Corporations obviously have a big role to play in tackling climate change – so big, in fact, that the collective actions of just 140 companies could get the world 65% of the way toward constraining temperature rise to 2°C.
In getting there, they would drive $5-$10 trillion in low-carbon investments and create 20-45 million person-years of employment.
That’s the conclusion of consulting firm PwC Sustainability, which begins its report saying, "2015 will prove to be a historic year, when the world is starting the transformation to bring our economies in balance with nature."
PwC evaluated the Low Carbon Technology Partnerships initiative, a joint effort of the World Business Council for Sustainable Development (WBCSD), International Energy Agency and Sustainable Development Solutions Network.
Over the last year, corporations like Unilever, Ikea, Ford, Heineken and Nestle developed a roadmap to decarbonization. Working groups have formed to scale development and implementation of low carbon technology solutions in these areas: advanced biofuels; carbon capture and storage; climate smart agriculture; energy efficiency in buildings; forests and forest products as carbon sinks; cement and chemicals; low carbon freight; and renewable energy. Targets have been established for each area.
140 corporations are currently on board, including Acciona, Novozymes, Royal Dutch Shell, Schneider Electric, Siemens, Statoil and United Technologies.
For renewable energy, the plan is to deploy 1.5 terawatts of new capacity by 2025 through procurement, establishing micrgrids and financing green bonds.
"Incremental change is no longer enough – we need a massive transformation across our societies, policies and economies in order to limit the rise in global temperature to under two degrees. The LCTPi is the vehicle for this change and it will deliver transformational low-carbon solutions that are good for the planet as well as being good for business," says Peter Bakker, CEO of WBCSD.
While the corporate sector would take responsibility for these actions, there must be supportive national policies for it to work, they say. And that’s what they are looking for from the Paris Climate Summit.
Almost All Big Corporations Involved
The latest report from CDP shows that 89% of corporations are actively reducing greenhouse gas emissions compared to 49% five years ago.
Impressively, 94% of companies have board or senior-level management responsibility for these initiatives.
And investors are finally catching on to the fact that the more aggressive companies are on cleaning up their carbon act, the better their stocks perform.
While the socially responsible investment community has been investing this way for decades, BlackRock – the world’s largest asset manager – is now advocating for this approach.
Since 2012, BlackRock says, climate leaders dramatically outperformed laggards, after analyzing CDP’s sample of 1850 companies. The top 20% of companies who cut carbon intensity the most outperformed the world stock market by almost 6%, while the worst 20% trailed 6%.
Rather than trying to choose the top companies, BlackRock suggests, investors should focus on "best of class" – the companies that lead their industry.
Meanwhile, the Rockefeller Brothers Fund, which made waves when it divested from fossil fuels last year, reports that hasn’t hurt performance at all. In fact, funds heavily invested in fossil fuels saw their performance decline significantly this year.
It turns out that 50 corporations produce 75% of the greenhouse gases of the 500 largest publicly traded companies, mostly in the energy, materials and utilities sectors.
Read our article, US Businesses Knee-Deep in Getting Emissions Down
Download PwC’s report, LCTPi Impact Analysis here:
Wonderful! Thank goodness! Thank you dear corporations that have agreed to this! May there be many more!