Why business involvement is critical at the Paris Agreement progress talksDavid Wei, Director, Climate, BSR
For over two years since the signing of the Paris Agreement, governments and businesses have shared an ambition to hold global warming well below 2°C, and to reach net zero global greenhouse gas emission in the second half of this century.
At the UN Climate Conference in Bonn this May, businesses, governments and civil society organizations from around the world shared evidence of their progress towards this goal. Named the Talanoa dialogue after a tradition of non-confrontational storytelling from COP President Fiji, this exchange is intended to build confidence for national governments to move further and faster.
For businesses, this proved a unique opportunity to sit with national governments and demonstrate that companies are playing a critical role in delivering the ambition of the Paris Agreement and driving rapid progress in the real economy.
For example, businesses offered insights into how they are setting ambitious emissions reduction goals, achieving these goals on time or ahead of schedule, and subsequently increasing their ambition, all while boosting investment and employment. Through this dialogue, business will evidence the scale and impact of corporate action, and showcase their critical role in building a prosperous low-carbon future.
Delivering impact at scale
The scale of corporate action continues to grow. To date, over 700 leading businesses around the world have made climate commitments through the We Mean Business coalition’s Take Action campaign.
Collectively, these companies are achieving real impact. Their greenhouse gas emissions (scopes 1 and 2) are equivalent to the total annual emissions of India. They have a collective market capitalization of over $16.7 trillion, equal to 20% of the global economy. And they have made more than 1,170 commitments to ambitious climate action, sending a clear signal to policy makers that business is implementing the Paris Agreement.
More than 400 of those companies have committed to, or have set, science-based targets to reduce greenhouse gas emissions, in line with the ambition of the Paris Agreement. Another 860 more have said they will do so in the next two years.
Four companies leading the way on climate action will be among those that take part in the Talanoa Dialogue this week: Indian multinational conglomerate Mahindra Group, the world’s largest furniture retailer IKEA, UK telecommunications company BT, and consumer goods giant Unilever.
As part of the Mahindra Group, Mahindra Sanyo Steel recently became the first steel company globally to have an approved science-based target. Meanwhile, 11 more of the Mahindra Group companies – with activities ranging from holidays to autoparts recycling – have committed to set science-based targets, bringing the total to 13.
In addition to committing all of his own companies to science based targets, Mahindra Group Chairman Anand Mahindra, as a Co-Chair of the upcoming Global Climate Action Summit, has challenged all companies to set science-based targets and to reduce emissions in line with the Paris Agreement.
UK-based telecommunications group BT is raising its ambition on climate having already made real progress. It recently updated its emissions reduction goal and is now committed to cut carbon emissions intensity by 87% by 2030, from a 2016/17 base year, having hit its 2020 target four years ahead of schedule.
IKEA is well on the way to achieving its aim of producing as much energy as it consumes, and in its 2017 financial year produced renewable energy equivalent to 73% of the energy used in global operations. This includes owning 416 wind turbines, more than the total number of IKEA stores, in 12 countries and placing some 750,000 rooftop solar PV panels on its buildings.
Paris is good for business
Many companies are finding that climate action not only reduces emissions, but is also good for business. For example, at multinational conglomerate Johnson Controls, energy productivity improvements have contributed to both a 41% reduction in greenhouse gas emissions intensity and over $100 million in annual energy savings. And Walmart, the world’s largest company by revenue, saved nearly $1 billion in a single year and avoided emitting almost 650,000 tonnes of CO2, as part of its science-based target.
IKEA has switched its entire range of light bulbs to LEDs and has to date sold some 85 million LED bulbs. If all bulbs that IKEA has sold replaced incandescent light bulbs, they would save enough energy to power 750,000 households for a year.
Forward-looking companies are not only rapidly reducing emissions; they are also innovating in the deployment of key technologies related to renewable energy and electric passenger vehicles.
For example, over 130 companies have committed to go 100% renewable as part of the RE100 initiative, and are now creating annual demand of over 162 TWh of renewable electricity, more than enough to power Poland or Malaysia.
Many of these businesses are achieving their renewable energy goals well ahead of schedule. Google, Apple, Wells Fargo and Autodesk are among the 25 companies now sourcing 100 percent of their electricity needs from renewables.
Meanwhile, 19 multinational companies have committed to accelerating the transition to EVs and making electric transport the new normal by 2030, through the EV100 initiative. These companies include Chinese internet giant Baidu, international courier service company Deutsche Post DHL Group, and the world’s leading fleet management and mobility company LeasePlan.
The Talanoa Dialogue provides a valuable opportunity for companies and countries to sit together and take stock of their collective progress. These stories of corporate action, and others that will be told on Sunday, are powerful examples of how companies are implementing the Paris Agreement and building the low-carbon economy.
The pace of private sector progress should give policymakers confidence that they can meet their existing national targets and can increase their policy ambition. In a virtuous circle, this policy ambition will bolster business efforts to transform the real economy. In the end, that is what the Talanoa Dialogue is all about.