Unleashing the potential of business actionKate Levick
This blog first appeared on CDP’s website.
What can policymakers do to ensure companies are able to deliver massive reductions in greenhouse gas emissions?
At this week’s Business and Climate Summit in London we revealed new analysis that showed business could cut its greenhouse gas (GHG) emissions globally by 3.7bn metric tons of CO2 equivalent a year by 2030.
This amounts to an incredible 60% of total emission cuts pledged in Paris by each nation within their climate targets, more commonly known as the NDCs.
With the right policy environment, these corporate emission cuts could be taken even further. We estimated that if every relevant business engaged in the five climate initiatives identified in our report, emission cuts of 10 billion metric tons of CO2 equivalent could be achieved. That would take us more than halfway towards staying below 2degrees.
What policymakers can do
The relationship between government policies and business action can be mutually reinforcing. Once governments create policy that favours a low-carbon economy, introduce carbon pricing signals and create incentives, companies could be even more ambitious in their efforts to cut emissions. That will, in turn, make it easier for governments to achieve their NDCs – and even go beyond them.
CDP and its partners in We Mean Business are taking a leading role in coordinating many of the key business initiatives that are driving this change. As these initiatives grow, it is becoming clear what elements are important for policymakers to consider when they look to fulfil their NDCs. This in turn will help create a regulatory environment that will enable the private sector to pursue post-Paris strategies that result in massive GHG cuts.
100% renewable electricity
For example, the RE100 initiative, led by The Climate Group and CDP, asks companies to commit to using only renewable electricity, and aims to have 1,000 companies committed by 2020. With the right policy environment, companies could deliver some 4.5 billion metric tons of C02 cuts by pursuing a 100% renewable electricity goal.
It is becoming abundantly clear that governments have a role in enabling this change to happen at scale, for example by:
- Creating clear and transparent systems for certifying renewable power, so companies can be confident in what they’re buying;
- Having the right frameworks in place for a well-functioning renewable energy market;
- Requiring utilities to offer companies renewable energy options;
- Promoting the business benefits of renewable power;
- Making it easier for companies to produce renewable power on-site.
In a completely different area of climate policy, business experience again helps to point to the ways that government can scale up action. Companies that have pledged to remove deforestation from their supply chains say that governments in producer and consumer countries can make zero deforestation happen faster by:
- Coming together to promote sustainable practice in countries where producers are breaking the law, and lobbying countries to tighten up compliance;
- Streamlining and consolidating regulations and standards to encourage sustainable producers, especially for palm oil, soy and cattle products.
The new report, “The Business End of Climate Change” contains many more such examples. As it concludes:
“Clear policy leadership from the centre will become more important as city and regional governments, as well as sector organisations, become more active…The more governments do to set the tone, the more they’ll inspire confidence from businesses and investors and go a long way to bending the curve back below 2 degrees C.”
If you would like to find out more about how policy can unlock business potential, please get in touch ([email protected])