Finance industry and business get behind low-carbon transition

low-carbon transition

Manuel Pulgar Vidal, Laurent Fabius, Christiana Figueres and Pierre Andre de Chalendar at the Business & Climate Summit. Courtesy of: Business & Climate Summit, 2015

A summit of businesses and investors in Paris has given a massive boost to momentum towards climate action and the global deal due at the end of the year.

Taking place as part of Climate Week, the Business & Climate Summit saw CEOs and Chairs from companies representing some of the biggest names in the global economy reaffirm their commitment to the transition from dirty fossil fuels to 100% renewable energies.

The meeting included thousands of CEOs and Chairs, including those of L’Oreal, RWE, Unilever and BNP Paribas, and shows companies can no longer ignore the warnings that climate change is bad for business.

Speaking at the conference, Secretary General of the United Nations, Ban Ki-moon said:

This is an important milestone on the way to the Paris climate conference in December. It shows that the engagement of the private sector that began at the Climate Summit in New York last September has continued. Business leaders are now in the vanguard of the movement to take climate action.

As government leaders reaffirmed the need for a complete fossil fuel phase out and energy transition, the growing business commitment to this call adds further momentum for climate action, while leaving those still fighting the transition increasingly isolated.

In an unprecedented mobilisation of over 6.5 million companies from 130 countries, business leaders joined the global call for a zero emissions future and called on policymakers to agree on carbon pricing mechanisms and a joint public and private sector fund for investing in low-carbon technology.

Jean-Pascal Tricoire, Chief Executive and Chairman of Schneider Electric and Chairman of Global Compact France said:

The difference between now and three years ago is that nobody in business really dares to say climate change is not happening. Companies have actually taken commitments on emissions reductions. With bold, clear and long-term climate policies to keep within the +2C threshold, business will create growth, jobs and continuous innovation on the way to a prosperous low-carbon economy.

Meanwhile, a meeting of insurers, asset managers and bankers saw the investment community get involved, as experts launched a new collective initiative to gather climate actions from 400 investors and further shift capital out of fossil fuel industries into the low-carbon future.

Stephanie Pfeifer, Chief Executive of IIGCC said:

From reducing emissions in their portfolios to investing in renewable energy and engaging with fossil fuel companies on climate change, investors are working hard for a low carbon transition. An ambitious global deal which sets a clear pathway towards a low carbon future would enable them to scale up these actions and go further.

The week’s events also saw a host of real-world commitments on climate change. AXA became the first global financial institution to shun investments in coal companies, following Credit Agricole’s announcement earlier in the week to end funding for coal mining, while BNP Paribas joined a host of banks pledging to measure and disclose their carbon footprints.

These companies follow in the footsteps of a host of other businesses already taking action to help drive the phase-out of fossil fuels and the renewable energy future, ensuring their business operations are shielded against the impacts of climate change.

Echoing calls of the Intergovernmental Panel on Climate Change and the The Global Commission on the Economy and Climate that climate change is bad for business and that the trade off between climate action and economic growth is fake, this week’s meeting further highlights the absurdity of those companies who continue to fight against the tide and sell their dirty fossil fuels as a solution to energy poverty.

The message to these laggards is clear: business-as-usual is no longer an option.

But with the World Bank warning the global economy will need $4.1 trillion of investment for the low-carbon transition, and with new warnings that fossil fuels are still subsidized to the tune of $10 million dollars a minute, there is still a way to go.

Businesses are now calling on governments to step up and commit to greater levels of public finance for the Green Climate Fund – in order to attract more private money and help speed up the ongoing low-carbon transition.

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