Prince Charles: Sustainable business leadership alone won't combat climate change
While congratulating companies to have been named the most sustainable in the world, the Prince of Wales has warned that more must be done to deliver the global low-carbon transition in line with the Paris Agreement's 1.5C trajectory.
Speaking at the launch of Corporate Knights’ 2021 Global 100 Index, which ranks the 100 most sustainable large businesses in the world, the Prince acknowledged that the listed businesses are “helping to move the world onto a more sustainable trajectory while leading by example”.
In creating the Index, Corporate Knights accounts for the proportion of sales and revenues generated from products and services with net-positive social and environmental impacts, and the proportion of capital invested in dedicated sustainable projects, facilities and brands. It also considers whether businesses link executive pay to sustainability-related KPIs and whether they promote gender equality and workers’ rights.
Collectively, Index-listed firms drew 41% of sales in 2020 from sustainable products and services and allocated one-third of investments to dedicated sustainability activities.
Commenting on the Index launch, the Prince said: “This leadership is needed now, more than ever.
“In this regard, it is absolutely vital to focus on the fact that, at a global level, the sum of all the commitments made by countries to reduce emissions do not achieve the level of ambition needed for [2C].. let alone the 1.5C that climate science believes should be the maximum.
“Rather – and this is the problem – they deliver a 3.2C increase, which means mass extinction and large parts of the planet being uninhabitable by the end of this century.
“As I’ve been trying to say for more years than I can remember, what on Earth is the point of testing this world and nature to destruction? We simply have to pay attention to the UNEP’s estimation that the financing gap to achieve 1.5C is $2trn a year through to 2050. If we shift the momentum of the private sector and capital markets in line with net-zero, the volume of financing would be far greater than $2trn.”
The Prince noted that markets are beginning to change in this way, with “more businesses, investors, shareholders and consumers recognising the opportunity that a sustainable future affords”.
But he argued that this is a recent development – and one that is not universal across the global corporate space. He described his work on environmentalism over the past four decades as an “uphill battle” and argued that, in some sectors and geographies, this is still the case.
Messages to laggards
As his speech continued, the Prince sought to persuade companies that are lagging behind in the fight to tackle the climate and nature crises that inaction will be costly.
He said: “With millions of new jobs needed as part of the post-pandemic recovery process, sustainable businesses are among the best bets. A recent study in the Oxford Review of Economic Policy indicated that investments in these enterprises produced three times as many new jobs as investments in, for instance, fossil fuels.
“A sustainable future is, in fact, the growth story of our time…. It is up to us to seize the opportunity it presents. As we strive to imagine the next centuries of human progress, prioritising the fundamental rights and value of nature will enable a step-change in… the future of our economic approach.
“The Covid-19 pandemic has shown us that it is possible to mobilise the necessary resources and accelerate the timelines for transformative progress. It has also shown us how vital health is to human and economic wellbeing. Therefore, for the sake of a safer and more sustainable future, let us join forces and waste no more time.
“Acceleration, investment, action and impact are all possible.”
The speech from the Prince was made to coincide with the World Economic Forum’s original dates for its 2021 meeting in Davos. The conference is postponed, and media outlets have reported that the Forum is weighing a May date with a location in Asia.
Prince Charles recently made headlines with the launch of a new earth charter for businesses. The Terra Carta commits signatory businesses to formally recognising that 2050 is the absolute cut-off point for setting net-zero targets and to going further and faster if possible. More broadly, it outlines ten areas of action for businesses looking to respond to the scale of the interconnected climate and nature crises and to shape a green recovery from the economic fallout of Covid-19.
Early signatories of the Terra Carta include AstraZeneca, Refinitiv, Heathrow Airport, EY, BP, Signify, Drax Group and Compass Group