomyThis paper focuses on the quantitative assessment of key risks affecting the valuation of electricity generation assets and outlines the stochastic model NERA has developed to help investors gain insights into the critical valuation issues surrounding fossil fuel generation plants. Download > |
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Energy Listening to the Voice of the Efficiency CustomerPolitical and regulatory leaders are challenging utilities to increase efficiency “sales” to extraordinary heights and to do so at unheard-of growth rates. But where are those incisive studies of customers that will inform and produce winning branding, marketing, and selling strategies? And what specific strategies will stir customer demand in order to give utilities a solid chance to make their numbers? Listening to the voice of the efficiency customer, with provocative customer science, is not just vital but now overdue for the utility Best Efficiency Business (BEB). Download > |
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Energy The Three Laws of Energy Efficiency Economics and Consequences for Utility StrategistsFor expository purposes, this article distills the most consequential tendencies of energy efficiency programs into three fundamental “laws”: fractional adoption; the untrodden production curve; and confounding response. An understanding of these dynamics provides insights on how utilities might respond to the challenge of ratcheting and unprecedented expectations.
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Energy / Utilities Breaking from the Pack with a Best Efficiency Business
A select set of utilities will transform their typical panoply of efficiency programs into a focused business and develop what this report describes as a Best Efficiency Business (BEB). The utilities that take this large step, in addition to mitigating risks and thus preserving shareholder value, could conceivably create significant value. In particular, key constituencies, such as regulators and the financial markets, will accord more and enhanced options to build infrastructure and to acquire other companies. Demonstrated excellence in efficiency through a BEB may thereby be reflected in financial market multiples and valuations. Download > |
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Energy / Utilities The Real Point of Being a "Green" Distribution Utility
As this report illustrates, within the broad context of improved social responsibility and corporate citizenship, many utilities are undertaking major efforts to become green, particularly to reduce their carbon footprint. They’re motivated by changes in the regulatory landscape, customer sentiment and perception and, in fact, the effects of green initiatives on the bottom line. |
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Energy / Utilities Careful Strategic Moves for Green Energy Service Markets
With global warming and climate change becoming more prominent in the national political and economic debate, a number of “green mega-trends” have emerged that impact energy and utility companies. These range from aggressive environmental commitments by leading corporations, to increased state and local regulatory intervention mandating specific renewable and energy efficiency targets, to interest in voluntary carbon offset trading, to construction of green-certified buildings. Those firms that ignore powerful green mega-trends risk seeing value migrate to competitors. Download > |
