How businesses can boost zero carbon growth

Wind turbines erected near a smokestack that emits a thick cloud of smoke. The private sector will be a critical contribution to transitioning to green growth. Photo by: chriscrowder_4 / CC BY-NC-ND

After witnessing the international community adopt the Paris climate agreement, our team recently gathered to discuss work objectives for 2016 and beyond; one job clearly stood out: Helping our partner countries implement their Paris targets.

For the last two years, the United Nations Development Program has supported countries with the development of INDCs or intended Nationally Determined Contributions. Now, our support will shift towards helping countries translate the intended targets and associated mitigation strategies into concrete, actionable plans.

Since many of these plans address key economic activities, effective engagement of industry, finance and business will be a critical contribution in this process. Leading up to the climate change conference in Paris last year, we saw keen interest on the part of the private sector to mitigate the effects of climate change, which are already affecting business operations, and threatening global financial and economic stability.

Some of the world’s most influential companies, spanning the food, energy, mining, technology and industrial sectors, have launched a series of initiatives to advance the transition to a green growth strategy. Meanwhile the global divestment movement has gathered steam with more than 500 institutions pulling about $3.4 trillion out of fossil fuel-based investments.

Several public-private initiatives launched at COP21 also promised to inject massive amounts of funding into research and development, and to increase the uptake of renewable energy and energy efficiency.

Despite the enormous momentum and funding flowing into clean technologies, the changes that are needed to shift away from carbon-intensive processes will not happen as fast or as automatically as is needed to hit our ambitious targets.

Nor are the current commitments going to meet the goal of holding temperature “well below” the 2 degrees Celsius mark, which is widely regarded as the threshold for catastrophic climate effects. This means that our transition to green growth needs to happen fast — at all levels, in all areas.

This is where the private sector comes in.

The business community is uniquely equipped to contribute its vision and expertise to transforming the Paris agreement’s national climate targets into green growth opportunities. The largest share of mitigation measures have been implemented by the private sector, and that sector is again expected to assume the leading role in transitioning to a zero carbon economy after the Paris agreement. Whether you are a global energy corporation, a local waste company, a development contractor or a consulting firm, now is the time to start delineating your strategies for this transformative shift.

Companies can consider to get zero carbon economy:

Identify existing and/or potential climate-related risks and vulnerabilities on business operations and financial assets.

Strategically look for opportunities to achieve greater reductions in greenhouse gas emissions while also improving business opportunities.

Seek out information on relevant policy frameworks and incentives that could facilitate the low carbon transition. Indeed, many countries have already developed climate action plans for various sectors, which can be used as a starting point for concrete actions on the ground. Reconcile short-term actions and long-term visions for lowering emissions so that investments in low-carbon measures and practices are designed to improve productivity and market options.

For larger corporations and consulting companies: conduct a holistic review that includes every element down the supply chain.

For international business and development consulting companies: seek exchanges on experiences and insights with international development agencies.

For renewable energy and other service companies, determine strategies for underserved markets and actively communicate needs to policymakers.

Design strategies for a gradual transition to climate-sensitive processes.

Keep track of your carbon footprint or encourage your clients or suppliers to do so.

For our part, international development agencies have to work with governments to gain a deeper understanding of how to incentivize and inform the local business community. The creation of a systematic feedback loop — in which private actors such as global finance or development consulting companies can identify obstacles to green growth — could bridge the gap between policy and on-the-ground implementation.

Forging better linkages and improving coordination among all development actors can further help us reach a faster, smoother transition to a zero carbon economy. After all, international development agencies and bilateral donors are the glue that connects manifold development actors, including private actors.

There is also a need to better highlight the benefits of shifting economic activities towards more sustainable pathways. Today’s investments in green growth can not only lead to more efficient processes and savings, but can also represent an opportunity for business growth and economic stability in the medium term. In fact, those industries that are starting to gradually shift to low-carbon processes now will be better equipped to grow within the ever more stringent—but healthier — world of a zero carbon economy.

We already see such progress being made by the transportation industry, which is pioneering the introduction of electric vehicles, for instance, and in building and architecture – which is using innovative, energy efficient, climate smart designs.

Having some of the world’s largest international corporations and institutions commit to climate sensitive practices has set an important precedent. We now need the rest of the pack to join in and leave behind, once and for all, the economy that can no longer sustain us.

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About the author

  • Yamil Bonduki

    Yamil Bonduki is the manager of UNDP Low Emission Capacity Building (LECB) Programme, based in New York. This global programme provides technical and financial assistance to 25 countries around the world for the preparation of Nationally Appropriate Mitigation Actions (NAMAs) and Low Emission Development Strategies (LEDS). Yamil holds a master’s degree in City and Regional Planning from the University of California, Berkeley.