Should businesses wait for explicit targets
from policy makers in order to start mitigating climate change? No. From November
30th to December 12th, 2015, the 21st Conference of
Parties (COP) took place in Paris. For 12 days representatives of nations and various
organisations gathered in Paris to formulate a universal agreement on climate
mitigation and adaptation. This agreement aims to restrict the maximum warming
of the global temperature to 2 degrees Celsius. However, past conferences have
not brought what the world was hoping for: a concrete, global carbon emission policy.
Companies are therefore increasingly taking matters into their own hands and setting
up ambitious projects. And so can you!
What does my company have to do with COP 21?
Diplomats and heads of state recently gathered
in Paris and, for the first time, each of the represented nations listed
concrete proposals for future climate policy. For example, the European Union
and its Member States are committed to a binding target of at least a 40%
domestic reduction in greenhouse gas emissions by 2030 compared to 1990[1].
The United States intends to achieve an economy-wide target of reducing its
greenhouse gas emissions by 26-28% below its 2005 level in 2025[2].
Although democratic institutions are not usually known for their decisiveness, The
COP21 agreement aims to achieve a significant decrease in carbon emissions.
The intended decrease in carbon emission
can have a wide range of implications at a company level. Countries can make
laws on energy efficiency, they can come up with taxes on carbon intensive
products (including fossil fuel use), or they can impose increased import
tariffs on unsustainably managed forestry etc. The impact of these measures
differs per type of business and per sector, but it most certainly has an
impact, either direct or indirect.
Be a frontrunner, not a laggard
In the light of these important
developments, companies are realising that the outcome of COP21 may affect their
business proposition. But instead of waiting for politics to unfold, the
business world is using the momentum created by the Conference to show
initiative. Corporations like Danone and Unilever are voluntarily pledging to
stringent emission targets[3],[4].
Furthermore, the CEOs of 78 major companies, including Siemens and HSBC, have
called on world leaders to include carbon pricing in a global climate deal at
COP21[5].
Even major oil and gas companies (BG Group plc, BP plc, Royal Dutch Shell,
Statoil and Total SA) have, Taking the summit in Paris into consideration, set
out their position in a joint letter to introduce carbon pricing systems[6].
These companies have already started recognizing
and identifying the implications of a changing climate on their business proposition.
By anticipating the outcome of COP21, they are taking a pre-emptive approach to
prevent any potential damage in the future, or to improve their position in the
market by grabbing the first-mover advantage. Those who move quickly may
generate not only a head start on their future targets, but also a competitive
advantage from a boost in reputation or increased efficiency.
So what can you do?
For companies that want to anticipate on a
changing climate, there are several options for a climate change strategy. For
an organisation that wants to get involved with climate change action, it is
sensible to formulate a clear strategy plan. Should the focus be on mitigation
or adaptation? What targets do you want to set? Here it can be useful to first map
the impact on your business so that you know where the easy wins and biggest
challenges are. With this knowledge, you can build a strong plan to act on.
A second step in corporate climate
management is measuring your impact. CO2 footprint, Life Cycle
Assessment, and impact monetisation are all methods that can be used to gain an
insight into the impact of your business practices. Not only do they measure the
impact on the climate, but some also provide data on other environmental factors,
which could prove to be valuable information in reducing your impact, or,
costs.
To harness the beneficial effect on your
business’ reputation, it is vital to report on your efforts. Reporting is a
great tool to track and communicate progress. On the topic of climate change, numerous
big corporations take part in the Carbon Disclosure Project (CDP). The CDP
requires an organisation to report on its climate performance, risks and
opportunities, and strategy. The outcome is a dual score: one for the actual
performance of the organisation, and one for the quality of the disclosure. The
performance score is relative to other organisation in the specific industry,
making it easy for a organisation to compare itself with its competitors.
Jump on
While bureaucracy is typically a slow-paced
environment, companies are much better equipped for fast change. In fact, as an
early mover, you can prepare yourself for future regulations while you reap the
benefits of being progressive. So don’t wait for the COP21 outcome. Use this
momentum to get your company in the leading group in the battle against climate
change now.
Nick de Ruiter is a partner at Sustainalize. He is a specialist in CSR strategy setting and performance monitoring.
Misha Elkerbout is a specialist in life cycle analyses, impact monetization and CSR performance improvement.
Marcella van Steenbergen is intern at Sustainalize with a profound interest in CSR, CSR strategy setting, impact measurement and CSR reporting.
[1] Latvia/1/LV-03-06-EU INDC.pdf
[2] U.S. Cover Note INDC and Accompanying Information.pdf
[4]
http://www.theguardian.com/environment/2015/nov/27/unilever-to-stop-using-coal-for-energy-within-five-years
[5]
https://agenda.weforum.org/2015/11/open-letter-from-ceos-to-world-leaders-urging-climate-action/
[6] http://www.shell.com/global/aboutshell/media/news-and-media-releases/2015/oil-and-gas-majors-call-for-carbon-pricing.html
