Climate action from businesses and cities can make the difference – and it’s already happeningWe Mean Business
A new report published last week by the New Climate Economy shows how the business community can change the narrative on climate change and prove that all actors are now heading in the same direction, especially those who haven’t traditionally been involved in the global low carbon challenge.
By bringing forward ten practical suggestions on how businesses and cities can drive the low carbon transition, and at the same time boost their economic growth. The report shows that “governments, cities, businesses and investors need to work much more closely together and take advantage of recent developments if the opportunities are to be seized”, as pointed out by the former Mexican president Felipe Calderon.
The report, which is the result of the collaboration between 28 chief executives, economists and political figures, highlights how the business community can work to bridge the gap between what the emission trend is projected to be until 2030, under the business-as-usual scenario, and what it has to be to stay under the 2C limit. If those suggestions were implemented by government leaders, up to 96% of the CO2 emission reductions could be achieved.
“While major companies and business associations previously often opposed climate policy”, stress the authors, “many now demand it. Most recently, at the Business and Climate Summit in Paris in May, business associations whose networks represent 6.5 million firms called for strong climate action and a new international climate agreement.”
But most important, it is now acknowledged that climate actions are a “huge business opportunity”, as companies that invest in low carbon projects are seeing an average internal rate of return (IRR) of 11% globally – and climate action leaders achieving higher average returns of 27%.
Stakeholders have also recognized climate change as a real asset risk, and are often pushing businesses to disclose their climate actions and increase their green investments. “In April and May 2015”, says the report, “shareholders of Shell and BP passed resolutions requiring the companies to report the actions they were taking in relation to climate change, including emissions management, asset resilience, research and development in low-carbon technologies, and support for public policy.” A clear indication of what direction investors are looking to take in the long-term.
Cities could save around $17 trillion globally by 2050 by developing low carbon policies and investing in renewable energies, low emission transports and building efficiency. The effectiveness of these solutions comes from frameworks and coalitions that already exist, stress the authors, in initiatives like the C40 group and the Compact of Mayors.
Michael Jacobs, report director for The New Climate Economy, told the Financial Times that “there is much more potential out there” than what countries have shown so far through their INDCs and their actions prior to the Paris climate conference. And the business and investors community is now pushing for that potential to be exploited, because the low carbon future is the only possible future.