The Business End of Climate Change: How collective action could help us realise a 2C world
Big business is not waiting around to play its part in tackling climate change. By 2030, companies will have together slashed emissions by at least 3.7 billion metric tonnes of CO2 equivalent (mtCO2e) every year - and this figure could almost treble within a more ambitious policy environment.
That’s the conclusion of a major new report launched today (28 June) at the Business & Climate Summit in London, which puts a figure for the first time on the level of emissions cuts that could be achieved by businesses worldwide through collective action.
The Business End of Climate Change report, compiled by We Mean Business, the New Climate Institute and CDP, examines the extent of what can be achieved through business involvement in five key global business initiatives – the RE100; EP100; Science Based Targets; Zero De-forestation & the Low Carbon Technology Partnerships initiative (LCTPi).
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Over the past 12 months, 174 firms from across the world signed up to these five climate action initiatives, taking the total to around 300 firms. And that membership rate looks set to rocket over the coming years, with the researchers claiming that more than 3,500 businesses could be involved by 2030.
Commenting on the report’s findings, We Mean Business chief executive Nigel Topping said: “Businesses taking bold action on climate change are contributing significantly to placing the world on a below 2C trajectory. To fully realise this potential, we need to see three things happening...
“One: governments removing barriers and creating incentives that enable companies to be even more ambitious in their efforts to cut emissions. Two: leading companies already committed to significant climate action raising the ambition of their peers by demonstrating the scale of the economic opportunity. And three: businesses that are yet to commit should follow the strong lead of the companies who have already signed up to one or more of the We Mean Business commitments.”
With the success of the recent Paris Agreement based on an ambitious series of ‘intended nationally determined contributions’ (INDCs), today’s report investigates the 'business determined contributions' (BDCs) that will help realise that level of global ambition on climate change.
The current BDC to climate action – which stands at 3.7 billion mtCO2e a year - represents more than 60% of the total emissions cuts pledged by all countries in the Paris Agreement through the INDCs). And the potential BDC to climate action could be as high as 10 billion mtCO2e a year by 2030, with the right policy environment that supports all relevant companies signing up.
“As more businesses commit to action, they’ll make governments’ NDCs more attainable,” the report reads. “That, in turn, will make governments more ambitious when it comes to setting national targets. So the pledges businesses make now, coupled with a firm policy lead, can create a virtuous circle of action.
“That policy lead starts with consistency and clarity about objectives and the route to achieving them. The more governments do to set the tone, the more they’ll inspire confidence from businesses and investors and go a long way to bending the curve back below 2C.”
For businesses, CDP chief executive Paul Simpson believes there remains a great, largely-untapped opportunity to build resilience, innovate and safeguard future profitability. “The only way is up for business action on climate change,” said Simpson. “But we must not head into this future blind - disclosure of climate information will be essential to keep track of corporate progress, spur greater action and help business achieve its ambition.”
Green industrial revolution
The Paris Agreement was seen as a huge success for business-led climate action. In the build-up to the ambitious global deal being struck, almost every day of the two-week COP21 talks was headlined by a major business-led announcement that could have a profound impact on green investment and business prospects.
- On the first day of the talks: Bill Gates and his billionaire friends launched a multi-billion dollar initiative to fund new clean technologies.
- On day two: a coalition of big businesses including Unilever and M&S signed a new pledge aimed at tackling deforestation in supply chains.
- Day three: 27 businesses including GSK, Veolia and Diageo launched the Business Alliance for Water and Climate Change, which aims to reduce water risks and has already secured $1bn of investment.
- On day four: 18 countries and over 60 organisations formed a new Global Alliance for Buildings and Construction which aims to accelerate the move towards zero-carbon buildings.
- The fifth day: saw the launch of a new industry-led task force aimed at highlighting the financial exposure of companies to the risk of climate change
- Over the first weekend: we then saw the talks clear a major hurdle with the draft text drawn up, and Richard Branson’s B Team of chief executives urged governments to push for target to be “carbon-neutral by 2050”.
- Big energy pledges then hit the headlines on the final Monday: with six more companies joining RE100 and a new international trade body for the solar industry launched.
- And on the Tuesday: 114 global corporations including Coca-Cola, Sony and Procter & Gamble announced they would be adopting ‘science-based’ carbon emissions reduction targets.
Speaking of the Business End of Climate Change report at the Business & Climate Summit in London’s Guildhall this morning, Christiana Figueres - Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC) - said: “In the run up to COP21 in Paris, an extraordinary alliance of business and investors committed to ambitious actions via the dedicated NAZCA portal. I believe that you can truly say ‘we’re accelerating climate action’.
“But a universal climate agreement of nations also needs universal support from the private sector beyond Europe and North America. I would urge committed business to reach out to peers in Africa, Asia and Latin America in order to further seed, catalyse and build action everywhere and in support of COP22 in Marrakech.”