Why Businesses Must Help Break the Stalemate of Climate Talks

Why Businesses Must Help Break the Stalemate of Climate Talks

As the 17th Conference of the Parties of the UN Framework Convention on Climate Change approaches the end of its first week, progress at the conference in Durban, South Africa, has been limited.

The stalemate between countries looks likely to continue and centers on whether we can achieve, or meaningfully make progress toward, a new global agreement on climate change.

With three days until ministers arrive, it is reported that the philosophical differences remain evident on the second commitment period and the level of ambition.

"With key parties holding such strong bottom-line positions, we're definitely walking in a minefield here," said one negotiator.

The world urgently needs an agreed range of measures that will help to stabilize greenhouse gas concentrations. With the news that a new treaty may be put off until 2020 instead of being renewed next year, what else can be done if the world's political leaders cannot agree on international climate change policy quickly enough?

As companies create 70 percent of global greenhouse gas emissions, international policy and successful action on climate change will need to involve companies and their major shareholders if it is going to be effective. Companies therefore need to play their part to help countries transition to a low-carbon society by taking action on both climate change mitigation and adaptation.

Let us remind ourselves of the ultimate goal we are working toward. It is to achieve the transformative change needed to prevent dangerous anthropogenic climate change.

So, the crucial question is: What is needed to accelerate this action and create the conditions to facilitate systemic change? At a recent CDP event, financial, business and political leaders discussed this issue.

The answer from a business perspective involved a combination of:

•    Innovation both in terms of product development and the types of services businesses offer;

•    Strong leadership to help redesign new business models that are sustainable; and

•    Collaborative action by business, investors, politics and civil society.

Speakers agreed that innovation is absolutely crucial to bring about the transformation we need.

Ian Cheshire, CEO of Kingfisher Group, the third largest home improvement retailer in the world, stressed the importance of prioritizing innovation: "Business models are changing ... I think we're beginning to see a big innovation opportunity,"he said. "We certainly see a lot of growth and opportunity. The one thing I would say is that you're going to have to plan for it though."

Strong leadership was also viewed by participants as an essential ingredient to facilitate change and help redesign business models, so they value not only financial and human capital, but natural capital as well.

Peter Graf, CSO of SAP, captured this perfectly. "We need to enhance the way we look at our businesses," he said. "It's not just financial resources and human resources ... it's also water, wood, natural resources. That's the real transformation we see, but it takes business leadership to get it going."

Collaboration between business, investors, policymakers and civil society is also needed in order to achieve systemic change. It is absolutely imperative that any new agreement at Durban should take this into account and we should work towards this.

Speaking yesterday after an event at COP17 in Durban on Business Innovation in a Low Carbon Economy, CDP CEO Paul Simpson said, "Any new global deal must take into account the role of business. Business is responsible for 70 percent of emissions. Failure to achieve this goal will enter into the history books as the greatest failure in history and we're not going to allow that to happen. Now investors, government, business and civil society have to work together to find a way."

If the stalemate about an international agreement continues into the second week of the climate change negotiations, and if reports that a new treaty may be put off until 2020 are correct, then businesses and institutional investors should continue to act in order to bring about the transformation we need that will bring shareholder value.

Concept photo of climate change via Shutterstock.com.