{"id":19526,"date":"2016-06-02T20:48:48","date_gmt":"2016-06-02T20:48:48","guid":{"rendered":"https:\/\/www.un.org\/sustainabledevelopment\/?p=19526"},"modified":"2018-04-22T11:59:39","modified_gmt":"2018-04-22T15:59:39","slug":"paul-polman-climate-action-needed-for-business-growth","status":"publish","type":"post","link":"https:\/\/www.un.org\/sustainabledevelopment\/blog\/2016\/06\/paul-polman-climate-action-needed-for-business-growth\/","title":{"rendered":"Paul Polman: Climate action needed for business growth"},"content":{"rendered":"
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It\u2019s five months since the world\u2019s leaders adopted the historic Paris Agreement on climate change. In doing so they sent a powerful signal that the world wants to stay below 2 degrees warming and is on a path to decarbonise our economies.<\/p>\n<\/div>\n

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In practical terms this means an end to unabated fossil fuel use by around 2050, an end to the deforestation of tropical rainforests and a revolution in the provision of clean energy.<\/p>\n<\/div>\n

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It sounds incredible to a generation for whom growth and development have been synonymous with limitless exploitation of natural resources — from oil reserves to tropical forests.<\/p>\n<\/div>\n

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Yet the transition world leaders signalled to a sustainable, low-carbon economy is not only necessary and overdue – it is also underway. And those who fail to get on board now risk losing out on what I believe will be the greatest growth opportunity the world has ever known.<\/p>\n<\/div>\n

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Every day businesses and investors around the world are responding with new products and services, innovative solutions, reduced energy consumption – and they are reaping the benefits of doing so. Take Tesla, the manufacturer of electric vehicles. Demand for the Model 3 was so great that the company made $276 million in down-payments in its first weekend.<\/p>\n<\/div>\n

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A group of enlightened venture capitalists, investors and corporations, including Bill Gates, Jack Ma and Mark Zuckerberg, have declared an intention – under theirBreakthrough Energy Coalition<\/a> – to scale up investment in early-stage energy companies committed to a near zero carbon emission future. They did so in support of Mission Innovation – an initiative backed by 20 governments – from the USA to Saudi Arabia – with the aim of making renewable energy widely affordable around the world.<\/p>\n<\/div>\n

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Not surprisingly, investment in renewable energy hit a high of $286 billion in 2015, more than double that committed to fossil fuel power plants.<\/p>\n<\/div>\n

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Everywhere we look, partnerships are forming to bring the scale needed to take advantage of these new opportunities. The \u2018We Mean Business Coalition<\/a>\u2018, for example, representing 400 companies with revenues of $8 trillion and 180 investors managing $20.7 trillion in assets, have made nearly a thousand commitments to take action.<\/p>\n<\/div>\n

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The Consumer Goods Forum<\/a>, representing the world\u2019s largest retailers and consumer goods manufacturers, has committed to sustainable sourcing by 2020 of the key commodities that drive tropical deforestation, which represents nearly 15% of total carbon emissions.<\/p>\n<\/div>\n

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Over 55 companies have pledged to use 100% renewable power through theRE100 campaign<\/a> and are halfway towards the goal. And 150 companies have set emissions reduction targets in line with climate science through the Science-Based Targets campaign.<\/p>\n<\/div>\n

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Impressive as these are, they only tell part of the story.<\/p>\n<\/div>\n

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In fact, the NAZCA commitment registry<\/a> – developed by the Ä¢¹½ÊÓƵFCCC but named after the historic Peruvian landmark – counts no fewer than 12,000 commitments from non-state actors such as companies, regions, cities, and investors. Nearly half of these come from companies and over 440 from investors.<\/p>\n<\/div>\n

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While the investor number is smaller, the impact can be greater. Consider the fossil fuel divestment movement. Investors worth over $2.6 trillion – including the Norwegian sovereign wealth fund and two Californian state pension funds – have withdrawn support for coal or other fossil fuels investments.<\/p>\n<\/div>\n

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Energy sources, once the mainstay of high growth funds, are now shunned by mainstream investors. Peabody Coal, the world\u2019s largest privately owned coal company has filed for bankruptcy. It\u2019s not the first and I doubt it will be the last.<\/p>\n<\/div>\n

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The commitment of many businesses to lead the transition to a low carbon economy is already yielding results. According to analysis by Arabesque Asset Management, sound sustainability practices lower the cost of capital, enhance a company\u2019s operational performance and positively influence stock prices.<\/p>\n<\/div>\n

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The case for business to mainstream climate change and sustainability has never been greater. But just as business can lead this agenda, so governments must continue to set the right conditions in which to scale up efforts.<\/p>\n<\/div>\n

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And there is no issue with more widespread support than carbon pricing. Already, 1,000 companies have committed to set an internal carbon price; and the same number back the World Bank Statement on Carbon Pricing, calling on governments to set a carbon price.<\/p>\n<\/div>\n

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The momentum is building and the message is getting through. The IMF estimates that the true cost of fossil fuel subsidies – including externalities such as public health costs from air pollution and environmental damage – is close to $5.3 trillion per year.<\/p>\n<\/div>\n

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This is no longer a \u2018rich country\u2019 agenda, but an \u2018every country\u2019 agenda.<\/p>\n<\/div>\n

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No longer a \u201cleave it to the next guy\u201d problem, but a \u201cleave it to me\u201d opportunity.<\/p>\n<\/div>\n

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All around there is evidence of a world waking up to climate action as a driver of growth:<\/p>\n<\/div>\n