A big majority of global business leaders think that government action is vital to lead the way on climate change as the lengthy COP21 summit starts in Paris this week.
Their views were echoed by Prime Minister David Cameron at the summit’s opening in the French capital, who told delegates that a comprehensive, long-term agreement would give certainty to businesses and the public across the world that governments were serious about lower carbon emissions.
A global study by the United Nations Global Compact and Accenture shows that nearly three-quarters of executives (74%) at firms with over US$1 billion in annual revenues agree that a long-term pact is essential to bring forward private-sector investment in climate solutions.
Words were backed with initial action as Mission Innovation was launched in Paris by President Obama, This international initiative by a group of 20 countries, including the UK, aims to accelerate clean energy investment and innovation.
David Cameron was at the launch alongside Presidents Obama and Hollande, President of the European Commission Jean-Claude Juncker, ministers and 16 other heads of government as well as Bill Gates.
Clean energy options
One of the most interesting aspects of the launch announcement for us was the clear emphasis on the availability already of simple, very effective energy-saving solutions, particularly LED lighting.
President Obama advised:
“We have already made incredible strides in driving down the costs of key clean energy options. The cost of LED lights has dropped 90% since 2008, large-scale solar by 60%, and wind and battery prices declined by over 40%. And with decreasing costs has come greater deployment.”
It is with effective solutions like LED lights, along with a raft of other easy energy and water saving products that the greatest strides can be made early on in the next phase of carbon emissions reductions.
Under Mission Innovation, 21 countries will double state-directed spending on clean energy R&D over the next five years and the UK plans to double its central government sector technology research, development and demonstration programmes to support this.
Amber Rudd, Secretary of State for Energy and Climate Change says:
“Investing more in R&D by both governments and the private sector is critical to ensure we harness and support the creativity, ingenuity and entrepreneurship of our universities and businesses in tackling the challenge of making clean affordable energy widely available.”
The initiative was accompanied by the announcement of the Breakthrough Energy Coalition with more than 25 investors from 10 countries including billionaires Bill Gates, Mark Zuckerberg, Richard Branson and other high-profile entrepreneurs.
The group backed Mission Innovation, launching a new investment drive for renewable is committed to a “new economic revolution” with clean energy at the core and will support early-stage clean-energy companies.
The global UN study shows that two thirds (66%) of business leaders believe that the private sector is not doing enough to tackle climate change with nine in ten underlining that action is an urgent business priority. However, only for 34% think that the process is currently on schedule to restrict global warming to less than 2°C.
The comments were amplified by Unilever CEO Paul Polman who said that says businesses could not be a bystander in efforts to tackle global warming, citing the fact that climate change was costing his company 300 million Euros annually.
The UN study also shows that 70% of executives see the opportunity for growth and innovation over the next five years embedded in climate change action, which will be essential to securing competitive advantage. Sixty-seven percent already see a clear business case for action on climate change.
The UN Global Compact-Accenture CEO Study report, Special Edition: A Call to Climate Action, is based on a survey of 750 business leaders.
By way of contrast, a broader sample of business leaders in 121 countries shows that 54% of all respondents believe that climate change will create opportunities for their company within the next five years and 48% think that there is already a clear business case for action.
Five key policies
The study identified five key policy measures that can unlock further private sector investment in climate solutions:
1. Legislative and fiscal mechanisms to increase investment in climate solutions;
2. Financial instruments to stimulate R&D and innovation in low-carbon solutions;
3. Performance standards to reduce greenhouse gas emissions and enhance climate resilience;
4. Global, robust and predictable carbon pricing mechanisms;
5. The removal or phasing out of fossil fuel subsidies.
Lise Kingo, Executive Director of the United Nations Global Compact advises:
“The international community has a unique opportunity in Paris to advance action on climate change through a bold, ambitious and universal agreement.
“Our research clearly shows that business leaders are committed to leading the way, and we believe that business can play a central role in galvanizing momentum to meet the first test of our collective ability to deliver collaborative action on the Sustainable Development Goals.”
In a smaller sample of 75 CEOs of corporate signatories to Caring for Climate, three-quarters believe that carbon pricing is an essential tool in accelerating action on climate change while 82% say that business needs a clear roadmap and timeline from governments on policies related to future carbon pricing mechanisms.
Eighty-four percent believe that carbon markets, enabled by a robust carbon price, can drive low-carbon innovation and investments in clean energy and efficiency.