Tomorrow — on Earth Day — more than 160 countries including the US will sign the Paris climate agreement. In advance of the signing, thousands of businesses are urging governments to enact policies that support a low-carbon economy, which they say presents a multi-trillion-dollar economic opportunity.
Yesterday the We Mean Business coalition, made up of companies, investors, business- and climate-advocacy groups, released an analysis of what the Paris agreement means for business. It says national climate plans under the Paris deal represent at least a $13.5 trillion market through 2030 — and that’s just for the energy sector in efficiency and low-carbon technologies.
In a press conference about how “The Paris Effect” is already benefiting business, Edward Cameron, head of policy at We Mean Business and lead author of the analysis, said the nearly 400 companies in the coalition have made about 900 commitments to climate action. He said the Paris climate agreement has had a “notable effect” on businesses, which are responding by procuring renewable energy, putting an internal price on carbon and implementing land-use practices that conserve natural resources, among other actions.
“Benefits are coming through for those companies,” said Carmeron, who is also managing director at Business for Social Responsibility (BSR). “Many of these companies are accruing an internal rate of return above average — close to 27 percent. We’re also seeing costs to those companies that are failing to take a leadership role.”
Additional business benefits to companies that act on climate change include compliance with future climate and energy regulation, first-mover advantages in low-carbon markets, more resilient operations and supply chains, and stronger reputations, according to BRS.
“If we look forward 10, 20, 30 years time or beyond, we will see Paris as the turning point between the carbon economy and the clean economy,” said Steve Howard, Ikea’s chief sustainability officer and We Mean Business board co-chair. “This was not just about small incremental actions. This is a systemic movement to decarbonize.”
At Ikea, this means “focusing our efforts where can we achieve big impacts in reducing carbon emission but do that in a way that increases value” for the company, Howard said. This includes investing in renewable energy: about 70 percent of Ikea’s power comes from renewable sources and the company had set a goal of reaching 100 percent. By COP21, when the Paris climate deal was reached, Ikea had also switched to selling only LED lighting in all of its stores globally.
The retail giant is also “looking deep into our supply chain to how we can chase out every ton of carbon,” Howard said, adding that “all of these things make good business sense. You can almost always construct a business case for chasing carbon out.”
At Google, which requires massive amounts of electricity to power its operations, this means investing in renewable energy. The company has been carbon neutral since 2007 and has pledged to power its global operations with 100 percent renewable energy. To date, Google has has committed to purchasing more than 2 gigawatts of renewable energy, which Michael Terrell, energy and infrastructure principal at the tech company, said makes Google the largest corporate purchaser of renewable energy in the world.
Terrell said Google is seeing “so many benefits,” from renewable energy installations and purchases “well beyond solving climate change — cost benefits, diversified fuel supplies, and it supports innovation and economic growth in all the regions where we operate.”
Earlier this month Google, along with fellow tech companies Amazon, Apple and Microsoft filed a court brief defending the Clean Power Plan, which they say will reduce electricity prices by stimulating more renewable investments and “long-term price certainty.”
In tandem with the We Mean Business report, 110 companies, including Ikea, Mars Incorporated, PG&E, Salesforce, General Mills, Kellogg Company, HP, and Starbucks, released a statement organized by a coalition of groups, including the nonprofit sustainability organization Ceres (also a member of We Mean Business), that calls on for “swift implementation” of the Clean Power Plan and related low-carbon policies. “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…” it says.
At the We Mean Business press conference, Ceres president Mindy Lubber said the Clean Power Plan will be crucial to the US meeting its commitment under the Paris climate deal. “Now we’ve got to put the boots on the ground and the teeth into the laws and the change into the companies and investments to make sure we make the Paris agreement a reality.”
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