Caring for climate: the business leadership platform

George Kell

By Georg Kell, Executive Director, United Nations Global Compact

Since its launch in 2000, the United Nations Global Compact has emerged as the world's leading voluntary corporate citizenship initiative. To date, more than than 3600 companies in over 120 nations have made a leadership commitment to integrate the Global Compact's ten principles in the areas of human rights, labour, environment and anti-corruption into their strategies and day-to-day operations. While much remains to be done, the Global Compact has contributed significantly to making corporate responsibility a top management issue, demonstrating that its strong moral case is compounded by an equally powerful business case.   

While the Global Compact, through its principles, covers a wide range of areas, the initiative has on occasion offered more specific engagement platforms to address critical issues, such as climate change. The environmental, social, political and economic consequences of man-made global warming are undoubtedly dramatic and daunting, raising the need for business leadership and early action  – particularly in today’s globally integrated world where the ability to compete is more and more linked to a company’s capacity to innovate and demonstrate viable solutions.

Against this background, the Global Compact – together with the United Nations Environment Programme (UNEP) and the World Business Council for Sustainable Development (WBCSD) – has developed "Caring for Climate: The Business Leadership Platform" to mobilize business action on climate change. Launched in July 2007, “Caring for Climate” is a voluntary action platform for Global Compact participants wishing to demonstrate leadership on climate change. A company’s decision to join the platform by endorsing the “Caring for Climate” statement (see Box 1) requires CEO-level support, strategic and operational changes within the organisation, public disclosure and ongoing public communication on related activities and performance.

 “Caring for climate the business leadership platform”
A Statement by the Business Leaders of the UN Global Compact

We, the business leaders of the UN Global Compact:

Recognize that:
1. Climate Change is an issue requiring urgent and extensive action on the part of governments, business and citizens if the risk of serious damage to global prosperity and security is to be avoided.

2. Climate change poses both risks and opportunities to all parts of the business sector, everywhere. It is in the interest of the business community, as well as responsible behavior, for companies and their associations to play a full part in increasing energy efficiency and reducing carbon emissions to the atmosphere and, where possible, assisting society to respond to those changes in the climate to which we are already committed.

Commit to:
1. Taking practical actions now to increase the efficiency of energy usage and to reduce the carbon burden of our products, services and processes, to set voluntary targets for doing so, and to report publicly on the achievement of those targets annually in our Communication on Progress.

2. Building significant capacity within our organizations to understand fully the implications of climate change for our business and to develop a coherent business strategy for minimizing risks and identifying opportunities.

3. Engaging fully and positively with our own national governments, inter-governmental organizations and civil society organizations to develop policies and measures that will provide an enabling framework for the business sector to contribute effectively to building a low carbon economy.

4. Working collaboratively with other enterprises nationally and sectorally, and along our value-chains, by setting standards and taking joint initiatives aimed at reducing climate risks, assisting with adaptation to climate change and enhancing climate-related opportunities.

5. Becoming an active business champion for rapid and extensive response to climate change with our peers, employees, customers, investors and the broader public.

Expect from governments:
1. The urgent creation, in close consultation with the business community and civil society, of comprehensive, long-term and effective legislative and fiscal frameworks designed to make markets work for the climate, in particular policies and mechanisms intended to create a stable price for carbon.

2. Recognition that building effective public-private partnerships to respond to the climate challenge will require major public investments to catalyze and support business and civil society led initiatives, especially in relation to research, development, deployment and transfer of low carbon energy technologies and practices.

3. Vigorous international cooperation aimed at providing a robust global policy framework within which private investments in building a low carbon economy can be made, as well as providing financial and other support to assist those countries that require help to realize their own climate mitigation and adaptation targets whilst achieving poverty alleviation, energy security and natural resource management.

And will:
1. Work collaboratively on joint initiatives between public and private sectors and through them achieve a comprehensive understanding of how both public and private sectors can best play a pro-active and leading role in meeting the climate challenge in an effective way.

2. Invite the UN Global Compact to promote the public disclosure of actions taken by the signatories to this Statement and, in cooperation with UNEP and the WBCSD, communicate on this on a regular basis, starting July 2008.

Due to the broad geographic spread of Global Compact participants and the multi-stakeholder composition of the Compact, “Caring for Climate” transcends national interests and responds to the global nature of the issue. It is our hope that the platform will become a leading voice of reason on pragmatic solutions to climate change.

Voluntary initiatives – and the idea of “making markets work for climate” - require appropriate regulatory frameworks in order to function. Therefore, “Caring for Climate” involves both a commitment to action by business and a call for governmental action. In a world where business interacts with government primarily at the national level, “Caring for Climate” has the potential to become a neutral platform for exchange between business and governments at the global level. More specifically, we hope that the platform will be used as a unique space for business-government collaboration in the context of major international dialogues, particularly those leading up to COP-15 in Copenhagen in 2009.

Companies taking action on climate
Within months of launching “Caring for Climate”, over 200 companies from around the world have endorsed the statement – including some of the world’s largest transnational corporations. Driving this global interest is an understanding that addressing climate change offers space for tangible value creation.

The global climate challenge is affecting every part of society, so “thinking inclusive and big” is essential. As renewable energy technologies come of age, business is challenged to make greater advances in energy efficiency and the introduction of cleaner technologies. Recently introduced examples of cleaner products and services (e.g. “Ecomagination” by General Electric, “EcoVision” by Philips, and “Eco products” by Sony) show the way in turning climate risk into business opportunities .

Conclusion
It is increasingly clear that responsible business can pay. Ignoring climate change implications and delaying proactive responses are not viable options if long-term financial success and societal benefits are to be assured. It is also true that a proactive and comprehensive response to climate issues will challenge established business practices. However, the alternative – not taking action – would certainly be enormously disruptive, through sudden, unpredictable shocks (perhaps to supply and demand), as well as longer-term effects.

Voluntary efforts can never be a substitute for government action; however, they can accelerate the process of solution-finding and inspire consumers, peers and policy makers to have the courage to face the climate challenge as early as possible. We invite companies that are committed to advancing climate change solutions to endorse “Caring for Climate”. Together, we will show that responsible business practices can have positive, lasting impacts for people and planet.

Further information on “Caring for Climate: A Business Leadership Platform” can be found on the Global Compact website (www.unglobalcompact.org), including the publication “Caring for Climate: Tomorrow’s Leadership Today” which provides examples of corporate leadership on the climate challenge.