As extreme weather events such as Typhoon Mangkhut and Hurricane Florence are making climate change more visible, the call to action is louder than ever. What should business know about climate change and how should they respond?
1. The Paris Agreement, signed in 2015, is a turning point in the global climate change fight. 197 countries committed to keeping global temperature rises to well below 2°C, with 1.5°C being the ultimate aim. Countries are required to establish plans and targets, known as nationally determined contributions (NDCs) which will have a five-year reporting cycle. Ambition will increase over time.
2. Industry, individuals and Governments will face increasing pressure to respond to climate change as current action leaves us far behind the 2 degrees target. If emissions continue at current rates for just two decades, we are likely to far exceed a 3°C increase, a level not seen for 3 million years. It is imperative to act by better measuring, understanding and mitigating our climate impacts.
3. All Paris Agreement signatories have at least one national law or policy on climate change. The total number of laws globally stands at more than 1,500, up from around 70 in 1997. Rates of creating new laws will slow but consolidation through rules and regulations will grow, creating legal incentives for climate friendly approaches.
4. Climate change litigation is a new form of action. Strategic legal cases seeking to hold business and Governments to account are more prevalent. Linking climate change impact to humans’ rights violations, Typhon Haiyan survivors, Greenpeace South East Asia and others have filed a petition with the Commission on Human Rights of the Philippines against the ‘Carbon Majors’ companies. A Peruvian farmer who is taking energy giant RWE to court in Germany for climate related human rights abuses. Demonstrating your business is doing everything it can to mitigate its climate impact will help manage risks from current and future litigation.
5. Action is being driven by a diverse range of leaders. California fronting a growing coalition of US states and cities that have vowed to uphold the Paris targets. C40 is a network of the world’s megacities committed to addressing climate change whilst increasing citizen’s health and economic opportunities. Forward thinking companies, including Google, IKEA, Mars and Microsoft are investing in green technologies and sustainable practices. Join them.
6. Businesses can help create the low carbon economy. Consumers are demanding more sustainable goods and services. The Global Commission on the Economy and Climate estimates that if the top ten global retailers strengthened their branding through creating science-based targets aligned with the Paris agreement, it could translate into almost US$4 billion each day of purchasing power becoming green. Help create and tap into that market.
7. The Green Finance Initiative estimates that US$ 90 trillion is needed to achieve global sustainable development and climate change goals by 2030. In 2017 the global green bond market reached US$155.5 billion. To bridge the funding gap, financial markets will increasingly create green products. Dutch bank ING will assess its $600bn lending portfolio based on climate impact, moving towards Paris Agreement compliance. Climate Action 100+ draws together US$28 trillion of investment to demand climate impact reporting, mitigation and adaption strategies. If companies want to access future funding, demonstrating green credentials will open bigger opportunities.
8. Global investment in renewable energy increased 2% in 2017 to $279.8 billion, taking cumulative investment since 2010 to $2.2 trillion. China led renewable energy investment in 2017 with $126.6 billion, its highest figure ever and 45% of the global total. Green technology development and deployment is a central to the Paris agreement. Businesses should reduce their carbon emissions by tapping into this innovation as well as transferring any owned technologies to geographical areas with greatest need in line with Paris agreement NDCs.
9. Climate change is now a concern of shareholders. In 2017 a 62% shareholder vote against ExxonMobile’s board required the company to respond to the Paris agreement and later forced greater disclosure on climate impacts. Shell’s shareholders have encouraged the company to go further than its current commitment to reduce its carbon footprint by 50% by 2050. Shareholder interest will spread across industries as need and awareness rises.
10. Doing nothing will damage the global economy. The UN secretary general has warned there would be a $2tn loss in productivity in the global economy by 2030 due to effects of climate change. Make sure your business is actively contributing to the solution.
You may think global emission reductions and climate change action is well underway. But current activity is nowhere near enough. Everyone must step up. Act now!