When CEOs and heads of state meet on September 23 at the UN Climate Summit in New York, two questions will guide the discussion:
How can company goals and investments match the level of action suggested by climate science?
How can business deliver clear messages to governments to develop strong policies?
At the summit, executives from major companies will be asked to make new commitments to contribute to national and regional action to curb global warming and minimize the economic risks that go with it. That means informing and supporting ambitious country-level climate change policies in advance of a pivotal UN climate meeting next year in Paris.
To do that, organizations including WRI, WWF, CDP, and the UN Global Compact are developing new guidance to help companies set targets to reduce their greenhouse gas (GHG) emissions based on what current climate science indicates is needed to minimize the risks of climate change.
Setting Science-Based Targets
Companies are invited to learn more, submit feedback, and road test a draft methodology for science-based target setting. This feedback will inform the development of the final methodology. More information is available at the project website.
WRI is contributing to two publications as part of the UN’s Caring for Climate business leadership initiative, and these will be distributed to participants at the New York summit’s Private Sector Forum. CEOs will receive a short summary of a new project that’s developing guidance for companies to set science-based targets to reduce their GHG emissions.
Companies—and the countries in which they do business—must set a path that matches the science. Small improvements to business-as-usual are not enough. Although some companies have set rigorous GHG reduction targets, by one count, only 5 percent of corporate sustainability goals are currently based on science.
Beyond their own goals for sustainability, companies can influence political will. Policy makers listen closely to CEOs and are sensitive to business views of economic risk and opportunity. Too often, governments hear only from companies protecting their status quo, not from others who recognize the need to create clear market rules and understand the costs of policy uncertainty.
But public expectations of companies are changing. General Mills and Kellogg’s, at the urging of Oxfam and consumers, recently joined the Business for Innovative Climate and Energy Policy (BICEP) coalition and committed to be leaders on climate change.
Encouragement for business to commit to climate action is also coming from international institutions—and from companies themselves. The World Bank and the UN’s Caring for Climate initiative, for example, are rallying private sector leaders to express support for a price on carbon emissions. Broad coalitions, such as We Mean Business, are also announcing and voicing private sector support for strong climate policy.
This kind of attention on climate leadership makes it increasingly important for business to deliver a consistent message to government. That includes a company’s indirect influences, such as trade associations that lobby on behalf of members. Recently Unilever and Microsoft opted to leave trade groups because of conflicting views on climate and energy policy.
Fortunately, there is now clear guidance on what companies can do to demonstrate responsible engagement on climate policy. CEOs at the climate summit will receive an executive brief based on the Guide for Responsible Corporate Engagement in Climate Policy. This guide clearly defines a way for companies to engage governments credibly and transparently on climate change issues and is the joint product of WRI and seven other major organizations (UN Global Compact, UNEP, UNFCCC, Ceres, CDP, The Climate Group, and WWF).
What CEOs and heads of state must keep in mind as they head into the climate summit is that any delay will have a price. They must resolve questions about how companies will set targets, value investments, and advocate for climate policy. Even just a few years’ delay could double the costs of action, requiring more than $1 trillion in extra investments. Now is the time to act.