Low carbon is the new (old) challenge for business

Responding to climate change became less of a priority for both government and business in New Zealand.
KATY JONES
Responding to climate change became less of a priority for both government and business in New Zealand.

OPINION: Ten years ago, I looked on aghast as the United Nations COP15 process hit a brick wall. Now, more than ever, business must help lead the way to a low-carbon future.

In its time it was a revolutionary idea: businesses could be about more than just making a profit. Business could, and indeed should, help solve some of the world's most challenging problems; the deterioration of the environment, increasing inequality and the yet-distant threat of climate change. It could help governments and NGOs shape the laws and policies to best achieve these goals.

In 1999, a small group of businesspeople, led by Stephen Tindall and Michael Andrews, started the New Zealand Business Council for Sustainable Development (NZBCSD), now the Sustainable Business Council. Recently Rob Fenwick, another former NZBCSD chair, unearthed and sent me a copy of our annual review for 2008: Low Carbon. The new challenge for business, which seems as relevant as ever today – or a case of Back to the Future.

Since the global financial crisis the problem has not gone away. But we have lost ten years, during which global emissions have continued to rise.  Now, more than ever, business must lead the way to a low-carbon future, Nick Main says.
Since the global financial crisis the problem has not gone away. But we have lost ten years, during which global emissions have continued to rise. Now, more than ever, business must lead the way to a low-carbon future, Nick Main says.

In 2008, NZBCSD was involved in the development of the Emissions Trading Scheme which had just been passed into law. The Council had been represented on the Climate Change Leadership Forum (which provided independent advice to Ministers) and had made submissions to the select committee.

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Back then, the intent was that a national emissions trading scheme would link to global trading schemes under the successor to the Kyoto protocol. A level (or nearly level) playing field would be created for the impact of a carbon cost on business.

As there seemed to be plenty of time, we could allow for a certain amount of 'grandfathering' of current emissions as price at the margin would likely drive behaviour. The best price path to a low carbon future would be discovered by the markets, and the ETS would help guide that path for New Zealand.

Then the GFC happened, and many countries went into short term survival mode. COP15 in 2009, which was intended to create the successor to the Kyoto protocol, was a fiasco, and the world took another six years to get back on track. Responding to climate change became less of a priority for both government and business in New Zealand.

The problem has not gone away. But we have lost ten years, during which global emissions have continued to rise. We now know more about the long-term impacts of those emissions, and our experience of more extreme weather events makes it real to us in our communities. There is no doubt we are at a tipping point.

The need to act swiftly is somewhat tempered by the other foundation blocks of a sustainable society – the need to look after the economy, and social equity. One of the reasons COP15 failed was there were two conversations going on – one about emissions reductions, largely from the developed world, and one about equity and economic fairness, largely from less developed nations.

But now we need to be in a hurry. It is the time for rigorous analysis and brave decisions. We must escape the temptation to stay in our current way of doing things. Imagine a future when there is no coal in 10 years, no oil in 30 years and no natural gas in 50. You would do things differently. Prepare for that future.

So, all businesses should have a plan which is at least consistent with a 2-degree Celcius warmer future; aspirational plans should target 1.5 degrees. Broadly, this would mean zero net emissions in 2050 and aiming to take out around 40 per cent emissions by 2030. These are challenging targets. But unless we start on this work seriously now, we will have no chance of achieving them.

WHERE TO START?

The Zero Carbon Bill is currently before Parliament and businesses should be making submissions before 16 July to ensure this establishes a firm framework for reducing our emissions overall.

The first anniversary of the Climate Leaders Coalition is just around the corner. This group of businesses are at the forefront of taking action on climate change, and being part of the coalition is helping many businesses go further than they would alone. The EMBARK event on 24 July will help businesses accelerate their emissions reduction.

IF THIS STILL SOUNDS DAUNTING, THERE ARE MANY POSITIVES

The thought that business should be involved in the discussion of these issues and to be leading change is no longer considered revolutionary. It's becoming mainstream.

It is more widely accepted that business has a wider role in society than purely making a profit.

Disclosure of how business engages is becoming more expected, if not yet mandatory. Ethically sound behaviours are expected.

Although we have less time to put the handbrakes on the impact of climate change, there is still time to act.

Business was created by society to create prosperity. Business is also responsible for most of the world's emissions, and so has an important role to play both in transitioning to a sustainable low carbon economy and in enhancing the wellbeing of the community it operates in.

Nick Main is a former CEO and then Chair of Deloitte New Zealand, who went on to be the Global Managing Partner Climate Change and Sustainability for Deloitte. He chaired the NZBCSD between 2007 and 2009. He is now a Director of NIWA, Chairs the Westpac Sustainability Advisory Panel and the Middlemore Foundation and is a Trustee of the Sir Peter Blake Trust.

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