Caring for Climate: The Business Leadership Platform

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Georg Kell, Executive Director of the UN Global Compact

The rise of climate change as a fundamental issue for society has emphasised the need for leadership and voluntary action on the environment. Against this background The Global Compact, together with the United Nations Environment Programme (UNEP) and the World Business Council for Sustainable Development (WBCSD), has developed Caring for Climate: The Business Leadership Platform as a way to mobilise business action on climate change. Within months of launching the initiative, 200 companies from around the world, including many of the world’s largest transnational corporations, have endorsed the statement and are already taking action.

INTRODUCTION

Through the United Nations Global Compact, thousands of companies in over 100 countries are working to integrate 10 principles in the areas of human rights, labour, environment and anti-corruption into their strategies and day to day operations. The Global Compact’s commitment to environmental protection is firmly embedded in our foundational spirit and three environmental principles which are drawn from the 1992 Rio Declaration on Environment and Development:

Business should support a precautionary approach to environmental challenges.
Business should undertake initiatives to promote greater environmental responsibility.
Business should encourage the development and diffusion of environmentally friendly technologies.

The rise of climate change as a fundamental issue for society has emphasised the need for leadership and voluntary action on the environment, including in the areas of biodiversity and responsible management of chemicals, wastes and water. The importance of early action is increasingly recognised, particularly in today’s globally integrated world where the ability to compete is more and more linked to a company’s capacity to innovate and demonstrate viable solutions for increasing energy efficiency and reducing carbon emissions.

CARING FOR CLIMATE INITIATIVE

Against this background, the Global Compact, together with the United Nations Environment Programme (UNEP) and the World Business Council for Sustainable Development (WBCSD), has developed Caring for Climate: The Business Leadership Platform as a way to mobilise business action on climate change. It is based on a shared belief that seriously addressing the climate challenge requires a preparedness to publicly express a vision and strategy, to make specific commitments, to set examples, to strengthen execution capability, to enhance public disclosure and to conduct pro-climate advocacy.

Launched in July 2007, Caring for Climate is a voluntary and complementary action platform for Global Compact participants wishing to demonstrate leadership on the climate issue. A company’s decision to join the platform by endorsing the Caring for Climate statement (see sidebar) must follow the Global Compact’s established leadership and organisational change model. It requires CEO level support, strategic and operational changes within the organisation, and ongoing public communication on related activities and performance in line with the existing Global Compact ‘Communication on Progress’ framework. CEOs who endorse the statement will be prepared to set goals, change practices, publicly disclose emissions, and communicate on an annual basis.
Due to the broad geographic spread of Global Compact participants, involving leading actors from both developed and emerging economies, and the multistakeholder composition of the Compact, Caring for Climate transcends national interests and responds to the global nature of the issue. It is our hope, therefore, that the platform will become a leading voice of reason on pragmatic solutions to climate change.

Voluntary initiatives, and more specifically the concept of ‘making markets work for climate’, need an appropriate regulatory framework in order to function. Therefore, Caring for Climate involves both a commitment to action by business and a call for governmental action. In a world where business interacts with government primarily at the national level, Caring for Climate has the potential to become a neutral platform for exchange between business and governments at the global level. More specifically, the platform will hopefully be used as a unique space for business-government collaboration in the context of major international dialogues, particularly those leading up to COP-15 in Copenhagen, Denmark in 2009.

COMPANIES TAKING ACTION ON CLIMATE

(Material based on “Caring for Climate: Tomorrow’s Leadership Today” published by the UN Global Compact, WBCSD and UNEP in July 2007.)

Within months of launching Caring for Climate, over 200 companies from around the world have endorsed the statement, among them are many of the world’s largest transnational corporations. (Figures as of October 2007.) Driving this global interest is an understanding that addressing climate change offers space for tangible value creation.

The global climate challenge is affecting every part of society, so thinking inclusive and big is essential. As renewable energy technologies come of age, business is challenged to make greater advances in energy efficiency and the introduction of cleaner technologies. Cleaner products and services show the way in taking on new market opportunities and realities. Examples from the electronics and household goods sector include ecomagination by General Electric, EcoVision by Philips and Eco products by Sony. A number of international business associations, including the WBCSD, have shown leadership and are exercising due pressure via their constituents.

Companies from sectors such as finance, tourism, building and construction, and information and communications technology have also joined UNEP in voluntary initiatives to promote best practice in new technologies and life cycle approaches to advance more efficient resource use and dematerialisation. All of these turn climate risks into opportunities involving alternative business models and cleaner development.

Looking at recent top corporate sustainability reports, one can see examples of leading companies introducing climate change campaigns, CO2 strategies, climate strategies and climate action plans. This shows that companies are moving from ad hoc efforts, to comprehensive strategies and targets and are reporting progress on these. It signals an opportunity for leaders to employ the Global Compact Performance Model and assess how climate can be addressed strategically, creating targeted results and impacts in the value chain and society.

For small enterprises, this could involve basic steps such as more efficient use of resources, recycling, installing energy efficient light bulbs and more efficient electricity use to reduce power bills. For a public institution, it can take the form of reducing air travel, making greater use of teleconferencing and improving building heating and cooling systems, all steps that if executed and monitored systematically help pave the way to climate friendly economy.

CONCLUSION

It is increasingly clear that responsible business can pay. Ignoring climate change implications and delaying proactive responses are not viable options if long term financial success and societal benefits are to be assured. It is true that proactively and comprehensively addressing climate issues will challenge established business practices. However, the alternative of not taking action would certainly be enormously disruptive, through sudden, unpredictable shocks, perhaps to supply and demand, as well as longer term effects.

Voluntary efforts can never be a substitute for government action; however, they can accelerate the process of solution finding and inspire consumers, peers and policy makers to have the courage to face the climate challenge as early as possible. We invite companies that are committed to advancing climate change solutions to endorse Caring for Climate. Together, we will show that responsible business practices can have positive, lasting impacts on our planet.

CARING FOR CLIMATE: THE BUSINESS LEADERSHIP PLATFORM

A Statement by the Business Leaders of the UN Global Compact

We, the business leaders of the UN Global Compact:
Recognise that:

Climate Change is an issue requiring urgent and extensive action on the part of governments, business and citizens if the risk of serious damage to global prosperity and security is to be avoided.
Climate change poses both risks and opportunities to all parts of the business sector, everywhere. It is in the interest of the business community, as well as responsible behaviour, for companies and their associations to play a full part in increasing energy efficiency and reducing carbon emissions to the atmosphere and, where possible, assisting society to respond to those changes in the climate to which we are already committed.

Commit to:

Taking practical actions now to increase the efficiency of energy usage and to reduce the carbon burden of our products, services and processes, to set voluntary targets for doing so, and to report publicly on the achievement of those targets annually in our Communication on Progress.
Building significant capacity within our organisations to understand fully the implications of climate change for our business and to develop a coherent business strategy for minimising risks and identifying opportunities. (It is understood that the setting of voluntary targets will be in accordance with different responsibilities and capabilities.)
Engaging fully and positively with our own national governments, intergovernmental organisations and civil society organisations to develop policies and measures that will provide an enabling framework for the business sector to contribute effectively to building a low carbon economy.
Working collaboratively with other enterprises nationally and sectorally, and along our value-chains, by setting standards and taking joint initiatives aimed at reducing climate risks, assisting with adaptation to climate change and enhancing climate related opportunities. (The term “setting standards” is clearly meant to refer to environmental performance standards, such as energy consumption, environmental impact and emissions. It does not refer to “international standards” whose design is the prerogative of governments.)
Becoming an active business champion for rapid and extensive response to climate change with our peers, employees, customers, investors and the broader public.

Expect from governments:
(It is understood that the call to governments to develop frameworks is meant to be framed under the current International framework.)

The urgent creation, in close consultation with the business community and civil society, of comprehensive, long term and effective legislative and fiscal frameworks designed to make markets work for the climate, in particular policies and mechanisms intended to create a stable price
for carbon.
Recognition that building effective public-private partnerships to respond to the climate challenge will require major public investments to catalyse and support business and civil society led initiatives, especially in relation to research, development, deployment and transfer of low carbon energy technologies and practices.
Vigorous international cooperation aimed at providing a robust global policy framework within which private investments in building a low carbon economy can be made, as well as providing financial and other support to assist those countries that require help to realise their own climate mitigation and adaptation targets whilst achieving poverty alleviation, energy security and natural resource management.

And will:

Work collaboratively on joint initiatives between public and private sectors and through them achieve a comprehensive understanding of how both public and private sectors can best play a pro-active and leading role in meeting the climate challenge in an effective way.
Invite the UN Global Compact to promote the public disclosure of actions taken by the signatories to this Statement and, in cooperation with UNEP and the WBCSD, communicate on this on a regular basis, starting July 2008.

Author

Georg Kell is the Executive Director of the United Nations Global Compact, the world’s largest voluntary corporate citizenship initiative with 4,500 participants and other stakeholders from 115 countries. Following extensive experiences in Africa and Asia as a financial analyst, Kell began his career at the UN in Geneva, where he worked from 1987 to 1990 with the UN Conference on Trade and Development (UNCTAD). In 1990, he joined the New York office of UNCTAD, which he headed from 1993 to 1997. In 1997, Kell became a senior officer in the Executive Office of UN Secretary-General Kofi Annan, responsible for fostering cooperation with the private sector. He has served as head of the UN Global Compact since 2000. A native of Germany, Kell holds advanced degrees in economics and engineering from the Technical University of Berlin.

Organisation

The UN Global Compact brings business together with UN agencies, labour, civil society and governments to advance 10 universal principles in the areas of human rights, labour, environment and anti-corruption. Through the power of collective action, the Global Compact seeks to mainstream these 10 principles in business activities around the world and to catalyse actions in support of broader UN goals. With over 4,500 stakeholders from more than 115 countries, it is the world’s largest voluntary corporate citizenship initiative.

Further information on Caring for Climate: A Business Leadership Platform can be found on the Global Compact website.

Picture credit: The Supe87/Fotolia

Climate Action - Assisting business towards carbon neutrality