As the year come to an end a lot of issues happened through the year. But COP 21 conference in France overshadowed a lot of incidences and with the reaching of an agreement, many viewed it as a ‘great leap forward’ to sustainable development. I for one lime other development analysts I have taken the agreement with the caution it deserves. I am still skeptical on the pledges that were made. Are they going to be a reality? Who is going to make the follow up on the pledges that they come through? What is the motive behind the pledges? What is Africa going to benefit in all this?
Despite the questions I have posted, the reality is that one way or the other those who are pledging the millions which are now amounting to trillions are feeling the hash side of the ever-changing climate. In this article am going to explore the underlying reasons behind business pledges to the climate cause. Businesses at COP 21 have promised to reduce their emissions, invest in renewables, and support climate policy. But are these commitments true progress or greenwash?
Corporate and public sector leaders at the Caring for Climate Business Forum in Paris, where companies unveiled a series of commitments to tackle climate change. Before we get into the commitments. It is important to analyze why business should be involved in climate change. As a first step, companies need to familiarize themselves with the climate change and put it in their management plans. Secondly, companies need to define priorities. This is seizing the most important business opportunities presented by climate change and reduce risks, companies are encouraged to define their priorities based on an assessment of their positive and negative, current and potential impact on climate change across their value chains.
Thirdly, setting goals is a necessary task. Goal setting is critical to business success and helps foster shared priorities and better performance across the organization. By aligning company goals with climate change issues, the leadership can demonstrate its commitment to sustainable development.
Fourthly the aspect of Integrating, is quite a pre-requisite for a sustainable business. Integrating sustainability into the core business and governance, and embedding sustainable development (climate change mitigation and adaptation) targets across all functions within the company, is key to achieving set goals. To pursue shared objectives or address systemic challenges, companies increasingly engage in partnerships across the value chain, within their sector or with governments and civil society organizations.
Reporting and communicating is another issue companies are not supposed to take for granted when it comes to climate change? The SDGs enable companies to report information on sustainable development performance using common indicators and a shared set of priorities. This knowledge will be vital in mitigation measures that are supposed to be taken upon. Accurate environmental activities reporting and disclosure is key to deal effectively with the changing climate. Companies are encouraged to build into the local climate change strategies and fund whole heartedly into their communication and reporting with stakeholders.
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Business Initiatives that were launched at the UN Global Compact’s Caring for Climate (C4C) Business Forum in December 2015, held on the sidelines of the climate conference, which is commonly known as COP21are as follows and include: The Business Leadership Criteria on Carbon Pricing programme, where 65 companies with a total market value of US$1.9 trillion agreed to set an internal carbon price, report it publicly, and called for a carbon market. Secondly the Science-Based Targets initiative, through which 114 companies including IKEA, Coca-Cola, and Kellogg will set emissions reduction targets in line with scientific recommendations for limiting global warming to 2 degrees Celsius. Thirdly, the Responsible Corporate Engagement in Climate Policy programme, where 114 companies will track their activities that influence climate policy, ensure these are consistent, and be transparent about their policy position on climate change. Fourthly, a move by two of the world’s biggest institutional investors – German firm Allianz and Dutch pension fund ABP – to join the Portfolio De-carbonisation Coalition, a group of investors which has promised to rid their portfolios of high carbon investments.
UN Secretary-General Ban Ki-moon welcomed the commitments by companies, noting: “The collective momentum among the private sector for climate action is growing daily, and more companies and investors are leading on climate action than at any time in history.” Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change also called these pledges “unprecedented”. However, some of us are skeptical about the sincerity of businesses behind their pledges. Am not alone in this edge of doubt.
Jesse Bragg, media director at US-based Corporate Accountability International, questioned the motives of some energy and utility firms, and banks which have investments in these carbon-intensive outfits. He has every reason to because any corporation making climate commitments, particularly if their business model is predicated on the extraction of fossil fuels or requires cheap energy to survive. Despite their commitments, these corporations may have a vested interest in weaker climate policy.
A recent report by CAI for example shows that notorious climate laggards like ExxonMobil which was recently allegedly exposed for lying about climate change for decades and Shell, which this year embarked on a controversial project to explore oil prospects in the Arctic, but later abandoned it have also signed up to the Lima-Paris Action Agenda (LPAA) platform. According to Bragg companies may also be trying to mask their energy-intensive activities by sponsoring the climate conference itself. French bank BNP Paribas, for example, is a COP21 sponsor, but it is also heavily invested in coal. While the company has pledged not to finance controversial coal mines such as a project by Indian conglomerate Adani in Australia and made other announcements to improve its coal financing practices, it continues to hold coal assets, said Bragg. “Their sponsorship is therefore little more than “a half-hearted attempt at public relations,” he said.
Jonathan Jacoby, policy manager, private sector department, Oxfam America, acknowledged that some companies with a presence at COP 21 are indeed lagging on climate change, but noted that the private sector today is “a tale of two business communities”. However, Jonathan Jacoby, noted that there are regressive firms which try to weaken climate targets, but they are now outnumbered by firms which have good intentions, he noted.
Some companies who unveil climate commitments at COP 21 – such as French energy firm Engie – are members of trade associations like the Confederation of Europe Business trade association, which has long opposed efforts by the European Union to set strong renewable energy adoption and emission reduction targets. It is a lot easier to believe that a corporation is operating in the best interest of the people if it is not behind the scenes undermining the very policies it advocates for. It does not make sense.
By assessing the above analysis if the Paris talks deliver a strong commitment on de-carbonising the global economy, “fossil fuel companies will have to be less complacent about diversifying their business” to include more sustainable energy sources. Companies which are sincere about climate action should distance themselves from regressive trade associations until the latter shows support for strong targets on reducing emissions. A good climate agreement will also enable the very difficult and uncomfortable conversations that are long overdue in traditional trade associations that these companies are members of. Companies should keep their word, while the commitments are a step in the right direction, it remains to be seen whether businesses will deliver on their promises.
Tapuwa O’bren Nhachi is a Programs Coordinator with the Institute of Sustainability Africa (INSAF): www.instforsustainafrica.org Email: [email protected] Twitter: @onhachi
