Climate change is a global environmental problem caused by the sharply rising level of greenhouse gas emissions resulting from fossil fuel combustion and other industrial activities. Since carbon dioxide is the major greenhouse gas, "carbon" has become the common currency to describe all greenhouse gases.

International climate change policies, such as the Kyoto protocol and the EU emissions trading scheme, which came into force in 2005, send clear signals to business that there will be ongoing pressure to reduce carbon emissions. Energy prices are also rising, adding further pressure to reduce emissions. Against this background of targets and rising costs, an increasing number of businesses are realising that a strategic approach is required.

Carbon management means systematically reducing an organisation’s emissions through energy efficiency, low carbon technologies (such as CHP and renewable energy systems), low energy buildings, more sustainable transport schemes and improved management systems. For companies with mandatory targets under the EU ETS, emissions trading offers the flexibility to meet a shortfall on the target or to sell an excess reduction. For organisations reducing emissions voluntarily, carbon offsets provide a means to become carbon neutral. These measures should form part of a coherent strategy to reduce emissions, over time, from an established baseline to an agreed target level. The systematic approach means that the emissions abatement costs (£/tonneCO₂) for the different options can be compared.

The carbon management strategy can thus be aligned with other strategic business drivers and demands on capital, such as the development of new products, services and markets, corporate governance and social responsibility, and of course profitability, both in the long and short term.

ESD provides expertise to support the development of organisation-wide carbon management strategies, through to the design of site-specific emissions reduction projects. In this way, ESD helps businesses to transform their carbon liabilities into financial, environmental and social assets, supporting the transition to a low carbon economy.