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Big Business Steps Up on Climate Change

Ceres President Mindy Lubber had the honor of standing side-by-side with Vice President Joe Biden as he announced the latest round of companies to join the White House’s American Business Act on Climate pledge. Companies are supporting the Administration’s efforts to negotiate a robust international climate agreement in Paris – and more action is needed.
by Mindy LubberForbes Sustainable Capitalism Blog Posted on Oct 22, 2015

On Monday, I had the honor of standing side-by-side with Vice President Joe Biden as he announced the newest round of dozens of major companies to join the White House’s American Business Act on Climate pledge.

Eighty-one companies, including big tech firms, global retailers, food makers, agricultural conglomerates and electric utilities, have now joined the pledge to cut their own greenhouse gas emissions, invest in clean energy and support the Administration’s efforts to negotiate a robust international climate agreement this December in Paris.

Collectively, these 81 companies employ over nine million people and have a combined market capitalization of over $5 trillion.  They operate in all 50 states, showing that climate change is not just a “blue state” concern.

Best Buy, General Mills, Dell, Disney, Cargill… these American business icons and many more (see full list) do not buy into the tired rhetoric that acting on climate change will wreck the economy and destroy jobs.

To the contrary, they see climate action as an economic opportunity that can spur new businesses and jobs – while also benefiting consumers.

As General Mill’s Jerry Lynch told the Minneapolis Star Tribune, finding ways to trap carbon emissions and keep them out of the atmosphere is “one of the big untapped opportunities” in agriculture.

And Best Buy’s Laura Bishop said that by selling Energy Star appliances, the electronics retailer has helped consumers save $70 billion dollars, while preventing 900 million pounds of carbon from being emitted to the atmosphere.

Not only is Best Buy selling energy efficient appliances, it’s energy cutting initiatives have achieved a 26 percent reduction in carbon emissions from its operations since 2009, and it has pledged to reach a 45 percent reduction by 2020 through increased energy efficiency and renewable sourcing.

Together these 81 companies’ climate commitments add up to $160 billion in clean technology investments, which are a solid contribution toward what Ceres calls the Clean Trillion or the additional $1 trillion of investment that the world needs every year to limit global temperature increases to 2 degrees Celsius.

They include investments such as PG&E’s $3 billion a year to modernize the electric grid to allow for better integration of distributed solar, energy storage, electric vehicles and other low-carbon technologies, and IKEA Group’s $2 billion investment in wind and solar to help the company meet its 2020 goal of producing as much renewable energy as it consumes.

There’s no denying that business leadership on climate change is mounting. Or, as Marc Gunther wrote in the Guardian, “Another day, another set of climate promises from big business.”

In late September, six major US banks pledged “significant resources toward financing climate solutions“ while calling on world leaders to reach a global climate agreement.  A few days later, the CEO’s of 10 global food companies joined together to call on world leaders to do the same, while pledging to redouble their efforts to cut their greenhouse gas emissions.

Exciting progress in the corporate and financial sector, to be sure, but do all these corporate actions add up to significant carbon cutting action?

That remains to be seen.

Some commitments, such as companies investing in entire wind farms are more robust than others.  Consumer attention to company pledges can also help ensure that companies follow through on their commitments. They should also be pressing companies haven’t yet made any pledges.

Volkswagen’s recent emissions fiasco is a stark reminder to all that in the digital era there is nowhere to run or hide when environmental pledges are less than they claim to be.

Clearly, however, voluntary actions by business alone cannot solve the problem of climate change.  Governments need to implement policies to incent deeper carbon cutting actions across all actors and all sectors of the economy.

We already know that the individual carbon cutting contributions offered by major countries toward an international climate agreement fall short of the emissions reductions needed to hold temperature rise to 2 degrees Celsius.

Contributions of “non-state” actors like businesses can help get us closer to the carbon reductions needed worldwide.

But companies can perhaps make the biggest contribution toward solving the climate challenge by lifting their voices to break through the logjam on climate action in the United States.

Some are doing that. Over the past year, Ceres mobilized 365 companies and investors across all 50 states to voice their support for the EPA’s Clean Power Plan, a carbon cutting measure for the electric power sector which is a cornerstone of the U.S. contribution toward the international climate process.

But to shift the debate in this country, companies need to press even harder. Ultimately companies need to speak more forcefully and collectively to convince our elected officials of the urgency for acting on climate change  and that together we can build a sustainable future that grows the economy, creates jobs and benefits consumers.

Read the post at Forbes Sustainable Capitalism Blog

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Meet the Expert

Mindy S. Lubber JD, MBA

Mindy S. Lubber is the President and a founding board member of Ceres, a non-profit organization that is mobilizing many of the world’s largest investors and companies to take stronger action on climate change, water scarcity and other global sustainability challenges. She directs Ceres’ Investor Network on Climate Risk (INCR), a group of 120 institutional investors managing about $14 trillion in assets focused on the business risks and opportunities of climate change. Mindy also oversees engagements with 100-plus companies, many of them Fortune 500 firms, committed to sustainable business practices and the urgency for strong climate and clean energy policies.

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