Emission ambition: What does business action on climate change mean for investment, jobs and emissions?

Oliver Willmott, one of the authors of a new PwC report for the World Business Council for Sustainable Development (WBCSD), examines the prize at stake from business action to reduce emissions.

Our impact analysis of a new business partnership to cut emissions shows that major businesses are starting to adopt a similar level of climate ambition as governments. If it is successful in overcoming the barriers to action, this could redirect investment flows and have broader economic and social implications.

But to achieve this ambition businesses need to follow up plans with solid actions and scale up their efforts across whole sectors. And – crucially – they need governments to provide strong, clear policy incentives for low carbon investment.

Can business make a meaningful climate contribution?

We hear a lot about the need for an ambitious deal in Paris this December at the UN Climate Summit and what it means for business. But some companies are asking a different question: how can business contribute to meaningful climate action? And, how can they get real value out of it? Our new report for the WBCSD provides some answers – and some ideas on what businesses that want to understand the ‘new normal’ should think about.

Our analysis shows that some businesses have big ambitions.

The WBCSD’s Low Carbon Technology Partnerships initiative* is a business partnership with big ambitions. Our impact analysis, launched earlier this week, shows that:

  • It could cut emissions by around 25% from business as usual and get society 65% of the way to a 2 degrees emissions pathway.
  • It could channel $5-10 trillion of investment toward low carbon sectors of the economy and support 20-45 million person-years of employment.
  • It provides a platform for businesses to play a leading role in helping achieve the UN Sustainable Development Goals.

What does this mean for businesses that are considering climate action or wondering how it might affect them?

  • Major businesses are starting to adopt the same level of climate ambition as governments, but achieving the full potential needs strong government policy and real business action.

 

Our analysis shows that major businesses are starting to adopt the same level of climate ambition as governments in the lead up to COP21, as shown by our Low Carbon Economy Index (see charts). And, it suggests that an increasing number do not see a conflict between economic success and climate action – and that a stable climate is a key part of a productive business environment.

The LCTPi should be seen as an impetus rather than a fig leaf for government action. These reductions aren’t additional to governments’ actions. To realise their ambition, LCTPi companies have called on clear, stable and strong policy from governments that provides both immediate and long-term incentives to invest in low carbon technologies.

As Peter Bakker, WBCSD’s CEO, said on Tuesday: “We urgently need an ambitious climate agreement in Paris to set the policy framework that will enable us deliver on our mutual goals.”

But neither can businesses be complacent. To achieve this ambition, firms need to back up the LCTPi plans with solid actions, and for the LCTPi to scale up – drawing in more companies, and developing its action plans.

  LCTPi  graphs