ABSTRACT
Companies cannot treat carbon emissions as externalities any longer nor can they leave the solution to governments. This chapter discusses the strategic benefits of corporate carbon and climate strategies. Companies' strategies can focus on different angles, such as substituting its required inputs, optimizing the throughput system, and the carbon-efficiency of its outputs. The corporate contribution to climate change was not considered a strategic issue and emissions of greenhouse gases were taken for granted. Earth Summits and various international treaties have shaped the political landscape and intensified the discussion about sustainable development and climate change. Strategic management of carbon issues will require long-term investments, which will add new metrics to measure the sustainability of investments beyond the commonly used financial metrics such as return on investment and net present value analysis. These new metrics can follow three complementary strategies: efficiency strategy; consistency strategy; and sufficiency strategy.
