Corporate climate leadership
Georg Kell, Executive Director, United Nations Global Compact
27 November 2012 | Policy & Legislation, Europe, Middle East
While responsibility to drive climate change solutions that address the needs of the poorest and the most vulnerable rests primarily with governments, it has become increasingly clear that business will be an essential partner.
Climate change is no longer a distant threat, but has emerged in our time as a massive global challenge. Companies must prepare for and respond to the impacts of a changing climate and go even further to help build a global green economy.
Investing early in green growth can help buffer the impacts of climate changeand assist emerging economies and vulnerable communities to adapt to these impacts more effectively. Private sector investments that help vulnerable people and communities adapt to climate change impacts – particularly those that facilitate the efficient use of increasingly scarce resources, or help to renew and restore them – are becoming important drivers of the green economy.
There is growing recognition within the private sector that while climate change poses significant risks to operations and value chains, it also brings new opportunities to create business value while helping people adapt. Well-designed business responses to climate change can help build strong and healthy communities in which people and companies can thrive. Led by the UN Global Compact and the UN
Environment Programme in co-operation with the UN Framework Convention on Climate Change (UNFCCC), the Caring for Climate (C4C) initiative shows these signs of progress. Beyond recognising the risks and opportunities of climate change, signatories of the initiative commit to set goals, develop and expand strategies and practices, and publicly disclose emissions (http://www.caringforclimate.org).
As the world’s largest corporate climate leadership platform, Caring for Climate provides an action framework for companies to advance practical low-carbon solutions and help shape key UN goals and policies. Officially launched by UN Secretary-General Ban Ki-moon in July 2007 with an initial group of 30 endorsing companies, the initiative has grown to nearly 400 companies from 65 countries today. A large number of C4C signatories come from emerging economies, and participation by small and medium-sized enterprises comprises 27 per cent of total membership. Companies make five core commitments in support of the global green economy – ranging from reducing emissions and articulating climate strategies to working collaboratively with other enterprises (see box).
The five commitments of the Caring for Climate Statement
All signatories of the C4C initiative must endorse the Caring for Climate Statement, which includes five commitments to action:
1. Reduce emissions, set targets and report annual performance;
2. Devise a business strategy to approach climate risks and opportunities;
3. Engage with policy-makers to encourage scaled-up climate action;
4. Work collaboratively with other enterprises to tackle climate change;
5. Become a climate-friendly business champion with stakeholders.
According to the Caring for Climate progress report released in 2012, more than two-thirds of the initiative’s signatory base reduced their emissions intensity based on revenue. Twenty-five top performers were also identified for meeting all five commitment areas, thereby reducing more than 16 million tonnes of CO2 equivalents over the 2009 and 2010 reporting period. However, the Caring for Climate members who increased their revenues by 5.2 per cent between 2009 and 2010 also reported that their carbon footprint grew by 3.8 per cent over the same period.
While many Caring for Climate signatories have shown significant progress, for others the journey is just beginning. C4C signatories represent some of the most dedicated companies to addressing climate change and yet their recent environmental performance highlights the real challenges in decoupling carbon emissions from business growth. Although the data shows that many C4C signatories have made a concerted effort to address the climate challenge, there is clearly an opportunity to do more.
Becoming climate champions
While most businesses engaged on the climate challenge have focused their efforts on reducing greenhouse gas emissions, many of the initiative’s top performers are establishing themselves as climate champions within their organisations and in their broader spheres of influence. Based on a review of publicly available information reported by companies in 2011 to the Carbon Disclosure Project and Communications on Progress – Climate, more than a quarter of the 353 signatories have met all five commitments. Nearly two-thirds of total C4C signatories, most of which are large companies,have met three or more of the commitments agreed upon when joining the initiative.
Climate champions recognise the risks that climate change poses, not only for their operations, but also for suppliers, employees, customers and people living in the communities in which they operate. Businesses are beginning to recognise opportunities to expand operations and increase their market share through developing climate-resilient products and services to help communities, industry peers and governments adapt. Corporate climate leaders that rigorously assess climate change risks and opportunities and implement creative solutions for long-term resilience will create business value while making important contributions to sustainable development and equitable green growth.
Using technology to accelerate change
Substantial progress has been made by the private sector on climate change by implementing new technologies. Often a single technological innovation can significantly enhance theenergy efficiency of business processes, reduce the cost of a renewable technology, improve access to energy sources or help improve resilience to climate change. Certain technologies reduce impacts within a particular industry, while other innovations can enable other societal actors to meet the energy and climate challenge. Caring for Climate signatories are often at the forefront of these efforts by developing solutions that help all stakeholder groups adapt to climate change, and investing in the rollout of modern energy infrastructure and services.
On the renewable energy front, companies are creating organic photovoltaic solar panels that can be installed in unique locations such as the exterior walls of buildings and automobiles. They are developing more efficient wind turbines using reduced-weight, aerodynamic fibres, and are improving energy storage through the large-scale deployment of wind and solar power. In terms of alternative energy sources, breakthroughs in the fields of chemistry and biotechnology have enabled companies to develop and improve next-generation biofuels with less impact on food supplies. And corporate efforts to develop enabling technologies, for example through mobile phone applications, are helping farmers to build resilience and NGOs to efficiently gather data, while improving the accuracy and timeliness of climate-related information analysis and decision-making.
Scaling up corporate leadership
Business is uniquely positioned to address the environmental, social and development challenges related to energy and climate. Its contributions to climate change mitigation and adaptation support sustainable development and efforts to build the green economy while promoting a company’s viability, profitability and competitive edge.
Caring for Climate signatories are not only at the forefront of climate innovation, technologies and solutions, but have shown significant commitment to help achieve a robust climate change policy framework. By engaging directly in the UNFCCC process at the Conference of Parties, C4C companies can share solutions and commitments, and spur concrete action plans and partnerships in pursuit of international co-operation on climate change. At COP17 in Durban in 2011, 20 leading companies met with UNFCCC Executive Secretary Christiana Figueres to disseminate best and emerging practices, and to discuss with policy-makers the need to set clear policy frameworks and incentives that enable business to scale and intensify climate change efforts.
At the Rio+20 Corporate Sustainability Forum held in June 2012, C4C signatories made concrete commitments to advance the sustainability agenda – including a joint statement on reporting endorsed by 25 companies as well as solutions and partnerships in support of the Rio+20 agenda. The initiative also released a case compendium highlighting 10 corporate climate champions that are strengthening their own competitive edge whilecontributing to adaptive capacity and resilience in communities that are highly vulnerable to climate change.
While Caring for Climate represents a critical and growing mass of companies tackling climate change,the initiative has not yet penetrated the majority of the UN Global Compact’s 7,000 business participants. Progress is visible in many areas, but the urgency and scope of climate challenges require broader and even more concerted efforts.
Engagement by the private sector that is collaborative, serious and solutions-oriented is vital, and can help ensure that climate negotiations are a launching ground for widespread action in support of sustainability. There is enormous potential to produce results if greater scale is achieved. Leading technological and social innovations already exist, and these solutions can be more widely adopted with the right level of support. Governments, civil society groups and communities must view business as an indispensable ally in applying concrete solutions to address the myriad of challenges posed by climate change.
Today, we can say with confidence that corporate sustainability and climate action are a global movement. For this to become a transformative force, however, we need to win over more companies to take action. Ultimately, this battle will be won only once climate champions become the majority, and once all chambers of commerce, employer federations and other mainstream business associations are willing to support these efforts.
The private sector can be an instrumental part of the climate change solution, but addressing the impacts of climate change requires a purposeful departure from business as usual. Corporate climate leaders must intensify their own efforts and accelerate progress to advance the global climate change agenda. For those that take the challenge at hand seriously, building resilience and adapting to climate change will create true shared value for business and communities alike.
To learn more about Caring for Climate, visit www.caringforclimate.org.
Georg Kell is the Executive Director of the UN Global Compact. A key architect of the Global Compact, he has led the initiative since its founding in 2000, establishing the most widely recognised multi-stakeholder network and action platform to advance responsible business practices.
UN Global Compact
The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with universally accepted principles. It is the world’s largest voluntary corporate sustainability initiative with 7,000 corporate participants in 135 countries.