MOBILISING BUSINESS TO COMBAT CLIMATE CHANGE
Since the launch of the Global Compact, global CO2 emissions have increased by 46 per cent and global atmospheric CO2 levels are up 8 per cent. At present, the reality is that the world is not on target for a global temperature rise of only
2 degrees Celsius - and it will be impossible to change course without the active involvement of business.
CARING FOR CLIMATE: SETTING THE PATH FOR LOW-CARBON GROWTH
Caring for Climate was launched by UN Secretary-General Ban Ki-moon in 2007. It is an initiative by the Global Compact, UNEP and the UNFCCC secretariat, and is committed to advancing the role of business in addressing climate change. It
provides a framework for business leaders to advance practical solutions and help shape public policy and attitudes. The initiative has two goals:
1) inform the global climate change policy agenda through sharing successful practices; and
2) mobilise business to develop a strategy for energy efficiency and the transition to a low carbon economy.
Today, Caring for Climate is supported by over 400 companies and has become the world’s largest initiative for business leadership on climate change. Many of the most carbon intensive industries participate, but some sectors like Oil and Gas, Basic Materials and Transport remain underrepresented.
FROM DEFENCE TO OFFENCE
In the early 2000s, businesses regarded climate and environmental issues as purely regulatory questions. Today, businesses play a more active part in dealing with climate change, often moving faster than environmental standards and regulations.
Since its launch, Caring for Climate has responded by supporting
companies in improving practices on a range of issues.
Recent examples of guidance include ‘Adapting for a Green
Economy: Companies, Communities and Climate Change’
(2011), and ‘Are you aligning your emissions reduction targets
with climate science?’ (2014).
Caring for Climate has also helped with the streamlining of reporting. In the period between 2009 and 2014, the percentage of signatories that responded to the Carbon Disclosure Project rose from 28 per cent to 48 per cent. This illustrated the increased willingness of climate leaders to participate in a robust disclosure system.
Part of the objective is to incentivise signatories to undertake emission reduction efforts. A study by Deloitte shows that 33 large signatories have achieved a decrease in emissions of approximately 13 per cent from 2013, compared to 2007.
Their emissions are also at their lowest level since 2007.
Leading companies are shifting gear and are now more proactively developing solutions to climate change. There is a clear trend of companies increasing investment in renewable energy and technology. They are focusing on becoming more transparent and more consistent with regard to lobbying, and on setting carbon pricing and their own targets to meet the 2 degree climate change target.
GREEN MARKET GROWTH
While the international climate negotiations under the UNFCCC are progressing, the talks have not yet reached a much-needed international agreement on climate change. At a national level, climate legislation is rapidly developing (climate legislation has doubled since 200920) and is increasingly incentivising business to take action. But while we are closer to a consensus on what is required, much change is needed before regulation effectively supports a transition to a low carbon economy.
There have been positive signs with regard to the awareness of climate risks among financial markets. Investors are beginning to see the link between climate and financial risk, and increasingly require companies to disclose strategies for managing climate risks and costs. Recently, investors have started to fear the effect of stranded assets - investments that will become unusable if laws to curb emissions tighten even further. The recent fall in the share price of coal companies reflects this issue.
RESPONSIBLE ENGAGEMENT ON CLIMATE
Fifteen years ago there were few channels for constructive engagement between private sector companies and other stakeholders. This has changed as private sector companies seek to engage stakeholder groups more actively. Caring for Climate has played a significant role in this regard. Since 2013, the Caring for Climate Business Forum has been the official business–focused event at the international COP negotiations, allowing business, policy-makers and civil society to exchange
good practice and discuss climate policy.
The initiative has also developed pioneering resources on responsible engagement in climate policy, designed to help
businesses follow transparent guidelines when approaching government and elected bodies to discuss climate policy.
GREENER THOUGHTS AND MINDS
General awareness of climate issues was rising as early as 2000. However, there was a high level of disagreement concerning the most effective actions that should be taken to overcome the momentous challenges ahead.
Today, climate is on the minds of most international business leaders, and companies are looking more for win-win solutions on the climate and the economy as a whole. More than ever before, business is seen as the source of innovation
and solutions, as well as an advocate for climate policy. A new generation of climate-conscious managers are stepping into boardrooms, ready to strike a blow for the environment and to find meaningful solutions to combat climate change.
Caring for Climate has, through its various initiatives, been instrumental in shaping beliefs that companies can be a force for good. The initiative is gaining global recognition from other institutional and organisational frameworks, and is a significant driver of business engagement on climate globally.
2015 – THE MAKE OR BREAK YEAR?
In December 2015, world leaders will meet for the 21st round of COP negotiations and hopefully reach a global agreement on climate change. The outcome will greatly change the operating environment for companies, and their inclusion in the process is important for delivering results. Committing to the Caring for Climate initiative is the best way for business to participate in this process, and declare itself a provider of solutions rather than part of the problem.
CEOS SUPPORTING CARING FOR CLIMATE COMMIT TO:
- Reduce emissions, set targets, and report annual performance
- Devise a business strategy to approach climate risks and opportunities
- Engage with policymakers to encourage scaled-up climate action
- Work collaboratively with other enterprises to tackle climate change
- Become a climate-friendly business champion with stakeholders
business...It is an opportunity we must seize. I want to challenge you. I want to see you in the vanguard of an unprecedented effort to retool the global economy into one that is cleaner, greener and more sustainable.