Big business stepping up its climate game as the future beckons
With the world’s attention focused on the COP21 climate talks in Paris, there are encouraging signs that the business world is ready to get fully on board and become as much a part of the solution as the problem. Conservation International’s CEO Peter Seligman is encouraged:
If we are going to meet the challenges of a changing climate, we must accelerate nature-based solutions with deep involvement by the business sector. I am optimistic, because I see many companies recognizing that climate change is an economic issue — it affects sourcing, logistics and global markets. Sustainability is no longer an afterthought. It is an integral part of corporate operations and supply chains.
Meanwhile, Jeremy Leggett at Winning the Carbon War reports from Paris that “fully a thousand mayors announced that their cities were pledging to 100% renewable power targets” and that institutional commitments to fossil fuel divestment jumped by over 25% in just the past ten weeks. Even more encouraging is a move by the G20 countries to form a Task Force on Climate-related Financial Disclosures (TCFD) charged helping financial markets get a better handle on rapidly increasing climate change risks. It will be chaired by Michael Bloomberg, who laid down the gauntlet:
It’s critical that industries and investors understand the risks posed by climate change, but currently there is too little transparency about those risks.
This is the culmination of a planning process that’s been ongoing in the G20 since last spring; the plan is for a set of voluntary guidelines to be in place within a year. According to Mark Carney, chair of the G20’s Financial Stability Board (FSB), which is behind the task force, “Companies would disclose not only what they are emitting today, but how they plan their transition to the net-zero world of the future. The G20 – whose member states account for around 85% of global emissions has a unique ability to make this possible.”
Chris Cheetham, global chief investment officer at HSBC global asset management, sound enthused:
The establishment of this taskforce is an important step towards creating the transparency and consistent standards needed for investors and pension funds to understand the risks and opportunities within their portfolios as we transition to a low carbon economy.
The FSB’s Carney reported that there are currently over 400 disclosure systems related to climate and sustainability, and that “We run the risk of getting lost in the right direction.” The TCFD aims to clarify the path forward for companies, which are already being pressured for fuller climate disclosure by shareholder advocacy groups and by regulators (the New York Attorney General has challenged the climate disclosure policies of both Exxon Mobil and Peabody Energy).
A final hopeful note was sounded by Leggett, who concludes his latest report with this vignette:
As for the corporates, yesterday I watched senior executives from Google, Facebook and Statoil on the same platform. Nobody who heard the two Silicon Valley giants talking the same language as the oil and gas major could have any doubts about the direction of travel, and the potential speed, of the energy transition. . . . There seems little doubt now that the hundreds of billions currently being invested in clean energy are en route to becoming the trillions that the energy transition will need.
If all this really continues to accelerate to the degree that the FSB, Bloomberg, and Leggett seem to expect, then we’ll be well on our way to a much more robust “muddle through up” Future Forecast than seemed possible even a year ago when we were completing our book. We may even gain enough momentum to get on track for what might be the best-case future scenario, wherein our current system changes fast enough that muddling through up reaches escape velocity and transitions relatively smoothly into an emergent new system that surprises us all with its breakthroughs in low-impact tech, social justice, and preserved natural landscapes.