14 Jun Business case for low carbon growth is now clear
As the climate change clock ticks louder than ever, more and more businesses are becoming part of the climate change solution. Two thousand business leaders met in Paris earlier this month at the Business and Climate Summit and agreed that the global economy could continue its focus on growth while addressing climate change risks.
The New Climate Economy report prepared by members of the Global Commission on the Economy and Climate demonstrated that protecting the climate and economic growth can complement each other. Throughout Europe, the United States, China and in a number of countries, Governments have announced initial commitments and implemented credible emissions reduction steps.
There are now more than 500 climate related laws worldwide, including those related to pricing emissions (eg. cap and trade policies such as California) and new air pollution regulations in China or renewable energy and energy efficiency policies in a number of US states. The issue is now longer whether we should transition-the issue is now the speed of the transition.
Investments will now need to be based on thorough climate and regulatory risk analysis, and further work is needed to increase the consideration of carbon asset risk in financial institutions. Financial regulators need to collaborate with banks to establish environmental due diligence standards and to examine how future climate scenarios could be incorporated into financial institutions’ risk models.
Innovation policy will need to be geared to a circular approach in order to spur new ideas and have real immediate financial returns. Companies should take a leaf out of Unilever’s book-they have saved $220 million by implementing a “zero waste to landfill” program.
History shows that change can occur faster than many think possible. Countries are looking to the G7 nations to provide leadership and best practice in how to accelerate the economic transition. They are also looking to these nations to commit to a global target of zero emissions by 2050.