Climate Action Helps Companies Build Reputations And Attract Investors

The Conversation - Rumina Dhalla

Investors are starting to demand businesses take action on climate change. (Shutterstock)

This year, climate change topped off the agenda at the annual meeting of the World Economic Forum in Davos, Switzerland — where every January, global leaders and the heads of the world’s largest companies gather to find ways to improve the state of the world. When surveyed, experts from government, business, academia and non-governmental organizations said the failure to respond to climate change is a key risk.
Companies committed to tackle climate change are addressing their greenhouse gas emissions (GHGs) via science-based targets. These voluntary goals are compatible with the global push towards a low-carbon economy that aims to keep the global temperature increase to less than 2℃.
One program that is gaining traction globally is the Science Based Target Initiative (SBTI), a collaboration between CDP, a not-for-profit charity, the UN Global Compact, the World Resources Institute and the World Wildlife Fund. This program creates a global community where companies can set targets that align with the Paris Agreement.
Joining a global community like SBTI not only provides a formal framework for measurement and tracking goals, it also signals a company’s commitment to climate change action. As of early 2019, 525 companies have signed on, including 169 with approved targets.

Big companies at the forefront
IKEA, Unilever, Tesco, General Mills, L’Oreal, Walmart and McDonald’s are among the large multinational corporations that have signed on to the SBTI.
IKEA Group, for example, has committed to an 80 per cent reduction in GHG emissions in stores and other operations and a 50 per cent reduction in emissions from travel and customer deliveries by 2030, compared to 2016 levels. It will also cut emissions in its value chain by at least 15 per cent, resulting in a 70 per cent reduction in the climate footprint of an average IKEA product.
Large companies can make change within their own operations and along the supply chain. McDonald’s plans to reduce its emissions intensity across its supply chain by 31 per cent by 2030 (baseline 2015) by targeting energy use and packaging waste in restaurants, and streamlining its beef production, which make up more 60 per cent of emissions.
Similarly, General Mills, the packaged food company (Cheerios, Yoplait and Green Giant) set a science-based target to cut its GHG emissions by 28 per cent by 2025 (from a 2010 baseline) across its entire value chain, from farm to table to landfill. It plans to do this by getting its farmers to adopt sustainable practices that reduce emissions and protect at risk water sources, for example.
Companies participate in global sustainability initiatives and set external goals because of their sustainability mindset, strategic gains, external competitive or reputational risk pressures and recognition of an inexorable shift to a low-carbon economy.
While participation in the SBTI is voluntary, the results are reported publicly. Even though there are few tangible sanctions for non-performance, the absence of achievement or reporting can harm a company’s reputation.

Former U.S. Vice-President Al Gore speaks during the ‘Safeguarding the planet’ session at the annual meeting of the World Economic Forum in Davos, Switzerland, in January 2019. (AP Photo/Markus Schreiber)

In Canada, only nine companies have joined the SBTI, and all but one remain at the commitment-setting stage. Canadian National Railway has promised to reduce its emissions intensity by 29 per cent by 2030, based on a 2015 baseline.
There are several reasons for the low participation in SBTI among Canadian companies. The Chartered Professional Accountants of Canada argues that more than 99 per cent of businesses in Canada are small businesses, with fewer resources, employees and pressures.

Key benefits
SBTI and the participating companies, however, see a number of benefits from setting targets. They also provide companies with long-term goals that will be resistant to changes in management and shifts in business priorities.
A major European electric company, EDP, found strategic benefits in laying plans to decarbonize — it builds reputation, improves visibility and helps it benefit from innovation, and had a favourable response from investors, employees and customers.
Walmart says it is part of their sustainability journey to encourage others to look at emissions as a form of waste with financial value or inefficiency in the value chain. In 2017, it launched Project Gigaton to encourage suppliers to eliminate one billion tonnes of GHG emissions from their operations and supply chains by 2030 by targeting one of six pillars: energy, waste, packaging, agriculture, forests or product use. Suppliers achieving goals and communicating performance publicly are recognized as “Giga-Gurus.”
Unilever looks at science-based targets to boost its competitive advantage in the shift towards a low-carbon economy and to hedge against regulator pressures and the costs related to carbon pricing. In 2017, Unilever reduced energy-related emissions by 47 per cent per tonne of production from 2008 levels, and shifted towards renewable energy in manufacturing. The company also identified a nine per cent increase in GHG emissions from its consumer products since 2010, largely due to the consumers’ hot showers when using their products.
The food and beverage sector — considered a significant driver of global climate change and the one with the most at risk from climate change — has been an early adopter of science-based targets. Fifty-nine businesses, including Ben & Jerry’s and PepsiCo, have either set targets or are at the commitment stage.
Other global initiatives to encourage businesses to develop responsible practices and meet climate goals are also on the rise. For example, Principles for Responsible Investment has attracted 2,232 investors who believe in an “economically efficient, sustainable global financial system” and who agree to incorporate environmental, sustainability and governance issues into their investment practice.
Eighty-seven per cent of Canadians believe businesses must make a stronger commitment to climate change action. Youth, in particular, are demanding more commitment, and future consumers such as Greta Thunberg are taking to the world stage and inspiring other students to raise their voices.
It is unlikely that one company or one nation will make a significant impact on reducing emission levels, however, climate change can have significant impact on business.

Links

• How divesting of fossil fuels could help save the planet
• Failure to curb climate change a top risk: Davos survey
• Science Based Targets Initiative
• Science Based Targets
• Companies taking science-based climate action
• Principles for Responsible Investment
• 'The beginning of great change': Greta Thunberg hails school climate strikes 

The Coal, Hard Facts: Australia Could Follow Germany's Phase-Out Model

Fairfax - Frank Jotzo* | Andreas Loeschel*

Coal mining giant Glencore has announced it will cap its coal production and will prioritise investments that are essential to the low-carbon energy transition. It is a powerful illustration of how the corporate world realises that coal will be on the way out, globally.

Coal-fired power's days are numbered, but what number should we put on it? Credit: Michele Mossop

The commission is made up of representatives of utilities, electricity users, local communities, NGOs, academics and state and federal governments.
The coal commission has recommended that Germany phase out the use of coal for electricity by 2038 or perhaps 2035, starting with a rapid reduction in coal power plant capacity of about a third by 2022.  By 2030, almost two-thirds of coal generation should have left the market.

The commission is supported across the political spectrum. It as a high profile and strong legitimacy based on its broad membership. Parties and lobbies disagree over details, but the commission’s central recommendation is almost universally accepted in Germany.

Governments present and future will have leeway in how to translate these goals into policy, but it would be difficult to ditch the overall goals. Such predictability benefits everyone involved. It has been missing in Australia, where the direction of climate and energy policy has largely depended on which party is in government and which prime minister is in office.
Germany’s commission has suggested some approaches that could be popular politically, but that would have economic weaknesses.  One is about who should carry any additional costs. The commission recommends that local communities around power plants should be supported, that the owners of coal plants be compensated, and that electricity prices should not rise either for industry or consumers.

A coal-burning power plant steams behind wind generators in Gelsenkirchen, Germany. Credit:AP

So the taxpayer would be up for the costs. That may be conducive to keeping the stakeholders happy, but it is not ideal economically.
Another consideration is whether to use regulatory or market instruments to facilitate closure of coal plants. The default implementation of phase-out in Germany would be for government to determine which plants should close when, and then pay them out.
The more efficient way would be to let businesses decide which plants shut and when, using a market-based system. The coal commission hinted at this possibility. The costs could then be covered by the electricity industry.
Of course, the economically best way to achieve the efficient exit of coal plants is a price on carbon emissions. In Germany, this would mean implementing a minimum carbon price to bolster the incentive from the EU emissions trading scheme.
Perhaps it is time for an Australian coal commission. It gives a chance of molding lasting consensus, if representation of interest groups is broad.
The coming and inevitable phase-out of coal from the power system warrants a serious attempt to forge a widely shared consensus about how to go about it. That includes not only how to support regional economies and communities, a task that Labor’s proposed Just Transition Authority could tackle. It is about how to achieve an orderly exit, on what trajectory, and with what combination of renewables and energy storage will take coal’s place.
With that might come broad public acceptance and some durability of policies in our ever turbulent politics.

• Frank Jotzo is a professor at the ANU Crawford School of Public Policy.
• Andreas Loeschel is a professor at Muenster University and the chair of German government’s independent monitoring commission for the energy transition.
• Both are directors at the Australian-German Energy Transition Hub.

Links

• 'Very disappointed': Ministers berate coal miner over climate change commitment
• Time for Glencore, BHP to demerge their way out of coal
• NSW election 2019: Greens pitch $1.8b trust to help coal towns survive after mining
• Climate Action 100+: Australia's biggest emitters claim progress on climate risk
• 'We won': Landmark climate ruling as NSW court rejects coal mine

PBS NewsHour: Why Climate Change Is An ‘All-Encompassing Threat’

PBS NewsHour

Although a candidate just entered the 2020 presidential race with a platform centered on climate change, some experts say Americans aren’t fully aware of the scope and seriousness of global warming. Among them is David Wallace-Wells, who argues in a new book that the severity of the climate crisis has not yet been acknowledged, let alone addressed. He sits down with William Brangham to discuss.

David Wallace-Wells: The Uninhabitable Earth: Life After Warming

Penguin Random House

Transcript
Judy Woodruff:
Climate change continues to grow as a political issue in America.
As we reported, in the latest — the latest Democrat to announce a bid for the White House, Washington state's governor, Jay Inslee, says he will make climate change a central campaign theme.
This comes after Democrats in the House recently put forward their own aggressive plan.
But William Brangham talks with the author of an alarming new book which argues that we're barely acknowledging the severity of this crisis.

William Brangham:
It is worse, much worse, than you think. That's the first sentence of David Wallace-Wells' terrifying new book about climate change. It's called "The Uninhabitable Earth: Life After Warming."
In it, Wallace-Wells marshals the latest scientific research, which he argues points to one unimpeachable fact: that our use of fossil fuels, which admittedly has powered so much prosperity and growth across the world, is now the single greatest threat to our survival, one that he says — quote — "has brought us to the brink of a never-ending climate catastrophe."
David Wallace-Wells is a fellow at the New America Foundation and a columnist and editor at "New York Magazine."
Welcome.
David Wallace-Wells:
Thank you.

William Brangham:
I have to admit, I haven't been alarmed by a book as I was by yours. And I feel like I know a lot of what you're reporting on.
I should tell — we have also posted the first chapter of your book on our Web site. I would encourage people to read it to get a sense of the argument that you're making.
But help us understand what you think people don't quite appreciate about the severity of this problem.
David Wallace-Wells:
There's sort of three big things.
The first is speed. I think we had long thought that climate change was happening very slowly, that it was unfolding, at fastest, at about a decade timescale, more usually like centuries, and we didn't have to worry about it in our own lives, maybe even our children's lives, but it was something to worry about for our grandchildren.
More than half of all the emissions that we have put into the atmosphere in the entire history of humanity, we have done in the last 30 years. And that means that we're doing this damage in real time and in the space of a generation. So the speed is really overwhelming.
And if we lived off the coasts, we often thought that it was a matter of sea level rise, and we'd be safe. We could live inland, that would be OK. In fact, it's an all-encompassing threat that's not compartmentalizable to the coast. It's much bigger than sea level rise.
It impacts the economy, which could be 30 percent lower than it would be without climate change by the end of the century, and it impacts public health, conflict. We could have twice as much war because of climate change at the end of the century. That's the second thing, the scope.
And then the severity. Most scientists talked about two degrees as the sort of threshold of catastrophe.

William Brangham:
Two degrees Celsius.
David Wallace-Wells:
Yes. And that's about twice as much warming as we have had today. They describe that threshold as the threshold of catastrophe. We're on track to get to about 4 or 4.3 degrees Celsius by the end of the century.
And that whole range is really unconscionable in terms of how much climate suffering it would impose. And we have only just begun to see peaks of it, with wildfire and extreme weather. I think, in the coming decades, we're going to see much more of it.

William Brangham:
People hear two degrees, three degrees, four degrees, and those distinctions might seem trivial to people who are not immersed in this.
Three degrees warming, four degrees of warming is potentially calamitous.
David Wallace-Wells:
Yes.
Four degrees of warming, we would have, the U.N. suggests, as many as a billion climate refugees. That's as many people as live in North and South America combined. We would have $600 trillion of climate damages. That's double all the wealth that exists in the world today. Again, we would have twice as much war as we see today.
And the impacts would be everywhere, not just on — you know, not just on the sea level, not just on Arctic melt, not just on heat waves and droughts, but there would be no life on Earth that would be untouched by these forces. That's how all-encompassing the climate system is.

William Brangham:
The natural inclination of a lot of people when they hear you talk like this is to say, that's just hyperbole, that's not going to be so bad, we will find some fix for it.
I mean, it seems like you have to guard against apathy and nihilism and complacency. Your whole book seems to be arguing that none of this would be worth talking about if we didn't have some way to try to fix it.
David Wallace-Wells:
Yes, that's exactly how I feel.
And I think that, when we consider all of the climate horrors that are possible, it's important to remember that those are a mark of just how much power we retain over the climate. The average person can think of some of these really scary scenarios, a global refugee crisis, famine, drought, heat waves that kill people all around the world, and think, oh, my God, it's all over.
But, in fact, if we get to that situation, it will be because of what we do from here on out. Nothing that happened in the past, until a few years ago, is going to affect the climate going forward. The thing that will write that story is the actions that we take moving into the future.
And that means that the climate of the future is always within our control, as a human species. What that means for our politics and how we manage that, obviously very complicated. There are many obstacles ahead. But this is not something that is inevitable at all. In fact, nothing about it is inevitable.
We could avert all of these disasters if we collectively to decided to take action quickly. The question is how quickly we will take action and at what scale.

William Brangham:
You have actually argued that panic can be — that panic is appropriate in response to this, and that panic can be productive. How so?
David Wallace-Wells:
When we think about the campaigns against cigarette smoking, against drunk driving, these were public campaigns that drew very clearly on fear, and were successful as a result.
The U.N. says that, in order to avoid catastrophic levels of warming, we need a global mobilization at the level of World War II. We know, from history, we didn't fight that war out of hope or optimism. It was out of fear and alarm.
Now, I don't think that fear and alarm are the only way to talk about climate. I think that there are reasons for optimism. The policy is — with the Green New Deal, a lot of exciting opportunities there. Public opinion is moving very quickly. The price of solar is falling very rapidly. There are reasons for hope.
But in the big picture, the science itself is terrifying. Every finding that scientists come up with every day makes the world look bleaker. And if we look at those facts and become alarmed, we should allow ourselves to be alarmed and respond in kind.

William Brangham:
When faced with news about how awful climate change could be, there's such a natural reaction of people to say, what can I do individually?
You seem to argue in the book that individual actions, it's well-meaning, but it's really not enough.
David Wallace-Wells:
Yes. And I worry it can be a distraction.
I think people who are moved to live a little more responsibly when it comes to carbon, they should. If they want to eat less meat, if they want to fly less, that's wonderful. I applaud them. It's really noble.
But the contribution that you can make as an individual, adding up all of your lifestyle choices, is completely trivial to the impact that you can have through politics, through voting. I do think so.
The story of global climate change is so large, so all-encompassing, that really the actions of individuals can't make a dent in it. The only thing that can really change course is policy action at the national and international level.
Thankfully, many of us have that leverage in our own hands in voting and the possibility of mobilizing and doing activism around climate, pressuring our leaders to honor their climate commitments.
And I think that's much more important than what you buy or what you eat or what you wear, which I — again, I worry, it's a little bit of a distraction from real political action.

William Brangham:
All right. The book is "The Uninhabitable Earth."
David Wallace-Wells, thank you very much.
David Wallace-Wells:
Thank you.

Links

• David Wallace-Wells On Climate: ‘People Should Be Scared – I'm Scared’
• The Uninhabitable Earth: A Story Of The Future by David Wallace-Wells
• ‘The Devastation Of Human Life Is In View’: What A Burning World Tells Us About Climate Change
• 8 Predictions for What the World Will Look Like in 20 Years 
• Parenting the Climate Change Generation 
• You, Too, Are in Denial of Climate Change
• Why Al Gore Thinks There’s Still Hope for the Planet
• What If the Courts Could Save the Climate?
• In California, Climate Change Has Turned Rainy Season Into Fire Season 
• Could One Man Single-Handedly Ruin the Planet?
• Can a Carbon Tax Solve Climate Change? Well, No.
• Trump’s Climate Denial Isn’t Just a War on Our Coastlines. It’s a War on Our Brains.
• UN Says Climate Genocide Is Coming. It’s Actually Worse Than That.
• California’s Record-breaking Fire Isn’t the Week’s Worst Climate News
• How Did the End of the World Become Old News?
• The Paris Climate Accords Are Looking More and More Like Fantasy
• Climate Change Has Come for Los Angeles
• This Isn’t ‘the New Normal’ for Climate Change — That Will Be Worse
• How Climate Change Is Creating More Powerful Hurricanes
• ‘The Devastation Of Human Life Is In View’: What A Burning World Tells Us About Climate Change 
• The Uninhabitable Earth - David Wallace-Wells
• The Man Who Coined the Term ‘Global Warming’ on the Worst-Case Scenario for Planet Earth 
• ‘The Models Are Too Conservative’: Paleontologist Peter Ward on What Past Mass Extinctions Can Teach Us About Climate Change Today