PARIS, France, December 10, 2015 (ENS) – Corporate actions on key climate issues such as carbon pricing, finance, responsible policy engagement and science-based emissions targets were announced on the 8th December at the Caring for Climate Business Forum, the official avenue for business at COP21 in Paris.
COP21 is shorthand for the 21st Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC).
At the Paris-Le Bourget conference hall, government negotiators toiled over the language of a legally-binding agreement that would require all nations to reduce their greenhouse gas emissions to levels that would keep global warming below 2 degrees Celsius above pre-industrial levels. This target was agreed at the 2009 COP in Copenhagen and made official at the 2010 COP in Cancun.
Meanwhile, during this parallel event, more than 450 CEOs from 65 countries across 30 sectors pledged to set emissions targets, report on progress and work with policymakers through the Caring for Climate initiative.
Participants from business, finance, government, civil society and the United Nations gathered for two days to advance the role of the private sector in combating climate change.
The UN Global Compact, UN Environment Programme and the UNFCCC Secretariat gathered the group under the banner of Caring for Climate, the world’s largest business coalition for climate change.
The event was attended by UN Secretary-General Ban Ki-moon, France’s Minister of Environment, Sustainable Development and Energy Ségolène Royal, and U.S. Secretary of State John Kerry.
Ban credited the business sector for its work in the global effort to limit damaging climate change. “The collective momentum among the private sector for climate action is growing daily. More companies and investors are leading on climate action than at any time in history,” Ban said.
“But to limit global temperature rise to less than two degrees we must go much further and faster,” said the UN leader. “We need 100 percent participation from the business community.”
On the issue of carbon pricing, he indicated that companies have been “instrumental” in ensuring that a price on carbon is recognized as a necessary and effective tool.
According to the Carbon Disclosure Project, more than 1,000 companies now say that they have set an internal price or plan to do so in the future. This compares to 100 companies a year ago – a 10-fold increase.
“The private sector can help to fill the gap between what has been committed by governments through the INDCs [Intended Nationally Determined Contributions] and what is needed to reach a carbon neutral economy by mid-century,” said Lise Kingo, executive director of the UN Global Compact. “The momentum is unstoppable.”
“The new targets announced at COP21, if achieved, will generate an estimated annual emissions savings of 93.6 million metric tons CO2e or more than the annual carbon emissions of Peru,” Kingo said.
Launched in 2000, at the turn of the millenium, the UN Global Compact is a leadership platform for responsible corporate policies and practices. It is the largest corporate sustainability initiative in the world, with over 8,000 companies and 4,000 non-business signatories based in 170 countries.
“Our job coming out of Paris is to mobilize the great majority of companies that are not yet part of this movement,” Kingo said.
U.S. Secretary of State John Kerry highlighted the support of 154 U.S. companies for action on climate change through their commitment to the American Business Act on Climate Pledge.
“As you leave Paris, carry a clear message that how we do business today will determine if we do business in the future,” said Kerry. “In the end, it’s business – the choices you make and the products you make – that will make the difference.”
CEOs offered commitments to climate solutions:
65 CEOs with a total market capitalization of US$1.9 trillion across 20 sectors have integrated carbon pricing into corporate long-term strategies and investment decisions. They pledged to set an internal carbon price, report publicly, and call for carbon markets through the Business Leadership Criteria on Carbon Pricing.
114 companies have committed to set up processes to internally audit all activities that influence climate policy; work to ensure that all of this activity is consistent; and communicate policy positions, actions and outcomes.
114 companies committed to align their emissions reductions targets with the level of decarbonization required to keep global temperature increase below 2°C through the Science-Based Targets initiative.
79 chief executives, representing US$2.13 trillion in revenue, announced that their companies would reduce environmental and carbon footprints, set targets to reduce their emissions, and collaborate with supply chains and across sectors.
140 companies with a total market capitalization of over US$100 billion, and nearly 30 institutional investment firms with assets estimated at US$2.5 trillion, committed to producing climate change-related information in their mainstream reports.
39 French companies pledged to combat climate change, committing at least €45 billion over the next five years for investments and financing in renewable energies, energy efficiency and other technologies accelerating the transition to a clean energy, low carbon future.
Global capital market leaders met separately to discuss how stock exchanges, investors and regulators can support the global climate agenda. The gathering of CEOs began with a special opening bell ceremony December 7 at Euronext Paris dedicated to the success of COP21.
Euronext is one of 11 stock exchanges that showed their commitment to sustainable capital markets, and their support for the evolving climate agenda, by becoming a United Nations Sustainable Stock Exchanges (SSE) Partner Exchange.
The SSE initiative now has participation from 47 stock exchanges across five continents, including four out of the top five largest exchanges in the world.
Addressing the stock exchange CEOs at a luncheon, economist Jeffrey Sachs, director of Columbia University’s Earth Institute, encouraged them to act boldly on climate, and congratulated them for work already accomplished.
“Capital markets will be the main driver of the transformation,” said Professor Sachs, “and we will be on the right track when stock markets say ‘shame on you,’ punishing those who continue to add stranded assets to their portfolios.”
Many other corporations are promising action and pressing governments to forge a strong global climate pact.
Citing droughts, temperature shifts and other impacts that will make apparel production “more difficult and costly,” the CEOs of seven top global apparel companies December 3 called on government leaders to reach a strong climate change agreement in Paris that will stop the growth of greenhouse gas emissions causing damaging global warming.
Top executives at Levi Strauss & Co., Gap Inc., VF Corporation, H&M, Eileen Fisher, Adidas Group and Burton Snowboards wrote, “We come together … to acknowledge that climate change is harming the world in which we operate. … Therefore, we call on you to reach a global agreement that provides the certainty businesses need and ambition climate science demands.”
Food company CEOs such as the heads of Coca-Cola, PepsiCo, the Hain Celestial Group Inc., General Mills, Unilever, Kellogg and Hershey’s announced in October that they signed a joint letter to U.S. and world leaders urging a robust international climate agreement in Paris.
The letter cites the growing impacts of drought, flooding and hotter growing conditions on the world’s food supply.
“Combating climate change is not simply about the environment. Promoting clean energy and conserving natural resources today will help create the thriving companies and societies of tomorrow,” said Indra Nooyi, PepsiCo chairman and CEO.
Muhtar Kent, chairman and CEO of The Coca-Cola Company, said, “As we face a resource-stressed world with growing global demands on food and water, we must seek solutions that drive mutual benefit for business, communities and nature. Companies who successfully balance social, environmental and economic values will be sustainably successful in the 21st century.”
Both the apparel and the food company statements were coordinated by Ceres, a Boston-based nonprofit mobilizing business leadership on global sustainability challenges.
Ceres President Mindy Lubber said, “Increasingly more companies, even long-standing competitors, are uniting at this pivotal moment to urge our political leaders to act swiftly and decisively on global warming.”
Ceres directs the Investor Network on Climate Risk, a network of more than 110 institutional investors with collective assets totaling more than $13 trillion.
Throughout the world, investors groups are paying close attention to the COP21 negotiations.
The Institutional Investors Group on Climate Change, based in London, says an agreement on temperature target of 1.5 degrees is “within reach.”
Big emitters, including China, the United States, Canada, and the European Union, have expressed support for the principle of a 1.5 degree Celsius global temperature target.
While this tightening of the 2 degree Celsius target is a key demand from vulnerable developing countries, small island nations and environmental groups, it is opposed by many big developing countries, which argue it would limit their ability to develop modern economies.
UN Secretary-General Ban, who has criss-crossed the globe tirelessly for years to bring about an effective climate agreement, said today, “Across the world, businesses and investors are standing up for a strong agreement in Paris that sends the right market signals. They are asking for a clear message that the transition to cleaner, low emissions energy sources is necessary, inevitable, irreversible and beneficial.”
Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.