James Stacey joined Standard Chartered Bank in 2006 with over 15 years experience as a sustainability and environmental professional. He is Head of Sustainable Business, responsible for environment and climate change strategy, integrating environment into operations, including sustainable lending. He was previously a partner in a leading international environment and sustainability consultancy and head of KPMG's Sustainability Advisory Services practice. James's consultancy roles provided environment and sustainability related strategy, implementation and merger and acquisition advisory services to a range of corporate, private equity and debt finance clients.

What was the trigger to the introduction of Standard Chartered's carbon reduction initiatives?

"Standard Chartered has been undertaking action on environment and climate change for many years. The Bank first started measuring, reporting and reducing the environmental impacts of its operational activities in 2001, has had an Environment and Social Lending Policy governing all forms of lending worldwide for over 10 years and adopted [industry framework] the Equator Principles, a set of social and environmental standards for Project and Export Finance in 2003.

"In 2006 we consulted over 60 different stakeholder groups to explore what they thought building a sustainable business meant. This confirmed our views that Environmental Protection and Sustainable Lending are key elements. Following the consultation we updated our Building a Sustainable Business strategy and our Environment and Climate Change Strategy, which encompasses both Environmental Protection and Sustainable Lending."

What are your proudest low carbon achievements?

"Standard Chartered has developed a holistic Environment and Climate Change Strategy, including reducing the Bank's operational impacts; being a 'force for good' through integrating environment and social issues into the lending process; developing new products and services which commercially facilitate the shift to low pollution economies; and engaging employees, customers and communities and governments. This creates the right investment conditions to be able to finance environmental protection.

"Two significant achievements which form part of this strategy include Standard Chartered's Clinton Global Initiative commitment announced in 2007, to take a leading role in the financing of $8-10 billion of new renewable and clean energy projects in Asia, Africa and the Middle East over the next five years. Delivering on the commitment will enable many of the Bank's markets to scale up their renewable energy capacity, the Bank to play a significant role in combating climate change and position the Bank with early mover advantage in the sector.

"Secondly, as part of the Bank's 'Greatest race on earth' marathon series, our 'Race for a living planet' (http://www.thegreatestrace.com) has sought to raise awareness of the importance of environmental protection among employees, customers and communities. Launched in 2007 with WWF, individuals are encouraged to pledge to change things in their lives to benefit the environment and choose a country to support with their pledge. The three countries which receive the most pledges will share a $1 million donation to WWF, for conservation projects in those countries.

"The campaign has received over 1 million pledges delivering potential environmental savings equivalent to 2.5 billion litres of water and 38,000 tonnes of CO2 - demonstrating that small changes by many people make a worthwhile difference. The campaign website is home to an international carbon calculator for estimating personal carbon footprints and 'My environment,' an interactive 'tour' of a person's everyday life, full of ideas on how to reduce environmental impact."

What are the biggest challenges you face?

"Standard Chartered employs more than 70,000 people across over 70 different countries, in Asia, Africa and the Middle East. 'Environment' means very different things: drought, flood, air pollution, extreme weather to mention a few. Implementing a Group strategy across a diverse business means we have to be careful to ensure that what we do and say is meaningful and relevant to all of our markets."

How do you deal with these challenges?

"Firstly, one of the three guiding principles the Environment and Climate Change Strategy must meet, is that everything we do should be meaningful and relevant to our markets. This means all strategic objectives include consideration of this important issue.

"Secondly, we have established a management framework which reflects our diverse nature. At the group level we have a Group Environment Committee which sets the strategy for the business. The Committee comprises senior representation from our Wholesale and Consumer Banking businesses and key functions, such as Real Estate, Technology and Operations, Risk and Corporate Affairs.

"We have also established Country Environment Committees in all markets. They are responsible for implementing the Group strategy in a way which resonates with people in that country."

What are the biggest environmental challenges banks face?

"Banks have a significant role to play in the transition towards a low pollution, low carbon future, through financing the technologies which will bring about this change. Banks are demonstrating a strong appetite to take on this role. However, many of the technologies require market interventions to make them commercially viable and bankable. The renewable energy business is largely a regulation-driven market and without the right regulatory support, banks cannot finance technologies on a commercial basis. The carbon market is in a very similar position.

"Standard Chartered advocates the importance of government action across the world in creating market conditions necessary for banks to play a meaningful and scaleable role in financing future technologies. As part of the Chairman of Standard Chartered's membership in the Corporate Leaders Group (CLG) on Climate Change, an industry group working with governments to promote climate change regulation, the Bank was a signatory to the Bali Communiqué. This called for an international and legally-binding UN agreement to reduce greenhouse gas emissions.

"As part of the Group's membership of the United Nations' Environment Program Finance Initiative (UNEP FI), we signed its Declaration on Climate Change ahead of the G8 Summit in June 2007. Integration of environment and climate change into our discussions with governments worldwide is a key element of our Group strategy."

What would you advise someone taking on a role similar to yours?

"A group-wide role on environment and climate change typically means you have responsibility for delivering action across the business and potentially across a huge geographical range, often in areas where you do not have decision making control. It is therefore critically important you determine how you will deal with this challenge.

"The approach needs to be company specific. There isn't a 'one size fits all' solution. If there is strong leadership from the Group CEO, a senior decision making body driving strategy and clear accountabilities on relevant parts of the business to deliver the strategy, including on the ground action in all countries, this will significantly help efficacy in delivering Group wide action."

Board Report

Motivated Staff Make Lighter Footprints

Companies making a serious effort to reduce their carbon emissions must engage staff at all levels of the business if they are to be successful. This will take time, thought and effort, so it's important to be clear about why a programme of staff engagement is necessary, and how it can be achieved.

The most obvious reason for engagement is that employees make a significant contribution to the overall carbon footprint of an organisation, yet it appears that companies have only begun to address this. Research carried out in the summer of 2007 by the Chartered Institute of Personnel and Development (CIPD) found that although many companies have drafted environmental policies for employees, or are doing so, their scope is limited.

A call for action on transport

Across all sectors almost a half of CIPD member organisations have environmental policies, with those involved in manufacturing and production taking a clear lead. When asked for more detail it emerged that 91% encourage staff to recycle, 83% encourage reduced energy consumption, and 69% encourage the use of recycled products. Some 42% educate or train employees in environmentally sound business practices, while just 8% reward "green behaviour" with financial incentives, or awards or recognition.

CIPD argues that the biggest area for improvement is transport policy, both for business travel and routine commuting to and from work. Senior managers have a particularly important role to play here because they provide the lead on what is expected in an organisation, notes CIPD. "The fact that only 37% of survey respondents think that this lead is present might therefore serve as a rallying call for greater action in boardrooms across the country," it says.

Engaging staff is also essential if a company's carbon footprint is to be estimated accurately: employees have a crucial role in supplying the raw data. Yet few businesses seem to be aware of the contribution to emissions made by the daily commute of their employees. It may be that policymakers hesitate to extend their reach beyond company premises because to do so might seem intrusive, or be ineffective.

From 'command and control' to staff engagement

But this is why engaging with staff - as opposed to simply mandating changes in behaviour - is so important. Reasons for thinking this can be achieved are provided by the experience of World Resources Institute (WRI), a US-based think tank. Committed to reducing emissions across a workforce of 140, WRI chose to collect commuting data via questionnaires in a spreadsheet format. After two years a 48% participation rate had been achieved. By moving to a simpler web-based interface participation rose to 65%, and after further work to reduce the time needed to complete the survey to less than one minute, employee participation rose to 88%.

"A lot of companies have environmental policies, but they struggle to bring them to life,"

The importance of making it easy for staff to participate shouldn't be underestimated. Many companies have some form of e-HR in place - or something as simple as a "notice board" seen by all employees when they log in to the company intranet - and this could be the natural home of such a questionnaire.

Management culture may also be a barrier to tackling transport more effectively. When CIPD asked its members about green transport policies specifically, 70% agreed there was scope for reducing staff travel, and 49% agreed their organisation encourages alternatives to physical meetings such as videoconferencing. Interestingly, of all the available options homeworking was ranked lowest by respondents, with just 30% agreeing their organisation encourages this. "This may be due to the fact that homeworking is more suited to some sectors and occupations than others, though the low overall incidence suggests scope for improvement," says CIPD.

All companies need to attract and retain the best staff possible, and here a company's reputation on environmental issues will become increasingly important. CIPD research reveals that 47% of human resources professionals think that employees prefer to work for an organisation with a strong environment policy, while 46% think that potential recruits would prefer to join an organisation with a strong environment policy, and 39% agree that an environment policy is a more important recruitment and retention tool for younger workers.

Drawing strength from partnerships

Many companies will not have the expertise needed to engage and educate their staff in-house, and so it makes sense to consider a partnership with an organisation that does. A good example of how this can work to the benefit of all parties is provided by environmental charity Earthwatch.

The charity, which has partnerships with HSBC, Barclays, Shell, and Mitsubishi among others, says this helps to provide a context for the environmental policies, and show why they are important. "A lot of companies have environmental policies, but they struggle to bring them to life," says Jenny Cox, Employee Engagement Manager at Earthwatch. Increasingly the charity is focused on helping employees who volunteer with Earthwatch to become "climate champions", so their involvement doesn't end when they return to work, she says.

It's important to offer staff a range of options for involvement, suggests Tom Burstow, who heads the charity's Global HSBC Programme. Earthwatch helped form the HSBC Climate Partnership in 2007, a five year $100 million programme based around a "learning journey" that includes online tools, volunteering projects, and a climate change research programme.

The journey to an action plan

As part of this, HSBC's global workforce of 300,000 will have access to online learning facilities; an estimated 25,000 staff will take part in volunteering projects; and a further 2,000 will join Earthwatch scientists on forest research projects to gather critical climate change data, says Burstow.

Not all companies will be able to contemplate this level of commitment, but the basic ingredients can be used on a smaller scale, he suggests. "Online modules can help staff learn about the impact of climate change, and later to showcase and share best practice, or to build informal networks. Volunteering, even if it's one day on a local project, helps to give a broader context, and going back to work with an action plan means that employees can still feel involved. They come back equipped, motivated and ready to act," he says.

Helping volunteers draw up action plans for the workplace is an increasingly important part of Earthwatch's work, says Burstow. "It's about helping people become climate champions in their business. Rather than just for philanthropic reasons, there's a recognition that involvement can have an impact on business processes," he says.

Key questions:
· What are we doing to communicate our low carbon strategy to all staff?
· What contribution do transport policies make to our strategy?
· How are we helping our staff become carbon reduction champions?