Sustainability in the corner office: Business and Climate Change

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.
 

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.

Business Leaders endorse Carbon Pricing, an end to Fossil Fuel Subsidies, and Science-based GHG Reduction Targets

BUSINESS LEADERS ENDORSE CARBON PRICING, AN END TO FOSSIL FUEL SUBSIDIES, AND SCIENCE-BASED GHG REDUCTION TARGETS : The Business and Climate Summit in Paris on May 20-21 was opened by the President of France, with the UN’s Ban Ki Moon in attendance, along with 2000 international business leaders, policymakers and investors. The final press release called on policymakers to leverage public funds and private sector finance towards low-carbon assets; to introduce carefully designed and predictable carbon pricing; and to eliminate fossil fuel subsidies.

Another business group, the Caring for Climate program within the UN Global Compact, issued a statement at the Summit  which commits them to carbon pricing, to set long-term targets based on science, and to speak up publicly against negative lobbying on climate action. As part of this effort, the Science Based Targets Initiative, led by the Carbon Disclosure Project and WWF, released Mind the Science,  and Sectoral Decarbonization Approach: A method for setting corporate emission reduction targets in line with climate science . Both reports are available here  .

Organizations will need Leaders with Sustainability Competencies

Sustainability Talent Management: The New Business Imperative is a consultant’s report released in April by Alberta firm Strandberg Consulting. Arguing that companies will need to reinvent themselves to secure their access to resources and the social license to operate and grow, the author reviewed the business and human resource management literature since 2005 to arrive at five competencies required for leaders to successfully cope with the sustainability issues. These are: systems thinking, external collaboration, social innovation, sustainability literacy, and active values. It concludes: “Professional associations, management education and business schools should consider their role in equipping future leaders with these competencies. HR, talent and learning and development professionals can identify gaps in their current approach to leadership development and build these leadership qualities to enable future sustainable and commercial success. Organizations can use these competencies to enhance the talent pipeline and develop the next generation of leaders and the organizational capacities to steer corporations toward a sustainable future for all”.

The Business Case for Adaptation

A report published by WWF and the Carbon Disclosure Project of New York is directed to the business community, and argues that a 2020 “science-based” emissions reduction target can be reached profitably in steps of 3% per year reductions. The report strikes an urgent note, emphasizing the benefits of the “latent cost savings” of energy efficiency, and quantifying the costs of extreme weather and the necessity of pricing of carbon emissions. The 3% Solution: Driving Profits through Carbon Reduction is at: https://www.cdproject.net/CDPResults/3-percent-solution-report.pdf

Case Studies of Emissions Reductions in B.C. Small Businesses

An April White Paper published by the Pacific Institute for Climate Solutions in B.C.  presents case studies of 11 British Columbia small businesses which engaged in greenhouse gas emissions reduction projects in any or all of four areas: electricity, heating, transportation, and waste management.  For each case, the report describes the initiatives taken and estimates the environmental benefits, financial costs, rate of return on the investment, and the projected payback time.  The report also provides insights from a broader universe of 700 small businesses, including the observation that employees are more motivated to participate in emissions-reducing activities if they are offered a share in the savings achieved.  Several recommendations are made to encourage small businesses to move to lower emissions practices.

LINKS

Are Small to Mid-sized Businesses the Catalyst to a Low Carbon Economy in B.C.?  at http://pics.uvic.ca/sites/default/files/uploads/publications/Small%20Business%20White%20Paper%20April%202013.pdf