A majority of business leaders say that a long term agreement at the UN climate summit (COP21) in Paris is critical to supporting private sector investment in low carbon solutions, according to a global study by the United Nations Global Compact and Accenture.
The UN Global Compact-Accenture CEO Study report, Special Edition: A Call to Climate Action, also reveals that executives see action on climate change as an opportunity for growth and innovation that will be essential to securing competitive advantage in their industries.
Based on a survey of 750 business leaders from UN Global Compact participant companies, the research reveals that 70 percent of executives representing companies with annual revenues of more than $1 billion see climate change as presenting opportunities for growth and innovation for their company within the next five years. Sixty-seven percent already see a clear business case for action on climate change.
In the broader sample of business leaders across 121 countries, more than half (54 percent) of all respondents say that climate change will create opportunities for their company within the next five years. Forty eight percent believe that there is already a clear business case for action.
Business leaders are clear that government action is critical to supporting further progress, the report says. Seventy four percent of executives at companies with more than $1 billion in annual revenues, and 61 percent of all respondents, see a long-term agreement in Paris as critical to unlocking private-sector investment in climate solutions.
The study identifies five key policy measures that can unlock further private sector investment in climate solutions:
- Legislative and fiscal mechanisms to increase investment in climate solutions;
- Financial instruments to stimulate R&D and innovation in low-carbon solutions;
- Performance standards to reduce greenhouse gas emissions and enhance climate resilience;
- Global, robust and predictable carbon pricing mechanisms;
- The removal or phasing out of fossil fuel subsidies.
The concern about policy action comes as two thirds (66 percent) of business leaders say that the private sector is not doing enough to tackle climate change. Ninety-one percent believe that action is an urgent priority for business, but just one-third (34%) see progress on track to restrict global warming to less than the 2°C limit.
These results are slightly more optimistic than a BSR/Globescan survey released in October, which found that even in companies with sustainability commitments, about one-third of business leaders believe that a new agreement from COP21 in December will have little to no significance for their business, and only one-third believe their company will use the Sustainable Development Goals to set goals.
Also in October, the first draft of the new climate change agreement set for COP21 was presented to governments. The draft (or “non-paper”) was prepared at a request from countries to have a better basis from which to negotiate.