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Guide for Responsible Corporate Engagement in Climate Policy

A Caring for Climate Report

This guide provides practical insights on why and how companies can provide constructive influences on climate policy. It is the output of a review and consultation on responsible corporate engagement, undertaken by the UN Global Compact in cooperation with UNEP, UNFCCC, WRI, UNGC, CDP, WWF, Ceres and The Climate Group.

Executive Summary

This report is not designed to make the case that climate change—or global warming—is the greatest threat facing the world today. Climate scientists from across the globe, as well as military and economic analysts, have already established the severity of the issue and the scale of the challenge.

And neither is this report designed to make the case that policy responses are needed, or what those policies should look like. More than 190 countries have already agreed—starting back in 1992—that a response to climate change is urgently needed. In 2009, countries further agreed to “take action” to limit warming to less than 2 degrees Celsius.

Instead, this report is designed to help companies inform and accelerate the policies most urgently needed to support a stable global economy. And it is designed to help businesses engage in national and international debates, with a view to contribute to political progress on reducing carbon dioxide (CO2) and other greenhouse gas (GHG) emissions, and adapt to disruptions in the global climate system.

Business support and policy endorsements are powerful. They provide trusted perspectives on the economic costs and benefits of policy options. They can also influence others within their industry, supply chain, or customer base.

In the 20 years since countries first recognized the need to act on climate change, many companies and industry groups have engaged in subsequent national and international policy debates. Some have taken defensive positions, protecting business-as-usual. Others have been constructive, looking ahead to the future of their industry and working with policymakers to create the policies needed to support a strong, low-carbon economy. Some have done a mix of both and many others have avoided political debates altogether, choosing to observe silently.

Among signatories to the UN Global Compact, a platform which brings companies together to ensure they align with ten universal principles , there is a mixed record on public policy engagement. Of the 1,700 companies that responded to the UN Global Compact’s Annual Implementation Survey, an annual online survey of Global Impact participants to identify developments related to corporate sustainability, approximately 60 per cent said they publicly advocate for action in relation to the Global Compact principles and/or other UN goals. However, only 30 per cent align traditional government affairs activities, such as lobbying, with their corporate responsibility commitments, such as reducing GHG emissions.

However, as part of their engagement in the UN Global Compact Caring for Climate initiative, a subset of 350 Global Compact signatories have made an important commitment, which the Caring for Climate Progress Report 2013 indicates 62 per cent of companies now fulfill. The commitment is to:

“Engage more actively with own national governments, intergovernmental organizations and civil society to develop policies and measures to provide an enabling framework for business to contribute effectively to building a low-carbon and climate-resilient economy.”

Business is doing more. And as countries debate domestic climate change policies and work towards a new international agreement in 2015, this report presents timely guidance for companies to weigh in constructively to the discussions. It draws on an extensive review of existing studies and guidelines, as well as candid interviews and consultation with experts from more than 60 organizations, including companies, academia, non-governmental organizations (NGOs), think tanks and government.

Guidelines for Responsible Engagement in Climate Policy

This report finds there are five core elements of responsible policy engagement in climate policy: legitimacy, opportunity, accountability, consistency, and transparency (see Figure 1). These five elements translate to three practical actions responsible companies can undertake around climate policy, which are:

1) Identify implications, influences and opportunities to engage.

Create an inventory—together with internal decision makers and external experts—of the company’s direct and indirect influences on climate policy.

2) Align words with actions, ambitions and influences (both direct and indirect).

Complete an internal review using a ten question checklist to ensure consistency and accountability in the company’s approach.

3) Report on policy positions, influences and outcomes.

Follow a simple three-tiered framework to report progress on the above actions for investors and other interested stakeholders.

A Call to Action

Responsible companies are already acting to advance climate change policies. Others can build new capacity or find a safe space to engage in this type of debate. Companies lending their voice to solving one of today’s most pressing global problems can set an example to others, demonstrating their leadership by following the actions outlined in this report.

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