Whatever one’s business sector is, climate change should be at the top of the agenda

Whatever one’s business sector is, climate change should be at the top of the agenda

The UN, in its course to combat climate change, has declared that this global phenomenon, should be at the top of everyone’s agenda, regardless of the sector, since it doesn’t only affect the environment, but also business.

The UN Climate Action Summit, that was convened by UN Secretary-General António Guterres, on 23rd September 2019, aims to meet the urgent need to address the global climate emergency and to achieve the goals of the Paris Agreement, signed in 2016 (https://unfccc.int/sites/default/files/english_paris_agreement.pdf).

In the Paris Agreement, all countries agreed to work towards limiting global temperature rise to well below 2 degrees Celsius, and to strive for 1.5 degrees Celsius.

During the UN Climate Action Summit, leaders from government, business and civil society, announced, steps to boost climate action momentum, demonstrating its growing recognition that the pace of climate action must be rapidly accelerated.

Notwithstanding the countries’ commitments to upping their game, announcing emission cuts and other steps to fight climate change, the private sector had the opportunity to present how it can bring real positive change, whilst profiting from sustainability (https://news.un.org/en/story/2019/09/1047112).

This was depicted by the fact that 87 major companies, with a combined market capitalisation of over USD 2.3 trillion, over 4.2 million employees, and annual direct emissions equivalent to 73 coal-fired power plants, committed to setting climate targets across their operations.

These businesses include Burberry, Danone, Ericsson, Electrolux, IKEA, and Nestlé, and a number of these companies, further committed to “science-based targets”, meaning that their corporate emissions cuts can be independently assessed.

Anand Mahindra, who is the chairman of the Mahindra Group, an Indian multinational conglomerate with over 200,000 employees, stated, at the UN Global Compact Private Sector Forum, that more and more business leaders are waking up to the fact that sustainability and profit go hand in hand, and that climate action represents the biggest business opportunity of the next few decades.

Another significant move lies within the finance sector, where some of the world’s largest pension funds and insurers, responsible for directing more than USD 2 trillion in investments, have joined together to form the Asset Owner Alliance, which committed to moving their portfolios to carbon-neutral investments by 2050.

In a massive boost for climate action and sustainability, banks worth USD 47 trillion, and responsible for one-third of the global banking sector, committed to strategically align their business with the goals of the Paris Agreement on Climate Change and the Sustainable Development Goals (https://news.un.org/en/story/2019/09/1046982).

Also, a recently published report by the Global Commission on Adaptation, an international organisation led by former UN Secretary General Ban Ki-Moon, Bill Gates and World Bank CEO Kristalina Georgieva, asserts that by 2050 or sooner, climate change will reduce agricultural yields by 30 percent, deprive 5 billion people of sufficient water, cause USD 1 trillion in damages to coastal urban areas, and push 100 million people below the poverty line (https://bigthink.com/politics-current-affairs/climate-adaptation?rebelltitem=1#rebelltitem1).

More importantly, as the report emphasises, the world could realise USD 7.1 trillion in total net benefits. that by investing USD 1.8 trillion in climate adaptation between 2020 and 2030.

A new wave of investment from the private sector is being funnelled into cutting-edge technological solutions to climate change, from improving energy efficiency, to renewable storage solutions to alternative meat. Such investments come under the heading of environmental, social and governance (ESG) strategies, an increasingly popular investment segment (https://www.ft.com/content/fa7a4400-d940-11e9-8f9b-77216ebe1f17?desktop=true).

As indicated above, climate change affects a wide spectrum, and it is also up to the businesses to embrace this and ride the wave of sustainability.

The next United Nations Climate Change Conference, also known as COP25, will be held in Chile, from the 2nd to the 13th December 2019, bringing together governments, civil society, private sector and environmental organisations, to call for more ambitious actions to tackle climate change.