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Staying cool – Caring for Climate

COP21 in Paris is underway with the anticipation of reaching a global agreement on climate change. The outcome will change the operating environment for the corporate sector and their involvement in the process is crucial for delivering results. Caring for Climate (C4C), an initiative from the United Nations Global Compact, is a main driver for this cause. DNV GL climate change and sustainability expert Agnes Dudek takes a look at what has been the impact of the C4C so far and at how it can contribute looking forward.

"Climate change is the defining challenge of our time. I also believe it is the most potent game-changer for business” H.E. Ban Ki-moon, Secretary General United Nations

“Climate change is the defining challenge of our time. I also believe it is the most potent game-changer for business” H.E. Ban Ki-moon, Secretary General United Nations

The time to address humanity’s greatest challenge is now. The human, environmental and financial cost of climate change is fast becoming unbearable. Every day, millions of investment decisions are made that will affect the health of our planet for decades to come.The business sector is at the heart of our economies and the vast majority of investment decisions. It will be the business sector that determines whether we succeed in making the transition towards a future of sustainable economic growth or whether we stay on our current and highly unsustainable path.

Since the start of the Global Compact in 2000, global CO2 emissions have increased by 46 per cent and global atmospheric CO2 level are up by 8 per cent. At present, the unfortunate fact is that the world is not headed in the direction towards a 2-degree Celsius pathway – and it will be impossible to change this course without the active involvement of business.

The Caring for Climate initiative (C4C) is committed to doing exactly this – advancing the role of business in addressing climate change. The initiative provides a framework for business leaders to advance practical solutions and help shape public policy and attitudes. Today, Caring for Climate is endorsed by 450 CEOs. DNV GL was among the first companies to join the initiative when it launched in 2007.

Business and climate: From defense to offence
In DNV GL’s recent independent assessment report of the UN Global Compact, the world’s largest voluntary corporate sustainability initiative, DNV GL assessed the impact of the Global Compact since its inception in 2000, and the many drivers that have influenced the evolving relationship between business and society. Below are some of our findings:

There has been a dramatic change over the last fifteen years and especially during the last five. Back in 2000, businesses typically regarded climate and environmental issues as regulatory questions and waited for governments to tell them what to do. The private sector was little involved in shaping the global environment and climate dialogue. By many, the private sector was perceived to be the ‘evil’ and governments were seen to be in charge of protecting our climate and environment and tackling ‘bad’ businesses.

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Feeling increased pressure from society and awaiting an increased amount of legislation it would have to cope with, the private sector became more offensive, took voluntary actions and as a side-effect realized that paying attention to climate change and managing emissions makes good business sense.

Today, climate is on the minds of international business leaders, often moving faster than environmental standards and regulations. In the past few years businesses have entered the global debate on climate change policy as some of the most vocal supporters of a global carbon tax and of raising the bar on emission cuts. In our report NEXT – Sustainable Business, we asked Yolanda Kakabadse, the President WWF International, where the momentum for change was created during these years, she answered unequivocally: “in the business sector”.

“Engaging business in sustainable development is vital because the private sector holds the key to change”
Yolanda Kakabadse, the President WWF International

Companies are increasingly looking for more win-win solutions on the climate and the economy as a whole. More than ever before, business is seen as the source of innovation and solutions, as well as an advocate for climate policy. A new generation of climate-conscious managers are stepping into boardrooms, ready to strike a blow for the environment and to find impactful solutions to combat climate change.

C4C has through its various initiatives been instrumental in shaping beliefs that companies can be a force for good. The initiative is gaining global recognition from other institutional and organisational frameworks, and is a significant driver of business engagement on climate globally.

Companies are increasingly investing in renewable energy and technology. They are focusing on becoming more transparent and more behave more consistent with regards to lobbying, and on setting carbon pricing and their own targets to meet the 2°C climate change target. Investors are also one of the most important drivers in influencing business to take action on climate and the environment; demanding transparency and disclosure around climate management.

Climate change has become a main-stream issue for businesses. However there are still distinctions between large multinational companies with sufficient resources and smaller businesses, and there is still some way to go before climate risk is given the same level of importance as financial issues and other business risks.

Caring for Climate: Setting the path for low-carbon growth
In our report Impact – Transforming Business, Changing the World, we look at the impact of the C4C since its launch in 2007, and found that it has:

  • Helped streamlining transparency and reporting. In the period between 2009 and 2014, the percentage of C4C signatories that report to CDP has risen from 28% to 48% illustrating the increased interest of climate leaders to participate in a robust disclosure system. See the 2015 Caring for Climate Progress Report for the latest figures.
  • Incentivized companies to engage responsibly in climate policy. One hundred companies have committed and endorsed the C4C guides for responsible lobbying.
  • Generated commitments through initiative like the UN-business partnership Hub commitments on climate change, which are submitted on an ongoing basis.
  • Advanced the role of business in the climate change dialogue. Since 2013, the C4C Business Forum has been the official business–focused event at the international COP negotiations, allowing business, policy-makers and civil society to exchange good practice and discuss climate policy.
  • Incentivized signatories to take emission reductions efforts. In 2011, 79% of signatories pursued emission reduction activities to help reduce their carbon footprint; 52% set emission reductions targets; and, 59% publicly reported their 2011 emissions. And in 2013, CO2 emissions from the 33 largest C4C signatories have decrease by 13% since 2007. See the 2015 Caring for Climate Progress Report for the latest figures.
  • Raised awareness about the importance of putting a price on carbon among businesses and policy makers. C4C has defined ambitious engagement criteria and establishing a working group on the topic. The World Bank and other institutions have accelerated their related activities or embarked in related initiatives while C4C launched the criteria.
  • Raising awareness among companies about the importance of adaptation by establishing a working group, developing guidelines and compiling good adaptation practices. See the 2015 Caring for Climate Progress Report for the latest figures.
  • Contributed to introduce the concept of ‘transformation’. The C4C initiative Transformative Solutions for a Low-Carbon Future significantly contributed to introduce and transformative action into the corporate and social responsibility narrative.

Overall, C4C is seen as a convener with international legitimacy and a powerful advocate of climate actions. The initiative has given businesses the extra support they need to address the climate challenge, and has raised awareness of the positive role business can play supporting innovative solutions for climate.

What’s next?
Looking ahead, what can Caring for Climate do to mobilise more business engagement?

C4C can provide further guidance, methodology and concrete advice to companies on how to systematically integrate climate considerations and goals into their core business strategies. This can ultimately assist the aim of achieving carbon neutrality and increasing the resilience of businesses’ operations and of the communities in which they operate. Through the services DNV GL provides on climate risk, carbon neutrality and climate change (CDP) reporting, we see this as an increasing area of focus for businesses.

Further, C4C could focus some of its activities toward SMEs, who are major economic drivers, but often those in most need of support. C4C can also increase its policy advocacy and advise to end fossil fuels, to promote and support clean technology transfer mechanisms and to advance other policies aiming at achieving carbon neutrality and enhanced resilience. The UN Global Compact is already half way towards this in providing a platform for the private sector to meet and engage with policy makers, but further work could be done to ensure concrete actions out of this engagement.

C4C also has the potential to act as a facilitator to uncover synergies with other UN bodies and organizations. There are many existing initiatives in place but there is a need to regroup these to increase their collective impact.

Finally, C4C can support and launch more awareness raising campaigns among business about the need and the opportunities of engaging in climate action; and among governments and civil society about the benefits of establishing transparent and accountable private-public partnerships.

DNV GL itself is commited to become carbon neutral by 2020, as outlined in our company strategy.

More information?

Want to know more about our assessment of Caring for Climate? Download a copy of IMPACT on our publications page.

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