Climate change poses the most significant threat of our times. The IPCC report, launched in August, highlights as a key finding the fact that governments cannot face the challenges of the climate crisis by themselves. It will require a more significant commitment from the private sector than initially thought and coordinated cooperation from different stakeholders to achieve the commitments recently discussed at Glasgow to reach the Paris Agreement targets.
COP26 was a challenging conference. Reactions range from optimism to despair, from “it’s not enough” to “It’s a step in the right direction.” According to Patricia Espinosa, Executive Secretary of the United Nations Framework Convention on Climate Change, the negotiations had not been easy. Still, parties have built a bridge that leads towards the historic transformation we must make to achieve rapid reductions this decade and ultimately towards the 1.5ºC goal. That emphasizes the need for cooperation and coordinated action between countries, organizations, companies, and individuals.
So, what is our role as individuals and, beyond that, within the organizations we work in and lead? As individuals, we need to be aware of the choices we make in our daily lives and understand how we can act within our communities and influence sphere. We can ask and demand action from businesses - however, we need to change our behaviors to influence their response. We can choose to use our purchases and invest our money to support organizations that are seriously committed to developing sustainable solutions. We can also demand action from the financial sector to invest and scale new and innovative solutions and use social media to track their progress and claim accountability.
And as part of organizations, we need to ask ourselves what our business can and is doing. It is essential to raise awareness, but organizations must go deeper to leverage business competencies and use them to their full potential.
Here are some ideas on how businesses can confront climate change:
1. Cooperate: build coalitions to enhance and scale the positive impact.
During Glasgow, several pledges were signed by private companies to support the Agenda on the debate. One of them, the “Agricultural Commodity Companies Corporate Statement of Purpose,” signed by the CEO of 10 major global agricultural commodity traders, recognizes the responsibility of the agri-commodity sector in climate change and commits to accelerating and scale-up progress to support global efforts in reaching net-zero emissions by 2050. These organizations are committed to building on shared efforts, working with governments, farmers, and other key stakeholders to accelerate sector-wide action and identify opportunities for public-private collaboration to catalyze further progress. That is an example of how organizations can work together to articulate change and improvement.
2. Show commitment: integrate sustainability as a systemic change.
Sustainable actions can be peripherical, but they will have a much larger impact if intrinsically associated with the organization’s core. When organizations can find ways to create and enhance processes, services, and products and claim sustainability as an integrated part of all it does, that is when the real value is created. That is the foundation to achieve the goals envisioned for climate transition.
3. Take the lead and use it as a competitive advantage.
According to McKinsey, the commitments launched at the COP26 will reshape the agenda for global business and, by building greater resilience, companies can improve their ability to maintain business continuity — which can be a source of confidence, not to mention competitive advantage. In other words, businesses can face climate action as both an opportunity or a challenge: it all depends on the strategies they decide to undertake.
4. Measure and progress report: transparency is key.
During COP 26, the negotiations on the Enhanced Transparency Framework were concluded, providing for agreed tables and formats to account and report for targets and emissions. Organizations need to be ready to enhance the measurement and disclosure of their information, being transparent and using their performance advantageously. Digital technology should be used as leverage.
5. Fund and invest in environmental innovation.
For the first time in a UN Climate Change Conference, financial institutions were encouraged to consider climate vulnerabilities in granting financial support. Protecting vulnerable communities is on the Agenda for climate transition and adaptation, as is the need to boost investments and financing for climate solutions. Also, at COP 26, nearly 500 global financial services firms agreed to align $130 trillion with the goals set out in the Paris Agreement - which reinforces the importance of this topic.
6. Make decarbonization profitable.
Organizations have the chance of developing solutions to enhance opportunities in new markets and build progress. More than 40 companies took the pledge of the Net Zero Carbon Building Commitment, pledging to take action to decarbonize the environment across their portfolio and business activities - which means a real need to deploy new offers.
7. Support the developing world.
Revised commitments were made to help and support climate transition for developing and vulnerable countries, with a renewed promise to meet the $100 billion initial commitment. Other commitments were also made to mobilize funds and investment for climate action solutions and the development of green technology and nature-based solutions, critical for sustainable progress.
8. Lead Responsibly and with moral conviction.
According to Professor and author Max Bazerman, moral leaders have an obligation to consider factors beyond profit maximization and to think about how they can change not only their own behavior but how they can influence the behavior of those whom they lead.
To summarize, here are five key takeaways for businesses to cooperate and support the COP 26 commitments and the path towards its goals:
- Focus on identifying collective needs and solutions to the climate crisis already affecting many countries
- Finance the development of new and innovative solutions
- Support developing countries with funds and knowledge transfer
- Reduce emissions and enhance sustainability on its portfolio and businesses processes
- Measure and report on their progress more transparently
The organizations that shift their efforts into that are, undoubted, the ones leading the way towards the future we all hope for.
Have a great and impactful week!
Natália Cantarino Féres
Researcher
Center for Responsible Business & Leadership
This Newsletter covers SDG 9 and 13.
This article refers to edition #117 of the "Have a Great and Impactful Week" Newsletter.
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