Business moves on climate as the Paris Agreement gets closer to sealing the deal

The Paris climate agreement is getting closer to coming into force. This week 31 countries ratified the deal, including Brazil (the world’s 12th-largest greenhouse gas emitter), the United Arab Emirates and Bangladesh.

To become official, the deal requires 55 nations representing at least 55% of global emissions to ratify it. The current tally sits at 60 nations and 47.76% of emissions. Others are expected to ratify in coming months.

But outside of national action, businesses are shaping up to be leaders on climate. Alongside the UN General Assembly this week, representatives from national governments and businesses met in New York for the first post-Paris Climate Week.

Among an elite line-up of corporate heavyweights, including Bank of America, Philips, Apple and Siemens, all have made carbon-neutral commitments by 2020 or 2030. This means they will offset emissions that they can’t reduce.

There has been a convergence of political, technological and environmental understanding: a low-carbon economy is no longer a trade-off or threat. It’s an opportunity. And it is happening now.

New commitments

Identifying the urgent need for energy transition, 81 multinational companies have signed on to RE100, committing to 100% renewable electricity across their global operations.

Launched at Climate Week 2014 by The Climate Group and CDP, this initiative includes companies representing a wide range of sectors. Among them are Amalgamated Bank, Ikea, General Motors, Swiss Re, Goldman Sachs, BMW Group, Google, Aviva, P&G, Walmart, Nestle, Microsoft, SAP, Adobe, Bloomberg, H&M, Hewlett Packard, Novo Nordisk, ING, Unilever and Apple.

In addition to achieving 97% renewable electricity across its global operations, Apple is also working actively with its suppliers to increase renewable uptake. Apple is bringing necessary expertise and capability to help a number of its suppliers reach 100% renewable electricity for its products by 2018.

A new and complementary initiative, EP100, attracts companies that commit to a 100% increase in their energy productivity. This mirrors a global campaign calling for governments to double energy productivity. Led by The Climate Group and the Global Alliance for Energy Productivity, EP100 includes signatories such as Mahindra & Mahindra, Danfoss and Johnson Controls.

In its hospitality operations, Mahindra has already achieved a 46% improvement in its energy productivity. Its vice president of sustainability, Anirban Ghosh, is confident the firm will achieve 100% energy productivity improvements.

Danfoss is a global engineering company in heating, cooling and electric controls. According to John Galyen, president of its North American business, improving energy efficiency and energy productivity makes good business sense, both in cost savings and revenue growth.

These corporate voices are global, and their actions will flow through their global activities and supply chains. Australian corporations can be expected to follow these global trends.

Investors are also becoming leaders, increasing efforts to improve disclosure of climate-related risks. Leading disclosure groups met in New York with pension funds and asset managers to contribute to a climate disclosure task force of the Financial Stability Board.

This board, run by governors of national reserve banks and finance ministers, is working to develop a way for companies to disclose their exposure to risks associated with climate change.

The role of government

Public and private sectors have equally important leadership roles. The relationship must be symbiotic. In the same way that business leadership gives governments confidence to introduce ambitious policies, governments can also provide businesses with confidence through demonstrating leadership.

There is a resounding call for governments to provide greater certainty. Clear carbon and financial signals are needed to support major investments in the energy sector.

There have been some heartening moves in this respect. The United States, Canada and Mexico agreed recently to source half of their electricity from low-carbon sources by 2025, and to cut methane emissions from the oil and gas sector by almost half over the same period.

At the sub-national level, local, state and provincial governments are making decisive moves towards the end goal of net zero emissions. Alberta in Canada is home to 11% of the world’s oil reserves, but plans to peak emissions in the next five years while the economy continues to grow.

In Australia, Victoria, the ACT and South Australia have all committed to net zero emissions by 2050, with the latter supporting Adelaide to become the world’s first carbon-neutral city.

The next display of international leadership will be measured in November at the next UN climate summit in Marrakech, Morrocco. While previous meetings leading up to Paris were platforms for negotiation, the next will play a key role in implementing the deal. As we all know, actions speak louder than words.