Monday, January 26, 2015

Business Leadership on Climate Change (WEF Summaries)

The 2015 edition of the World Economic Forum (WEF) put unprecedented emphasis on the role of business to manage climate change. Both to mitigate costly risks and reap lucrative benefits, the business community is beginning to take climate concerns very seriously.

One of the key stories that emerged out of the WED last week is that an unprecedented number of business leaders are showing bold leadership on climate action. Business leaders are speaking more clearly and more cohesively than ever about the need to address climate change.

As Al Gore explained in a Davos presentation, "We have the solutions at hand. And this is why I’m so excited about all of the work being done, led by the business community," he said. "The private sector is leading the way," he added.

The private sector represents more than half (60%) of the global economy, so their importance in efforts to combat climate change cannot be overstated. Christiana Figueres, Executive Secretary of the UNFCCC made the point eloquently when she said, "There is no solution for climate without business, but equally there is no business continuity without a solution to climate."

Business has a critical role in helping to meet the climate challenge and they appear to be prepared to play their part. Business leaders continue to be concerned about risk not only in the future but as a present day reality. They see that climate change is already impacting their bottom lines.

Necessity is driving an unprecedented number of businesses to get on-board. Paul Polman, the CEO of Unilever, a leading sustainability focused company, summarized the current state of business saying, "It is not surprising that more businesses are stepping up to the plate. We now have 4,000 businesses reporting their greenhouse gas emissions; 80% of the world’s 500 largest companies are now setting target emissions standards."

The conversation on climate and energy in Davos shifted from one focused exclusively on financial risks to a discussion about economic benefits. With more companies than ever benefiting from low carbon investments, business leaders are beginning to see that climate change is not only a matter of reducing costs by managing risk it is also a lucrative opportunity. The Climate Has Changed Report demonstrates that in 2012 and 2013, companies invested in low-carbon programs are reaping an average rate of return of 27 percent.

Andrew Wales, SVP Sustainable Development, SABMiller put it this way. "I think progressive businesses have no option but to stand up more frequently and boldly to talk about the growth impact of not tackling climate change, of not understanding water scarcity. It's a growth question, therefore it's a business success question."

Businesses cannot afford to avoid acting on climate change nor should they ignore the opportunities. More than at any point in human history, the business community is acknowledging that addressing climate change makes good business sense.

Related
WEF Summaries: Climate Change
Towards a Global Climate Agreement at COP21 (WEF Summaries)
Curbing Fossil Fuels - Carbon Pricing and an End to Subsidies (WEF Summaries)
The Value of Investing in Climate Mitigation (WEF Summaries)
Global Economies Feeling the Heat from Climate Change (WEF Summaries)
Collaboration and Cooperation are Imperitive (WEF Summaries)
What is The World Economic Forum (WEF)
Risks Associated with Environment, Climate, Water Crisis and Extreme Weather in the WEF Report

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