The New Business Climate

The New Business Climate is a 2002 guide by the Rocky Mountain Institute (RMI) designed to help corporations and institutions reduce carbon emissions while improving business performance. It argues that climate change presents both risks to asset values and opportunities for innovation, advocating for a transition from incremental thinking to radical resource efficiency and the use of emerging carbon markets to manage costs.

• Proactive 'early action' to reduce emissions allows companies to influence future regulatory structures in favor of flexible, market-based regulations rather than rigid command-and-control regimes.
• Companies can reduce costs by integrating aggressive energy efficiency improvements into routine facility upgrades and equipment replacements, rather than treating them as separate, expensive projects.
• The implementation of an emission accounting, measurement, and tracking system is a critical first step for any corporate carbon strategy, providing the data necessary to set targets and identify cost-effective investments.
• A 'no-regrets' strategy focuses on energy efficiency measures that are economically justifiable on their own, often providing returns that exceed traditional hurdle rates if evaluated beyond simple payback periods.
• Radical resource efficiency, aiming for 75–90 percent improvements, is achieved by applying 'whole-systems thinking' early in the design process to optimize the entire system rather than sub-optimizing individual components.
• Distributed generation (DG) using small turbines or fuel cells can provide high-reliability power and heat, reducing GHG emissions compared to centralized power generation.
• The 'status quo' of relying on carbon-intensive plants and fossil-fueled energy systems is not risk-free, as it exposes firms to energy price volatility and potential last-minute compliance costs from future regulations.
• Internal carbon trading programs, as implemented by BP and Shell, allow large companies to identify the lowest-cost reduction measures across different business units and stimulate internal innovation.
• Carbon offsets can be used as a risk-mitigation tool; buying them early or using call options can hedge against the risk of price increases when emission limits become binding.
• Barriers to energy efficiency often include institutional structures, such as the separation of capital budgets (for investments) and operating budgets (where savings are realized), and a reliance on simple payback criteria.
• Performance contracting via Energy Service Companies (ESCos) provides a way to finance efficiency projects by using the actual energy savings to pay for the equipment and installation.
• A 'learning organization' culture that empowers employees to seek innovative solutions can create a competitive advantage and improve employee morale and retention.
• BP Amoco achieved its goal of a 10% reduction in emissions below 1990 levels eight years ahead of its 2010 target, doing so at a negative net cost (a profit).
• Dow Chemical's 'Waste Reduction Always Pays' (WRAP) initiative demonstrated that harvesting collective employee knowledge can lead to high returns on investment, with some projects averaging a 204 percent return per year between 1983 and 1993.
• Interface achieved 'Climate Neutral' certification for its Solenium carpet by combining solar energy, improved product design, and external offsets in schools in Portland, Oregon and Philadelphia, Pennsylvania.
• ABB focuses on the market for distributed power systems, investing in technologies like high-voltage direct current (HVDC) transmission to reduce energy loss and enable small-scale generation.

APA

Swisher, J., Parrot, K., Gage, P., Page, C., Wilkinson, R., & Payne, D. (2002). The New Business Climate. RMI. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_E02-17_NewBusinessClimate-.pdf

Chicago

Swisher, Joel, Kate Parrot, Peter Gage, Christina Page, Robert Wilkinson, and David Payne. The New Business Climate. RMI, 2002. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_E02-17_NewBusinessClimate-.pdf.

Wikipedia

{{cite report |last1=Swisher |first1=Joel |last2=Parrot |first2=Kate |last3=Gage |first3=Peter |last4=Page |first4=Christina |last5=Wilkinson |first5=Robert |last6=Payne |first6=David |title=The New Business Climate |publisher=RMI |date=2002 |url=https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_E02-17_NewBusinessClimate-.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{swisher2002new, author = {Swisher, Joel and Parrot, Kate and Gage, Peter and Page, Christina and Wilkinson, Robert and Payne, David}, title = {{The New Business Climate}}, institution = {RMI}, year = {2002}, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_E02-17_NewBusinessClimate-.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }