Why businesses are in danger by missing the climate cuts window

Why businesses are in danger by missing the climate cuts window

Editor's note: GreenBiz Group's Jan. 14 webcast (Business in the Age of Climate Change) featured speakers (Ford's John Viera, WWF's Matt Banks and author Andrew Winston) who discussed the business risks associated with the closing climate change window. Read about what was discussed during the webcast here.

The window companies have to address climate change is rapidly closing, putting their operations increasingly at risk.

Despite Hurricane Sandy, a prolonged drought in the U.S., and several reports highlighting the need for urgent carbon cuts, companies are still failing to take action, Matthew Banks, senior program officer at WWF U.S. told the audience at the annual North American International Auto Show conference in Detroit.

Speaking at an event hosted by Ford and titled "Business in the Age of Climate Change," Banks said the U.S. private sector accounts for around 66 percent of the country's emissions, and would need to reduce emissions by around three percent each year to 2020 in order to align with the global goal of an 80 percent cut on 1990 levels by 2050.

He added that many pioneering firms, such as the the 30 companies that make up WWF's Climate Savers initiative, including Nike, Coca-Cola and Volvo, are delivering deep emissions cuts -- and have avoided 100 million metric tons of emissions since the program began in 1999.

However, Banks warned most businesses are failing to set emissions targets or make sufficient investments in energy efficiency and renewable energy, despite "a significant amount of savings to be realized." This is likely to result in businesses facing greater costs in the future as they are forced to deliver deeper emissions cuts and adapt to severe climate impacts.

Next page:  Cuts and innovation needed

"How quickly we amplify the reductions is really important," Banks said. "If [businesses] wait until 2020, we need to achieve an 8.7 percent reduction per year. If we wait till 2030 we're looking at close to a 95 percent reduction. So the window that we have to address the problem is closing very quickly. If we don't go after it right now we won't be able to hit the target."

Banks was echoed by environmental business guru Andrew Winston, who argued that droughts and storms such as Hurricane Sandy not only caused damage, but disrupted supply chains and put further pressure on already scarce resources. This forced commodity prices up, which in turn can have a measurable impact on companies.

"We have this issue about 'when is climate change going to be a material risk to the business?' By the time climate change was clearly a material risk to Seaside Heights New Jersey, the town was gone," Winston said. "We keep waiting for a clear signal -- [but] we're seeing it. This has happened already."

Winston added greater innovation was needed to make better use of resources, citing Adidas' move to swap to a waterless dye process after discovering the global apparel industry used an amount of water equivalent to the Mediterranean Sea every two years in color fixing alone.

"We need to switch what businesses, organizations and society is about and pivot to making sustainability as the goal of most businesses and working back from there," he said. "We need to think about how we use capitalism and the markets ... and compete to [solve the problems] profitably."

Will Nichols' travel and accommodation have been provided by Ford

This article reprinted with permission from BusinessGreen.com

Photograph of polar bear on ice floe provided by Jan Martin Will via Shutterstock.