The Business Case for a COP15 Solution

So, finally, this is it and here I am: Copenhagen, where more than 15,000 people from 192 governments, the private sector and the media have descended on Denmark's capitol city for the United Nation's Climate Change Conference, known as COP-15.

From a scientific viewpoint the goal is understood:  World leaders need to come together and agree on a way to reduce greenhouse gas emissions to avoid the worst affects of climate change. I do hope, however, that the COP15 discussions go beyond the scientific, to focus on the business imperative for companies to embrace the climate-change debate.

In the United States, there appears to be an understanding in the marketplace, realizing that it's about efficiency, competitiveness and innovation, rather than "just" trying to save the planet. That's how businesses become engaged.  However, a perceived lack of clarity around the future direction and concerns about operating on a level playing field pose issues for some companies and prevent them from being at their best.

Business is the key player when it comes to innovation and investing in technologies, such as those that can deliver a low-carbon economy. But without clear reduction goals and market mechanisms companies may hold back on investment, despite having the technology and the know-how to deliver the required solutions.

A clear reduction commitment as a result of the Copenhagen conference negotiations could well be the catalyst for levels of innovation and investment well above and beyond those currently exhibited.

As for the level playing field, in climate change terms this relates primarily to an international carbon market that ensures carbon price stability, as well as unified and reliable measurement, reporting and verification. This will enable fair competition and a meaningful comparison of companies' performances. A framework for a global carbon market and reporting and verification as a result of Copenhagen's conference would stimulate companies to drive the climate change agenda; competition and benchmarked performance are among the key drivers for any business to act.

I also hope that COP15 can help those who will develop future legislation and regulation in this area to bring additional clarity to the discussion. To be successful, COP15 will need to be clear in how it wants to deal with the necessary detail – such as standards around accounting, reporting and verification. Right now, much uncertainty exists in this area. Companies want to know what to do.

COP15 represents the next step on the journey.

Eric Israel, a New York-based managing director with KPMG LLP, the U.S. member firm of KPMG International, is the U.S. leader for sustainability and climate services. He also is a founding member of KPMG Global Sustainability Services and has more than 10 years’ experience in corporate sustainability services.

Click here for full coverage of COP15 from the GreenBiz.com and ClimateBiz.com teams, including posts from Copenhagen by Executive Editor Joel Makower and Senior Contributor Marc Gunther, and from dozens of guest contributors from the business world.

Photo by Neil Palmer, CC licensed by Flickr user CIAT - International Center for Tropical Agriculture.