Private sector initiatives have the power to deliver the emissions cuts promised at Paris, a major conference in London heard
Business will be key to unlocking the deep cuts in CO2 emissions needed to avoid catastrophic climate change, delegates to the Business and Climate Summit in London heard last month.
The two-day summit at London’s Guildhall, the first major global business and climate event since the COP21 in Paris last December, was convened by a network of partners including The International Chamber of Commerce, the World Business Council for Sustainable Development, the We Mean Business Coalition, CDP, the Climate Group and the Consumer Goods Forum.
The first day of the conference saw the launch of research by New Climate Institute, "The Business End of Climate Change”, showing that if five initiatives to address Climate change (Science-Based Targets, EP100, RE100, zero deforestation and the Low Carbon Technology Partnership Initiative) met their targets for recruiting businesses, they would cut emissions by 3.2-4.2bn tonnes of CO2 equivalent a year by 2030, 60% of all the emissions cuts pledged by countries at the Paris climate summit in December.
Yet it said the potential was much higher, at 10bn tonnes. If governments were to put the right policy frameworks in place the number of companies signed up to the initiatives would grow from 300 currently to 4,500, the report said.
Paul Simpson, chief executive of CDP, told the conference the mid-range 3.7bn tonnes estimate was the “business intended contribution” to fighting climate change, a riff on the “intended nationally determined contribution” (INDC) each government pledged ahead of last year’s COP21 meeting in Paris. “We think business can do a lot more,” Simpson said. “But for that to happen we need more policy incentives, the removal of fossil fuel subsidies and carbon pricing.”
IKEA Group’s chief sustainability officer, Steve Howard, one of the driving forces in the We Mean Business coalition, said companies and governments have to “go all in” if the world is to beat climate change. “You can’t defend the 20th century while building the 21st century,” he said. “You have to be really clear about the direction of travel and use all the policy signals, all the support for R&D and get really behind the carbon-free agenda. If governments can do that, business can unlock opportunities like we’ve never seen before.”
IKEA Group helped get RE100 off the ground, one of 68 companies to commit to go 100% renewable, and is already energy-independent in its Nordic operations, powered by wind and solar. It is also one of 172 companies that have signed up to the Science-Based Targets initiative, aligning their greenhouse gas emissions reduction plans with what science says will be required to keep temperature increases below 2 degrees. “Since May last year we’ve had two companies a week commit to science-based targets,” Simpson said. “We think it can easily be 2,000.”
Howard said the science-based targets approach was important. “It shows you that it’s not just about counting carbon but understanding how fast you’ll have to reduce it. You need to really understand where every tonne of carbon in your business and value chain comes from, and then start the process of understanding how do you take it out.” He added: “I’m a big fan of 100% targets. If you set a 50% target then everyone is confused, whereas if you say its 100% you stop all investment and development activities in the historical products and services and put all of your efforts into building for the future.” Laurence Tubiana, special representative for COP21 for the French government, said that if companies wanted to engage with government on climate change they had to be transparent and accountable about their own operations. “And they have to switch from lobbying to advocacy and cooperation. That is the best response that business can do.”
One point made by many speakers was that while Paris was a breakthrough for climate diplomacy, the outcome of this year’s COP22 meeting in November in Marrakesh, Morocco, will be critical in determining whether the fine words in the Paris Agreement are turned into action. Felipe Calderón, former president of Mexico and chair of the Global Commission on the Economy and Climate, said: “Now is the time to get the job done and move from ambition to action. Hundreds of companies are using internal carbon pricing but we need to make it universal. We need to reformulate property taxes and remove subsidies for fossil fuels. We have to invest in deployment for existing clean technologies and innovation to bring down the cost.”
Vidar Helgesen, Norway’s minister of climate and the environment, said business had a big role to play in supporting government low-carbon policy initiatives, particularly at a time when politicians around the globe are “facing reactionary forces” domestically – a possible reference to the UK referendum vote the previous week and Donald Trump’s ascendency in the US. “We need public-private partnerships at a massively larger scale than today. And carbon pricing is an incredibly important part of that.”
The role of the financial markets was seen by many speakers as critical. António Simões, chief executive officer of HSBC Bank, said the private sector would need to invest $5tn a year for the next 15 years to shift to a low-carbon global economy, the majority of it in infrastructure in emerging markets. “To unlock those trillions we have to move quickly from niche [investment] products to mainstream, from green bonds for certain projects to all bonds being green.”
Simões said that at a recent meeting of 35 CEOs in Paris, invited by the French government to discuss progress since the Paris Agreement, much of the discussion was about the finer details of implementing a carbon price. “That would have been unthinkable six months ago… That has given me hope,” he said. “There’s a sense of urgency and recognition [among business leaders] that we are in a race against time to deliver what we promised in Paris.”emissions sustainable development sustainability climate change deforestation transparency accountability Environment