Another year of small steps, with the promise of true sustainability still distant. But frustration with the slow pace of change is growing
International talks on the future habitability of the planet have become mundane. Since the failure in Copenhagen in 2009 to agree a new deal to curb global warming, annual UN climate summits have struggled even to get meaningful mass-media attention, despite the fundamental importance of the issue for future economic wellbeing.
The 2013 Conference of the Parties to the UN Framework Convention on Climate Change (COP19) continued the low-key pattern. However, the event, held in Warsaw, Poland, November 11-22, was marked by two incidents that seemed to summarise feelings about the way discussions are going.
First, the lead negotiator from the Philippines, Naderev Saño, made an emotional call for action in the light of his country’s – and his family’s – experience of Typhoon Haiyan, which swept across the Philippines shortly before COP19, killing more than 5,000 people. Haiyan was a sign of things to come, Saño said, and the world should “stop this madness” of rising emissions. Saño caught the media’s attention by going on a symbolic hunger strike for the duration of the conference.
Then, on the conference’s penultimate day, civil society and trade union representatives decided they had had enough and walked out. Their main complaint was the bogged-down nature of the talks, caused in part, the NGOs said, by fossil-fuel industry lobbying. Warsaw, according to a statement from WWF, was “on track to deliver virtually nothing”.
The incidents symbolised the broader frustration that was felt in 2013 about the lack of progress on genuine sustainability – with climate change as the headline issue. Kathee Rebernak, founder and chief executive of sustainability consultancy Framework LLC, says the “undeniable effects of climate change” are increasingly “contrasted with the continued inability by international bodies to enact a globally, politically and practically viable and equitable approach to addressing them”.
The result, says Rebernak, is a “collective global shrug that signals a fatalism and a lack of confidence in humankind’s ability to come together”. During 2013, there was “little progress on implementing global solutions to global problems”.
Who’s to blame?
The blame for the impasse in 2013 was laid squarely at the door of politicians, who are seen as being unable to break free from bad habits and create a new, more sustainable framework for business and society. Rory Sullivan, senior research fellow for the Centre for Climate Change Economics and Policy at Leeds University, says 2013 “will be seen as a year of blatant political opportunism, emphasised by the cynical way in which governments have used the economic downturn to jettison so many of their sustainability commitments”.
Among the bad guys during 2013 were Australia and Japan. A new Australian government said the country would limit its 2020 emissions reduction target to 5% compared with 1990, having previously said a cut of up to 25% would be considered. Japan, facing a post-Fukushima nuclear shutdown, abandoned a 25% reduction target for 2020 compared with 1990 for a 3.8% cut compared to 2005, equating to a 3% rise over 1990.
Elsewhere, politicians dithered over the fundamental questions of environmental sustainability, measures to encourage green growth and their implications for current energy prices and business competitiveness. The UK prime minister, David Cameron, reportedly said he wanted to “get rid of green crap”, meaning energy levies that are used to fund renewable energy and other environmental and social measures.
At the same time, his government’s secretary of state for energy and climate change, Ed Davey, was leading a push for higher European Union emission reduction targets. Davey was a prime mover behind a so-called “Ministerial Green Growth Group” involving 13 EU countries that went to Brussels in October to call for the bloc to agree “urgently” on emissions reduction targets for 2030 and a reform of the main EU climate policy tool, the emissions trading system.
In contrast to Cameron’s “green crap” remarks, Davey said the EU should take “ambitious” action on emissions – a 40% reduction by 2030 compared with 1990 has been floated – adding that “only then will investors have the confidence to put the billions into low carbon that we need”.
Europe is split on how far to go on cutting emissions, with countries such as Poland keen to put the brakes on to protect its coal-dependent economy. A long intra-European discussion on climate and energy will ensue in 2014. While Europe talks, decisiveness has been left to other governments.
In particular, 2013 saw increasingly strong measures introduced in China to limit the environmental side effects of its economic growth. In June, China’s southern powerhouse, the city of Shenzhen, started the country’s first emissions trading system, followed by Shanghai in November. The scheme has been criticised as too lenient on participating companies, but it will be reinforced progressively on the way to a national Chinese ETS, which should start during the 13th five-year-plan period 2016-2020.
Chinese politicians are able to say things about the country’s push towards greater sustainability that no European politician would dare to utter. Speaking to Bloomberg, the vice-mayor of Shenzhen, Tang Jie, said: “We need to phase out that highly polluting, dirty production capacity. We want to push them to pay for their carbon emissions. We want to kick them out of the market.”
Trying to take a lead
In the absence of great leaps forward in 2013, it was left to companies and civil society to plot a path towards a more sustainable and fairer world – and a number of notable initiatives did move ahead. Dax Lovegrove, head of business and industry relations for WWF, says that despite an “absolute lack of leadership in the political sphere, in the private sector there are business leaders that are trying to make a move in the right direction”.
Many major companies got squarely behind Davey’s push for deep EU 2030 emissions cuts, for example. Through the Prince of Wales EU Corporate Leaders Group, companies such as Aviva, Johnson & Johnson, Kingfisher, Philips, Skanska, Tesco, Unilever and Vodafone called for a more robust EU climate policy that will “indicate the real cost of inaction, while also showing the benefits of a low-carbon economy in creating jobs, increased innovation and competitiveness”.
There were also significant strides on sustainability reporting frameworks during 2013. The Global Reporting Initiative published its G4 revision, and the International Integrated Reporting Council (IIRC) published its consultation draft, ahead of the planned publication of the International Integrated Reporting Framework in December 2013.
In the US, the Sustainability Accounting Standards Board (SASB) published finalised standards for healthcare sectors, and provisional standards for financial sectors. SASB standards identify and rate sustainability issues on a sector-by-sector basis, and are designed to help companies identify sustainability-related risks in their filings to the US Securities and Exchange Commission.
Corporate responsibility adviser Judy Kuszewski says the impact of the standards will have to be judged over time. “The accountability landscape has altered through G4, IR and SASB, but no one is quite sure how yet,” she says.
Framework LLC’s Kathee Rebernak says the G4 launch, in May 2013, was a positive development “not necessarily because it’s the best approach or the only approach, but because of the discussion and debate it engendered”. She adds that G4 has “reopened the debate on what a company should disclose and in what way”. But the outcome is “potentially ambiguous: whether companies will adopt or turn away from the standard”.
Demand for reporting frameworks is likely to increase because of a number of government initiatives during 2013 obliging companies to disclose more. UK requirements for public companies to disclose their carbon emissions became applicable from October 2013, and the European commission, the EU’s executive arm, proposed in April 2013 that European firms with 500 or more employees should have to report on their social and environmental performance or explain why they were not doing so. That proposal will move forward in 2014.
A growing divide
As the sustainability stakes rose in 2013, issues such as the take-up of sustainability reporting symbolised the increasing divide between companies: those that are, or are trying to be, part of the solution, and those that are part of the problem.
Kuszewski says: “Retail and FMCG companies have established sustainability, to some degree, as mainstream, and it’s starting to be picked up further throughout the chain.” But, she adds: “Energy companies of all stripes are real villains – craven messages in some places undermine the sustainability agenda they espouse in others, with no real long-term sustainability agenda.”
The divide became apparent in late 2013 when a research paper published in the journal Climatic Change calculated that two-thirds of industrial emissions pumped into the atmosphere between 1751 and 2010 had been supplied by just 90 companies, which also accounted for half of the greenhouse gases emitted since 1986.
The single biggest contributors, according to the study, were Chinese and USSR government entities producing fossil fuels and cement. Among private companies, the greatest emitters are Chevron, Texaco, ExxonMobil and BP.
These companies were put increasingly under the spotlight in 2013 by an emerging campaign to encourage investors to divest themselves from fossil-fuel stocks. The campaign has been centred on reporting by Carbon Tracker, a non-profit group that has analysed fossil-fuel reserves owned by companies and says that 80% is unexploitable because of global warming, meaning that those companies hold large portfolios of redundant assets.
James Leaton of Carbon Tracker says the analysis identifying 90 companies as the key contributors to emissions is “useful in terms of demonstrating that there is a clear impact of the corporate decision-making process”.
The fossil-fuel companies are feeling the pressure. In October, spurred on by Carbon Tracker’s analyses, the Ceres sustainability investor group whose members manage $3tn in assets, started what it called the “the first-ever coordinated effort” to get major emitters to assess the risks to their business plans posed by climate change.
Ceres wrote to 45 companies asking for responses ahead of the 2014 annual shareholder meetings season. Leaton says: “The companies are now considering what their response will be. They recognise that it is a valid question to ask. They’re aware that they have to articulate how they’re responding to it.”
In this sense, 2013 could be said to be the year in which clear battle lines were drawn between those that are on the side of sustainability, and those that are not, with the latter needing to find very good reasons to continue with business as usual.
Dax Lovegrove of WWF says the “net positive movement is growing”. Companies such as Ikea, Kingfisher and O2 are looking at “how business can have positive inputs and get beyond damage control”. The battle is between these and companies that are “stuck on a dinosaur business model that presents a huge risk to them. The energy-intensive sectors are under pressure from all sides.”
An increase in the pressure might eventually allow the world to break the impasse that is holding back progress towards sustainability, but if 2013 showed one thing it is that the battle is also against time. “I am generally optimistic,” Lovegrove says. “We are seeing some really good glimpses of future, innovative business models. The main challenge is moving with more pace.”
One of the most significant corporate responsibility initiatives in 2013 was the creation of the Accord on Fire and Building Safety in Bangladesh. Unfortunately, it took a major tragedy to make it happen.
On April 24 2013 the Rana Plaza building, an eight-storey construction subdivided into clothing factories, collapsed, killing more than 1,100 workers. The catastrophe could have been prevented – large cracks were seen in the building support pillars the previous day – but factory owners ignored the warnings. The disaster followed other major accidents in Bangladesh, such as the 2012 Tazreen factory fire, which killed about 120 workers.
In the wake of the collapse, the IndustriALL and UNI global unions argued that western brands needed to go beyond occasional safety audits of their suppliers – brands such as Benetton, Mango and Primark were supplied from Rana Plaza. Instead, the unions said, brands needed to enter into industrial relations with workers and give workers a voice.
The resulting accord binds brands to fulfil certain obligations. Signatories provide financial support to safety inspections and, if issues are identified that lead to factories having to be closed, agree to subsidise worker wages until repairs can be made. The accord lasts until 2018, and signatories commit to doing business in Bangladesh until then, as part of a concerted effort to raise safety standards.
By the end of 2013, the accord had approaching 120 signatories, including major names such as Adidas, C&A, Puma, Marks & Spencer and Tesco.
Sean Ansett, founder of sustainability consultants At Stake Advisors, says it is one of the major achievements of 2013. And, Ansett stresses, Jyrki Raina, the general-secretary of IndustriALL, should be considered one of the people of the year for putting it in place.emissions environmental sustainability global warming social change sustainability
May 2014, London, UK
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