Business leaders brace for a disappointing climate deal in Paris

International business leaders are bracing themselves for an incomplete agreement at the UN Climate Summit in Paris this December, and are calling for agreement on carbon pricing, tighter collaboration between business and Government with respect to climate policies and a joint public and private sector fund for low carbon technology investments.

During this week’s Business Climate Summit in Paris, called following the UN call for the private sector to step up their actions to tackle climate change, Total CEO Patrick Pouyanne called for a pragmatic approach to the commitments made by countries in the lead up to December. In his opinion, we won’t be on the trajectory for 2°C and a lot of work will still be required to achieve it. He also called for convergence of the private sector and Governments and a mechanism to be put in place to improve that convergence.


According to the Carbon Disclosure Project (CDP), a significant majority of worldwide businesses will be frustrated if Governments don’t commit to sufficient emissions reductions in Paris to put the world on track for 2°C. More than 30 very well know companies including Ford, Nissan and Unilever have pledged to set long term science based climate targets which will be of sufficient scale to meet 2°C warming limit.

Large numbers of French companies were in attendance at the Business Summit, and Renault stated that not having appropriate regulations, framework and price signals following the UN talks would be totally reckless. Renault Director for Sustainable Development Claire Martin stated that they had already made the investments and have the technology ready to go on a larger scale.


Unilever CEO Paul Polman suggested that the private sector could play a significant role in closing the Governments’ shortfall in emissions reduction commitments, which he predicts will be significant as the Governments’ commitments will only add up to approximately 40% of what is needed. By mobilising the private sector they can work with Governments to close the significant gap.

Head of Corporate Sustainability at Novozymes Claus Stig Pedersen cautioned that business couldn’t tackle climate change without a strong political deal. The disappointment of Copenhagen in 2009 started a movement amongst businesses whereby they would go it alone; many businesses jumped all in but after some years they realised that they needed Government commitment. He stated emphatically that the solutions are there, they just need application. Regulation, a carbon price and ambitious goals from the UN talks in December will drive that faster.


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In recent blogs I have discussed the proposed actions a number of Governments are preparing in the lead up to Paris in December. Australian companies will expect the Abbott Government to show the leadership that other countries’ Governments are calling for, otherwise, based on Pedersen’s words the future is going to be a very difficult one to say the least. They may have the solutions and the will, however they need Government policies in place (that matches those of their international counterparts) in order to provide the certainty and assistance they require.

We all know that business decisions can appear brutal and ruthless, and it would be a travesty for any Australian businesses to lose their international competitiveness due in part to a lack of direction with regards to climate action on the part of their Federal Government, one that would do well to remember that those who own, run and work in Australian businesses vote for Governments, and can just as easily vote them out as vote them in.


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