As evidenced by the unprecedented private-sector engagement in COP21 earlier this month, businesses globally get that they need to innovate (and improve!) their products, services and business models to combat climate change, resource scarcity and unpredictable futures. Aside from the alignment of 195 nations on a climate-action agreement, what did all the talk at COP21 amount to from a business perspective? A lot of initiatives that push forward change and collaboration. But is it all smoke and mirrors, and toothless pledges, or is there real action brewing?
It looks like it’s a solid mix of both. Ultimately we’ll need get to the point where coalitions, collaborations and partnerships develop after such summits, and vague pledges and statements are a thing of the past. For now, let’s highlight those collaborative, multi-stakeholder initiatives that have arisen from COP21, particularly in five industries that, because of their massive economic and carbon impacts, have perhaps the most opportunity and potential to change our global economy: agriculture, finance, the built environment, transportation and consumer goods.
Danone and environmental solutions provider Veolia formed an alliance to harness the power of collaboration to combat the challenges of climate change and work toward a circular economy. Through the partnership, the companies say they will actively work to exchange information on water cycles, waste-management technologies, sustainable agriculture and energy-efficiency measures.
Meanwhile, leading agri-business companies PepsiCo, Monsanto, Olam and Kellogg signed a Climate Smart Agriculture statement to indicate their intent to make 50 percent more food available and strengthen the climate resilience of farming communities whilst reducing agricultural and land-use change emissions by at least 50 percent. Similarly, the Sustainable Coffee Challenge was launched at COP21, involving NGO Conservation International and Starbucks, along with other industry leaders. This group is pledging to make their coffee the “first sustainably sourced agricultural product” in the world. While the sentiment behind these two initiatives is admirable, it would be better to see some action items outlined.
To bolster the case for action, the World Bank Group and partners formally launched the Carbon Pricing Leadership Coalition in Paris. This public-private mix of government, business and civil society leaders was created last year after the U.N. Climate Summit. However at COP21, the coalition solidified plans to expand the use of carbon-pricing policies to create jobs, encourage innovation, and achieve meaningful emissions reductions.
Another multi-stakeholder group - comprised of investors, industry and government players - initiated the Paris Green Bonds Statement. The Statement aims to increase investment in and support policies that drive the development of sustainable infrastructure and - as Climate Bonds CEO Sean Kidney pointed out - support “emerging markets and economies that will be building new energy and urban networks in the coming years.”
The International Union for Conservation of Nature (IUCN) and the World Business Council for Sustainable Development (WBCSD) announced a new five-year partnership that will help businesses address global challenges, such as climate change and ecosystem degradation, by valuing nature. Similarly, the WBCSD launched the Natural Infrastructure for Business online platform to increase corporate investment in ecosystem services that are key to their continued operations. In this way, they invest in reversing resource degradation and generate benefits for their operations, the economy, the environment and society. These two initiatives are crucial steps forward in accounting for the externalities that businesses typically don’t count in their operational expenses such as usage and degradation of water and soil, and air pollution.
The built environment – buildings and construction – is responsible for more than 30 percent of global CO2 emissions. To tackle that, the Global Alliance for Buildings and Construction was formed at COP21. The alliance includes both government participants responsible for setting building codes and regulations, and private and non-governmental organizations with a vested interest in green construction. Importantly, the alliance includes big players such as the World Green Building Council, which represents over 27,000 companies involved in green building worldwide. Actions include: raising awareness of progress made and new opportunities, facilitating new partnerships, knowledge sharing, access to funding and the implementation support offered by Alliance partners.
The EU Nearly Zero Energy Building (nZEB) initiative was also launched at COP21. It entails a dozen major companies’ intention to prioritizenZEB designs for new facilities, with signatories committing to the delivery of new build properties by 2020 and nZEB refurbished buildings by 2030. The coalition features 16 companies from across the building and property sector and supply chain, including British Land, Hammerson, Interface, JLL, Kingfisher, Land Securities, Lloyd's Banking Group, Philips, Skanska and Tesco.
As part of WBCSD’s already existing Low Carbon Technology Partnerships initiative (LCTPi), a group of established freight companies have initiated a new partnership to reduce emissions from road freight transport. The new partnership aims to demonstrate the unmapped potential of collaboration in road freight transport to help meet the science-based target of 48 percent reduction in absolute emissions between 2010 and 2050.
Two initiatives that sound promising but as of now seem short on solid deliverables are the “electro-mobility” call to action led by Tesla Motors and Michelin Nissan-Renault, and the Global Green Freight Action Plan. The first aims to have electric vehicles to account for 20 percent of all cars on the road in any country by 2030. The latter involves dozens of countries – as well as companies such as Deutsche Post DHL, Hewlett Packard, IKEA and Volvo – that have agreed to pursue a global framework to dramatically reduce emissions of CO2, soot, particulate matter and other pollutants from freight vehicles by 2025.
At COP21 the consumer goods sector mostly stuck to announcing pledges rather than forming coalitions and collaborative future working arrangements. Under the Consumer Goods Forum (CGF) Initiative, Marks & Spencer and Unilever signed a new pledge committing to prioritize the development of sustainable palm oil, beef, paper and other commodities, as part of a major public-private partnership aimed at tackling deforestation. Through the We Mean Business Coalition, 42 major companies working have pledged to remove commodity-driven deforestation from all supply chains by 2020, 10 years ahead of the global goal announced last year to phase out net deforestation by 2030.
Let’s hope that these initiatives are the first of countless more, and represent a dramatic, decisive shift from talk to action on tackling climate change.