Feeling the ‘Paris Effect’ Yet? Watch for the Joiners, Not Just the Signers
With more than 175 countries signing — on the first day, this year’s Earth Day — the Paris Agreement within the United Nations Framework Convention on Climate Change, one might conclude the momentum building toward its ultimate success is irreversible. The truth is far from it. That’s why the collective voice of businesses that see how to make money by mitigating climate change are speaking up and are critical to the Agreement’s impact.
The question now is whether policymakers will recognize that clean energy is becoming the biggest driver of sustainable economic growth.
Many of the individuals who spoke out during a global press call this week, representing the likes of Google, IKEA and BSR, and non-profits such as Ceres and the “We Mean Business” coalition, articulated the increasingly some compelling metrics. The message: companies that choose to ignore this tectonic shift toward a lower carbon energy future do so at great peril to their bottom lines.
“Implementing the Paris Agreement will enable and encourage businesses and investors to turn the billions of dollars in low-carbon investments we have seen so far into the trillions the world needs to bring clean energy and prosperity to all,” said Mindy Lubber, president of Ceres, which works to mobilize investor and business leaders toward a sustainable global economy.
The Paris Agreement goes into effect once 55 countries representing 55% of global emissions have deposited their “instruments of accession” with the UN. Advocates are hoping that could happen as early as next year.
“Many business have helped kick-start this movement by settling ambitious targets, reporting emissions and scaling up low carbon investment,” the We Mean Business coalition says. But it is quick to admit policies are not changing quickly enough to keep the anticipated rise in the globe’s temperature to below 2 degrees Celsius.
As promising as the opportunities may be, there was still a palatable sense of urgency among most business leaders.
“We cannot waste time moving these programs forward,” Lubber said. “It’s time to put muscle behind the policy.”
If roughly 400 large institutional investors with more than $24 trillion under management working toward cleaner energy is not enough, one has to wonder how much it will take to keep the Earth’s temperature from rising more than 2 degrees. Lubber’s answer: $1 trillion every year through 2050.
“It’s now vital the 196 countries who adopted the Paris Agreement, especially the top 20 major emitters . . . (sign) the Paris Agreement to bring it rapidly into force,” said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, which represents more than 120 European asset owners and managers.
All eyes are on how many countries will formally accede to the Agreement. The more that sign, the stronger their message will be that economic opportunities await those investing in, executing strategies and/or developing technologies to improve energy efficiency and grow renewable energy.
While industrialized nations bear a big burden of global warming to date, Anirban Ghosh, the Chief Sustainability Officer of the Mahindra & Mahindra conglomerate in India, vowed the developing countries should look past who’s to blame and seize the opportunity. India gets it, he said, citing $17 billion already at work on cleaner energy among 20 industries there. He called their actions “critical” to progress “because we will be the engines of growth.”
Michael Terrell, Senior Policy Counsel for Energy and Sustainability at Google, strutted the more than 2 gigawatts of renewable energy it has helped develop as the largest corporate purchaser (he claimed) of renewable energy in the world, currently is 3.5 times more efficient with its digital operations than it was just five years ago. But he acknowledged mitigating climate change is something not even a few global companies can solve.
Terrell estimated the cumulative efficiency-clean energy challenge and opportunity – today – to be a mere $13.5 trillion. But Steve Howard, the Chief Sustainability Officer at IKEA, was quick to add, “If you want to build those industries in a big way, you need long-term stable policy.”
“It is a very bridgeable challenge. We need to get on with it,” Howard added.