Most telling: business leaders are making sure that their viewpoint is part of climate change policy discussions, especially leading up to and including COP21. Earlier this year, Citigroup bank announced that it would lend, invest, and/or facilitate $100 billion towards climate and environmental solutions, and more recently renounced investments in coal, led by its Environmental and Social Policy Framework document. Coordinated by the Center for Climate and Energy Solutions (C2ES), six major U.S. banks issued a Climate Action Statement in October, as did the CEO’s of ten major food companies, including Mars, General Mills, Unilever, and Kellogg, who issued a joint letter to world leaders. C2ES also released Weathering the Next Storm: A Closer Look at Business Resilience. More businesses signed on to RE100, a global business campaign committed to 100% renewable electricity. And on October 19, the White House announced that 81 U.S. companies, with combined revenue of $5 trillion, have now signed the “American Business Act on Climate Pledge”, launched in July 2015.
On October 8, at the Annual Meetings of the Boards of Governors of the International Monetary Fund and the World Bank Group in Lima, the United Nations Environment Program (UNEP) released the final report of the Design of a Sustainable Financial System Inquiry, titled The Financial System We Need, capping UNEP research stream that dates back to 2005. The documents produced include Fiduciary Responsibility in the 21st Century (September) , an analysis of investment practice and fiduciary duty in Australia, Brazil, Canada, Germany, Japan, South Africa, the UK and the US. “This report is a landmark piece in the global dialogue…By clearly defining the full remit of fiduciary duty and providing recommendations for how it should be implemented, this work serves as a definitive guide for any fiduciary unsure of the role that sustainability should play in their decision-making process”.
Corporate Knights magazine released the results of its annual ranking of MBA programs in October – unlike most surveys, it includes measures of social and environmental responsibility in the teaching and research at MBA programs around the world . As in previous years, the 2015 Better World MBA survey ranks Canadian universities at the top: for the 12th year, York University’s Schulich School of Business ranked #1, followed by Desautels Faculty of Management at McGill University, and Copenhagen School of Business as #3. And the latest Harvard Business Review ranks the “Best Performing CEO’s in the World” using a changed system: in 2015, long-term financial results achieved by the CEO are weighted at 80%, rather than 100% as before. The remaining 20% goes to Environmental, Social and Governance (ESG) performance.
The Clean Energy and Pollution Reduction Act of 2015, (Senate Bill 350) was signed into law on October 7th, 2015, requiring the state to generate half of its electricity from renewable sources by 2030, as well as double energy efficiency in homes, offices and factories. It also sets up a framework for an integrated electricity grid, and encourages utilities to install more charging stations for electric vehicles. The Natural Resources Defense Council called it “one of the most significant climate and energy bills in California’s history”. An earlier version of Bill 350 had been defeated – see the New York Times (Sept. 10) “California Democrats Drop Plan for 50 Percent Oil Cut”. Using regulatory authority instead, on September 25, the California Air Resources Board approved the Low Carbon Fuel Standard, which requires reduction of the amount of carbon generated by gas and diesel fuels by at least 10 percent by 2020. See “California Says ‘Yes!’ to Clean Fuels and ‘No!’ to Oil Industry Lobbyists”.
POLICY PRESCRIPTIONS FOR A DECARBONIZED ECONOMY
The Deep Decarbonization Pathways Project is a consortium of energy researchers from the 16 countries which are the world’s largest GHG emitters. In mid-September, the DDPP released a Synthesis Report and 16 country studies, outlining policy directions for long-term (to 2050). The Canadian report identifies six decarbonization pathways under three main themes: Deepening Current Trends, Encouraging next generation technologies; and Structural Economic Pathways, for which the report simulated oil price scenarios of $114, $80 and $40 per barrel in current dollars in 2050. The Canada report recommends “regulations that strengthen existing policies for buildings and transport sectors, a cap and trade system to drive abatement in heavy industry, and finally a complementary carbon price on the rest of the economy that returns revenues to reduced income and corporate taxes”. All DDPP reports will be tabled at the COP21 meetings in Paris in December.
All the major emitters have now submitted their Intended Nationally Determined Contributions statements to the UNFCC: Brazil on September 28, with a commitment to reduce GHG emissions 37% by 2025 and 43% by 2030, and a goal to eliminate illegal deforestation and restore 12 million hectares of land.
India, on October 2, pledged to reduce the intensity of its fossil fuel emissions 33 percent to 35 percent from 2005 levels by 2030, and to produce 40 percent of its electricity from non-fossil-fuel sources by 2030. India stated that $2.5 trillion U.S. would be required between now and 2030 to meet its goals; in a softening of its position, India did not make emission cuts conditional on aid, according to the New York Times, although a government official quoted by Inside Climate News quotes states that its efforts will be tied to the “availability and level of international financing and technology transfer”. On October 5th, Reuters reported “Germany offers India $2.25 billion for solar, clean energy”; Reuters also reported that India is opening one coal mine a month in a drive to double its coal production by 2020.