One of the messages I consistently heard throughout the halls of the recent United Nations global climate change negotiations (COP 16) in Cancun, Mexico, was that businesses recognize the opportunity for less talk and more immediate action. Outside the official negotiation hall of COP 16, the business community focused on opportunities to cooperate and identify innovative ways to make money, save money and manage risk–all while decreasing their impact on the environment. Jose Maria Figueres, former President of Costa Rica and leader of the UN Information and Communication Technologies task force, summed it up in his remarks at the World Climate Summit: “The war on climate change is too big to be left in the hands of government.” This commentary was expanded on with a declaration from Lord Nicholas Stern: “The new industrial revolution has begun, and the business world is leading this challenge.”
More than 300 representatives of the corporate community, non-governmental organizations and government at the World Climate Summit, one of the largest business events to take place during COP 16 on December 4 and 5, discussed and debated how the business community can accept this challenge–and work with government to transition toward a lower-carbon, more resource-efficient economy.
Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change, stressed in her remarks at the summit that it is imperative for business to help counteract climate change. She challenged the business community to lead by implementing all energy efficiency measures that impact the bottom line, which she referred to as “non-regrettable” measures. She further urged business executives to seize opportunities along the entire value chain, invest in pioneering technologies to generate industry-wide transformations and push government representatives to follow these industry actions.
Consequently, leaders from some of the most respected global brands encouraged attendees to move forward and not wait for a global agreement on climate change. Virgin Group founder Richard Branson stated in his remarks at the summit that “climate change is the challenge of our generation, and we have to tackle it with business and financiers.”
Ernst & Young facilitated a session during the summit where leaders from industries such as IT, manufacturing and renewable energy discussed the action companies are taking in response to climate change amid regulatory uncertainty. This theme of corporate action was underscored by a recent Ernst & Young survey of global corporate executives that revealed that 70% of respondents planned to increase spending on climate change initiatives between 2010 and 2012, despite regulatory uncertainty. Participants at our session stressed that pressure from investors, customers and employees is increasingly driving sustainability investments to mitigate risks and capitalize on opportunities. These executives also believe that future analyst reports and investor decisions will be influenced by publicly available information about sustainability performance–elevating the economic importance of a company’s environmental footprint.
Regardless of the outcome of the official negotiations at COP 16, it is clear that businesses are assuming a greater leadership role in the transformation to a greener economy. While business leaders agree that government policy and intervention are critical to tackle climate change, the overriding theme of COP 16 was that business through government–not government through business–will yield the solutions necessary to succeed in this new, low-carbon economy. Ultimately, concrete action will be the strongest signal the business community can send to climate negotiators looking forward to COP 17 in Durban, South Africa, in 2011. This theme was echoed through the halls of the main convention center and at multiple off-site events.
The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP.
Steve Starbuck is the Americas Leader of Climate Change and Sustainability Services for Ernst & Young LLP.