Business responsibilities for climate change: U.S. Roundtable nods, U.N. sets a high bar

The U.S. Business Roundtable generated headlines and surprised reaction with the August 19th release of a new Statement of Purpose,  signed by 181 CEO’s of high-profile companies including Amazon, Walmart, Bank of America, Lockheed Martin, Morgan Stanley, UPS, and others. That statement redefines their shared, overarching corporate goal from “delivering value for shareholders” to  promoting “An Economy That Serves All Americans” – including by: “supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.” …“Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.”

The full Business Roundtable Statement on the Purpose of a Corporation, with signatories, is here ;  case studies of member corporations’ social responsibility initiatives are outlined in Building Communities, Meeting Challenges .

A higher bar for business

In contrast to the Business Roundtable statement, scant attention was paid to an international call for human rights and climate justice, released in July. The Safe Climate Report  provides a guide to the obligations of States and the responsibilities of businesses under international agreements and law, regarding the rights to life, health, food, water and sanitation, rights of the child, right to a healthy environment, and rights of vulnerable populations.

The Safe Climate Report, as well as the June 2019 U.N. Report  on extreme poverty and climate change by Philip Alston, are the subject of a September 4 article in The Conversation Canadian edition, “Climate change, poverty and human rights: an emergency without precedent” . The authors state that “The Alston report suggests that the only way to address the human rights dimensions of climate crisis is for states to effectively regulate businesses and for those harmed by climate change to successfully sue responsible companies in court. ….  “the Safe Climate report goes further…”

Specifically, the Safe Climate Report states:

“Businesses must adopt human rights policies, conduct human rights due diligence, remedy human rights violations for which they are directly responsible, and work to influence other actors to respect human rights where relationships of leverage exist. As a first step, corporations should comply with the Guiding Principles on Business and Human Rights as they pertain to human rights and climate change…. The five main responsibilities of businesses specifically related to climate change are to reduce greenhouse gas emissions from their own activities and their subsidiaries; reduce greenhouse gas emissions from their products and services; minimize greenhouse gas emissions from their suppliers; publicly disclose their emissions, climate vulnerability and the risk of stranded assets; and ensure that people affected by business-related human rights violations have access to effective remedies.90 In addition, businesses should support, rather than oppose, public policies intended to effectively address climate change.”  (page 19/20).

Legal obligations of States:

The discussion in this report is also highly relevant to any litigation against states or companies regarding climate change, as well as for the rights of Indigenous peoples and children.  Boyd concludes:

“A failure to fulfill international climate change commitments is a prima facie violation of the State’s obligations to protect the human rights of its citizens. As global average temperatures rise, even more people’s rights will be violated, and the spectre of catastrophic runaway climate chaos increases. There is an immense gap between what is needed to seriously tackle the global climate emergency and what is being done.

A dramatic change of direction is needed. To comply with their human rights obligations, developed States and other large emitters must reduce their emissions at a rate consistent with their international commitments. To meet the Paris target of limiting warming to 1.5°C, States must submit ambitious nationally determined contributions by 2020 that will put the world on track to reducing greenhouse gas emissions by at least 45 per cent by 2030 (as calculated by the Intergovernmental Panel on Climate Change). All States should prepare rights-based deep decarbonization plans intended to achieve net zero carbon emissions by 2050, in accordance with article 4, paragraph 19, of the Paris Agreement. Four main categories of actions must be taken: addressing society’s addiction to fossil fuels; accelerating other mitigation actions; protecting vulnerable people from climate impacts; and providing unprecedented levels of financial support to least developed countries and small island developing States.”

The Safe Climate Report  (formally titled The Report of the Special Rapporteur on the issue of human rights obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment)  was submitted to the U.N. General Assembly,  written by Canadian human rights scholar and U.N. Special Rapporteur David R. Boyd, whose 2012 book, The Environmental Rights Revolution: A Global Study of Constitutions, Human Rights and the Environment,  stands as a landmark study in environmental law.  The Special Rapporteur’s Report was informed by a consultation period in 2019 in which States and organizations were invited to participate – the few which did are posted here . (Neither  Canada nor the U.S. were among the countries which submitted).  Two noteworthy organizational submissions available are from Canada’s Ecojustice, and Our Children’s Trust (U.S.)  on the issue of intergenerational responsibility and youth. A separate report by Special Rapporteur John Knox discussed The Children’s Rights and the Environment in 2018, and it may be significant the  concluding sentence of the Safe Climate Report uses Greta Thunberg’s famous words,  “I want you to act as if our house is on fire. Because it is.”

Labour union voices at the Global Climate Action Summit

The Global Climate Action Summit (GCAS), which brought together the world’s politicians, business leaders, and civil society organizations in San Francisco, concluded on September 14 .  The final Call to Global Climate Action calls on national governments to urgently step up climate action, including by enhancing their UNFCC Nationally Determined Contributions by 2020.The GCAS final press release summarizes the many announcements and 500+ commitments that were made; even more comprehensive is  A Chronology of Individual Summit and Pre-Summit Announcements , in which Summit organizers list all important actions and documents, dating back to January 2018.  Plans were announced to monitor actions flowing from the Summit  at a revamped Climate Action Portal, hosted by the UNFCC –   focused  around an interactive map as the key to aggregated  data about  climate action by region and sector.

richard-l-trumkaLabour unions at the Summit:    Richard Trumka, President of the AFL-CIO, delivered a speech to the Summit on September 13, “Fight Climate Change the Right way” , in which he highlighted the passage of Resolution 55 at the AFL-CIO Convention in October 2017. He emphasized that the climate change/clean energy resolution was adopted unanimously…”with the outspoken support of the unions whose members work in the energy sector. That part is critical–the workers most impacted by a move away from carbon fuels came together and endorsed a plan to save our people and our planet….”

Trumka also spoke on September 12  at  Labor in the Climate Transition:  Charting the Roadmap for 2019 and Beyond , an affiliate event sponsored by the University of California Berkeley Labor Center, along with the California Labor Federation, California Building and Construction Trades Council, Service Employees International Union, IBEW 1245, the International Trades Union Confederation, and BlueGreen Alliance.   In that speech,  titled Collective Action and Shared Sacrifice Key to Fighting Climate Change,  Trumka cast the AFL-CIO climate record in a positive light, repeated the success of Resolution 55 at the 2017 Convention, gave a 100% commitment to fighting climate change, and stated: “…we must be open to all methods of reducing carbon emissions—including technologies some environmentalists don’t like.” He concluded: “When the movement to fight climate change ignores the issue of economic justice, or treats it as an afterthought, when we seek to address climate change without respecting the hard work and sacrifice of workers in the energy and manufacturing sectors whose jobs are threatened—we feed the forces who are trying to tear us apart…. If we don’t get this right, we could find that our democracy fails before our climate…as rising fear and rising hate converge on us faster than rising seas.”

John Cartwright

The Berkeley event also featured panels on Just Transition, chaired by Samantha Smith, Director, Just Transition Centre of the ITUC, and included Gil McGowan, President, Alberta Federation of Labour,  as a speaker, and a panel on Energy Efficiency  in buildings , which included John Cartwright, President, Toronto & York Region Labour Council (pictured right)  as a speaker.  Videos of  the Berkeley event are here  , including one of the Trumka speech.

ITF statement 2018 green-and-healthy-streetsFinally, as part of the main Summit announcements, the International Transport Federation (ITF) released a statement in support of the Green and Healthy Streets Declaration by the C40 Cities, which  commits signatory cities to procure zero emission buses by 2025 and to ensure that major areas of cities are zero emissions by 2030. (Montreal and Toronto are the two Canadian signatories).  The ITF statement,  Green & Healthy Streets: Transitioning to zero emission transport , is motivated by the benefits of lowering air pollution and occupational health and safety for transport workers, as well as the economic justice of providing transit opportunities for workers to commute to work.

The ITF and its affiliates commit to: “Working in partnerships with mayors and cities to ensure that the transition to fossil-fuel-free streets is a just transition that creates decent jobs, reduces inequality, and drives inclusion and improvements in the lives of working class and low income people. • Building partnerships with mayors and city authorities to develop and integrate just transition plans that drive decent work and social action, including labour impact assessments, safeguards and job targets for men and women workers. • Mobilising workers knowledge and skills to shape and enhance the supportive actions needed to meet the commitments in the Declaration. • Working in partnerships with mayors and city authorities to deliver a just transition to zero emission buses, including developing plans for relevant worker training.”

Other progress for workplace concerns  at the Summit:

Amid the announcements from the formal meetings, one new initiative stands out: the Pledge for a Just Transition to Decent Jobs, which commits renewable energy companies to ILO core labor standards and ILO occupational health and safety standards for themselves and their suppliers, as well as social dialogue with workers and unions, wage guarantees, and social protections such as pension and health benefits. The BTeam press release “Companies step up to Deliver a Just Transition”  lists the signatories, and also  quotes Sharan Burrow, Vice-Chair of The B Team and General Secretary of the International Trade Union Confederation, who states: “We will not stand by and see stranded workers or stranded communities.…  We have to work together with business, with government and workers. We can build a future that’s about the dignity of work, secure employment and shared prosperity.”  The BTeam press release also references  Just Transition: A Business Guide, published jointly by the B Team and the Just Transition Centre in May 2018.

Another announcement related to the workplace: 21 companies announced the Step Up Declaration, a new alliance “dedicated to harnessing the power of emerging technologies and the fourth industrial revolution to help reduce greenhouse gas emissions across all economic sectors and ensure a climate turning point by 2020.”  The press release   references “the transformative power of the fourth industrial revolution, which encompasses artificial intelligence (AI), cloud computing and the Internet of Things (IoT). In addition, the declaration acknowledges the role its signatories can play in demonstrating and enabling progress both in their immediate spheres of influence and “collaboratively with others— across all sectors of society, including individuals, corporations, civil society, and governments.”    Signatories include several established climate leaders: Akamai Technologies, Arm, Autodesk, Bloomberg, BT, Cisco Systems, Ericsson, HP, Hewlett Packard Enterprise, Lyft, Nokia, Salesforce, Supermicro, Symantec, Tech Mahindra, Uber, Vigilent, VMware, WeWork, Workday.

Business think tank calls for Low-carbon policies for Canada

The Conference Board of Canada acknowledged that Canada must institute a carbon tax and decarbonize its electricity system in its September report, The Cost of a Cleaner Future: Examining the Economic Impacts of Reducing GHG Emissions (free, registration required).  The report presents a range of economic scenarios, relying on modelling from the Trottier Energy Futures project, and focusing on three issues:  carbon pricing; eliminating oil and natural gas from electricity generation; and the investment of trillions of dollars in green technology. On the impact of carbon pricing, one scenario assumes a carbon tax of $80 per tonne in 2025, yielding an average annual cost to Canadian household of approximately $2,000, shrinking the economy by only 1.8%, and cutting employment by 0.1%.  The total economic impact is forecast to be small, assuming that carbon tax revenues are reinvested in the economy in the form of corporate and personal income tax cuts and additional public spending on infrastructure. Industries most likely to suffer from reduced competitiveness are chemicals, mining and smelting, and pulp and paper; and  “industries with a domestic focus and sensitivity to price changes, such as residential construction, will be hard hit”.

Negative press coverage of the report appeared in  “Carbon tax to shrink economy by $3 billion, hurt loonie, study warns” in the Financial Post. The Globe and Mail was more optimistic, with “Canada urged to bite the bullet on shift to low carbon economy” and an OpEd “Can Canada remain an energy superpower?”.   In the OpEd , Glenn  Hodgson of the Conference Board recommends public policy support for a low-carbon energy strategy so that Canada can become North America’s most efficient, low-carbon source of oil and gas, while building up the country’s expertise in a range of other energy services, including carbon capture and storage, nuclear, and energy storage technologies. Such an outlook coincides with two other Conference Board publications over the summer: Clean Trade: Global Opportunities in Climate-Friendly Technologies  and Canadian Green Trade and Value Chains: Defining the Opportunities (both free with registration).  These new reports are the product of the new  Low-Carbon Growth Economy Centre at the Conference Board of Canada.

Business and government gather at Climate Week NYC

Many publications and press statements were released to coincide with Climate Week NYC 2016, a gathering of businesses and government officials in New York City from September 19 – 26. A sampling brings some insight into business/climate thinking. For example,  General Motors  was one of several companies joining the energy campaigns of RE100 , a global initiative of companies committed to transitioning to 100% renewable power.  (A sister campaign, EP100, works with businesses committed to doubling their energy productivity) . GM’s stated goal  to  meet 100% of its electricity needs with renewable energy by 2050 includes about 350 facilities in 59 countries, including both manufacturing and non-manufacturing buildings .  The CEO is quoted as saying that GM wants to contribute to cleaner air  “while strengthening our business through lower and more stable energy costs.”  Further, in GM Details its  100% Renewable Goal  : “Renewable energy offers more stable pricing options than traditional energy sources like fossil fuel, reducing the price volatility caused by external threats like government relations and natural disasters. Wind energy is already price competitive with traditional forms of energy and we expect the price of solar power to continue to decrease as demand grows.” Related reading: GM’s 2015 Sustainability Report and its environmental blog, GM Green .

From CDP (formerly Carbon Disclosure Project) , Embedding a carbon price into business strategy  : based on responses from over 5,000 companies, the report states that 1,200 companies either plan to or currently place an internal price on carbon.  Why?  Could be the cost of capital, as signalled in the Forward: “As public pension funds, CalSTRS and AP4 have hundreds of thousands of members and stakeholders relying on the secure retirement future that we are here to provide in perpetuity—it is absolutely critical that we take action to guard against this risk [climate change]…..“As the momentum for full disclosure in this area increases, we will not only be looking at company emissions but also analyzing how climate risk mitigation is embedded within their corporate strategies. Those companies who show investors and owners that they take this issue seriously and have a plan in place to tackle it will enjoy a lower cost of capital in the future against those that don’t.”

Consultants EY and the UN Global Compact published a report, The State of Sustainable Supply Chains,    based on interviews with 70 companies.  From the introduction: “Over the past few years, sustainability has been added to the procurement and sourcing criteria for many companies. Workforce health and safety incidents, labor disputes, geopolitical conflicts, raw materials shortages, environmental disasters and new legislation in areas such as conflict minerals and modern slavery have contributed to the growing awareness of supply chain risks among customers, consumers, investors, employees and local communities.”…. Overall, the results of the study show that by improving environmental, social and governance (ESG) performance throughout their supply chains, companies can enhance processes, save costs, increase labor productivity, uncover product innovation, achieve market differentiation and have a significant impact on society.”   This report is complemented by the website:  UN Global Compact Sustainable Supply Chains: Resources and Practices .  

In October, CDP North America released a report discussing the “paradigm shift” in the importance attributed to the “total cost of ownership”, or life cycle of products.  With examples from the U.S. military and the IT industry, it concludes that “It has become a business necessity because it saves money, smooths operations, diminishes risk in supply chains and opens new business opportunities.”  See: A paradigm shift in total cost of ownership From procurement to product innovation:How companies are hardwiring sustainability across the value chain to future-proof their business.

 

Further Canadian Reactions to Paris COP21

The December Work and Climate Change Report  compiled early responses to the COP 21 Agreement. Other Canadian reaction since then include: Tides Canada, in cooperation with the Toronto Star, with a compilation of articles re COP21 , including “What’s next after the historic Paris climate change agreement?” by Tyler Hamilton  ; The Real test of Paris Climate Agreement will be how Markets and Regulators react (by Marc Lee) ; Success of the Paris Agreement will be measured by Policy progress here at home (Pembina Institute) ; Collaborative approach will be key to realizing Canada’s climate change obligations (Canadian Labour Congress ).  The Executive of the Toronto and District Labour Council published their Response , which announces their intention to publish and promote a “Greenprint for Greater Toronto” as part of Labour’s contribution to the fight against climate change, and also holds up model of the role of Environmental Representatives in unions in the U.K..

For business reaction, read “Canadian business leaders say COP21 agreement a good start, but only that” in the Globe and Mail (Dec. 21), based on the 4th Quarter C-Suite Survey  by consultants KPMG . 56% of executives agreed that   “Canada should be part of any global agreement to reduce greenhouse gases if it includes most of the world’s major economic powers”. When asked, in regard to your own company, “what policies would you most like to see the new Canadian government implement?”, only 8% included “address climate change”. The survey also surveyed attitudes to the Trans Pacific Partnership trade agreement.