“Climate change is no longer a far-off problem;it is happening here, it is happening now.”
———–Barack Obama, former president of the USA
In 2015, most of the world’s leaders met in Paris to agree on a new set of goals to tackle climate change. Political leaders, society, and businesses have seemingly realized the situation’s gravity and urgency, and many believe this is the turning point from our disastrous and almost suicidal past. Not all of us observe the direct effects of climate change daily, but most of us are alert that today’s world is quite different from how it was not so long ago. Today, there are fewer wildlife species, the seasons are warmer, and forests everywhere are burning.
We know this is a big ask. We’ve gotten used to doing things a particular way, and it’s going to take some complex changes to reach the important goals of the Paris Agreement on Climate Change. But, ultimately, it’s something we must do, and with the right kind of innovation and cooperation, we can get there.
Once again, leaders from all countries of the world will be reunited in Glasgow for the UN climate talks (COP 26) that define the how of the promises made in Paris. In August 2021, the most renowned scientific Panel of experts, The IPCC, recognized that we are on a trajectory of inevitable catastrophe. The Earth temperature is expected to overpass the 1.5 degrees of temperature increments that will sharpen sea level rises, melting polar ice and glaciers, heatwaves, floods, and droughts. We are in dire necessity of a paradigm shift. Present-day, that old tune about progression for prosperity’s sake is getting old. Governments haven´t reached or even set the trajectory to slow down their fossil fuel emissions (produced by fossil fuels). That is a fact.
Role of the private sector
The private sector plays a central role in our society, not just because we might be employed by one but also because we probably rely heavily on their products and services for better or for worse.
By 2030, we must reduce global emissions by at least 50 percent. And by 2050, we must be at net-zero – meaning we don’t release more greenhouse gases into the atmosphere than the earth can naturally absorb. When the issues differ from place to place, solutions can be hard to find, which is why we need a coordinated, global approach if we’ve any hope of getting to zero. Governments need to offer incentives for farmers to adopt new practices. Consumers can do their part by eating less meat, wasting less food, and supporting businesses that employ clean practices.
There are a lot of steps standing in our way to zero emissions. But there’s also a lot of work to do to adapt and prepare ourselves for the climate change that’s already underway. With the assistance of the private sector, better early warning systems can be created for impending floods, storm surges, and rising water levels. In addition, the private sector can play a pivotal role in building more energy-efficient homes and updating our infrastructure to accommodate clean energy. There have been considerable advances in wind and solar power in places like Germany and Denmark in just the last few years. Thanks to government funding, along with policies and incentives that have helped spark a competitive market for alternative energies, prices have dropped such that the Green Premiums on these energies are closing in on fossil fuels.
If you’re a CEO or business leader, be an early adopter of new clean energy technologies and impose your carbon tax on divisions that don’t meet your minimum internal standards. The private sector has to realize that anything they do to reduce their carbon footprint is a significant contribution, no matter how small.
Cut through the noise
For instance, French company BNP Paribas Asset Management (BNPP AM) exemplifies what the private sector can contribute and achieve if committed to sustainability and climate change. Following the Paris Agreement in 2015, it adopted a formal climate change strategy in 2016. Further, BNP Paribas Asset Management has adopted a comprehensive approach to integrating sustainable finance into its investment decision-making.
Their sustainable investment approach systematically integrates ESG issues in investment decision-making both as an ethical and moral consideration to promote a sustainable future. And the belief that it can help generate better-informed investment decisions and contribute to better risk-adjusted returns across its portfolios. This is demonstrated through the range of investment products and services the company offers, including the mainstreaming of ESG into all of its portfolios and its thematic and impact funds that cover multiple asset classes and geographies.
A key pillar of BNPP AM’s approach is the integration of sustainability into its stewardship and engagement practices: It engages on sustainability topics with both the companies it invests in and the governments in whose jurisdictions it operates. Finally, the firm does not see this as a solo journey. Instead, it works with other financial institutions through collaborative engagements and sustainability-related initiatives to create accountability and change within the financial markets.
BNPP AM is part of the Climate Action 100+ (CA100+) initiative. This collaborative engagement platform aims to use the collective voice of institutional investors to put pressure on companies to better measure, report, and manage their climate-related risks and impact.
There are only two choices for the private sector: do something or do nothing. Whichever path it takes, its actions will impact us and all generations to come. So now is the time for the private sector to act.
In our sustainable future, we’ve had to make some significant changes. The first has been to cut our carbon emissions by half every decade starting in 2020 so that in 2050, we’re at net-zero. As a result, we now have a fighting chance of staying below the crucial 1.5 degree Celsius threshold for global warming and avoiding the worst outcomes of climate change.
The private sector gets a bad rap. It can often be well deserved. There are just too many companies that neglect their responsibility to the environment, their employees, and the wider community. However, not all businesses are driven purely by short-term interests. Some have been changing the world for the better.
It’s not going to be easy, but it can be done by focusing on the right solutions. Many positive innovations already in place, such as solar and wind energy, have become more affordable in recent years. But more efforts need to be made to update our power grids and adapt our infrastructure to clean energy. There is also a need to put more funding and research into biofuels and carbon capture technologies. Ultimately, there is a need for a global commitment to zero emissions by 2050, with incentives for using and funding new technologies.
Importantly, there is a need to establish worldwide minimum standards on emissions, with more and better incentives for businesses that meet those standards and tax penalties for companies that don’t.
The Final Chapter
As a society and the role of the private sector within it, we find ourselves at a unique crossroads in history. Firstly, the private sector can actively and aggressively fight climate change for a sustainable future, or secondly, where the private sector does nothing and significantly worsens future generations’ lives.
Undoubtedly, if we stay focused, demand action, and put our resources toward the right technologies, we can accomplish this. With the private sector at the helm, it can create a sustainable future, but it will require significant shifts in how we do almost everything. Unfortunately, our shortsightedness has resulted in a wide array of problems. Today, it’s time to start thinking about long-term solutions and start making a positive impact on the well-being of future generations.
It’s not too late! If communities, governments, businesses, and organizations come together to act now, we can reverse global warming. The key technologies to reduce carbon emissions and promote their reuptake by the earth are already in place. They include renewable energy, sustainable farming, reforestation and recycling, widespread education programs, and innovative future technologies such as self-driving e-cars and ocean farming. If widely implemented, continuously developed, and subsidized when necessary, these technologies can save the planet. First, however, to protect our world, we need to understand the consequences of climate change. These are far more complex than they seem.
Gates, Bill (2021): How to Avoid a Climate Disaster: The Solutions we have and the Breakthroughs we need. Allen Lane.
Figueres, Christiana, and Rivett-Carnac, Tom (2020): The Future We Choose: Surviving the Climate Crisis. Knopf.
Senge, Peter; Smith, Bryan; Kruschwitz, Nina; Laur, Joe and Schley, Sara (2008). The Necessary Revolution: How Individuals and Organizations Are Working Together to Create a Sustainable World. Crown Business.
Wallace-Wells, David (2019). The Uninhabitable Earth: A Story of the Future. Penguin Books Ltd. https://ukcop26.org
https://www.ipcc.ch/report/ar6/wg1/ Sixth Assessment Report of the Intergovernmental Panel on Climate Change
About the Writers:
Romein is a (self-confessed) Pan-Africanist by heart. His diversified professional career spans many different sectors, i.e., local government, mining, consultancy, construction, advertising, and development cooperations.. Romein is the Head: Business for Development at PIRON Global Development, Germany (www.piron.global). Contact him via ([email protected])
Ebenezer is a Development Communication Specialist, MSME & SDG Enthusiast, Finance & Investment Nomad and a WriterPreneur. He`s Country Director (Ag) of PIRON Global Development GmbH, Ghana (www.piron.global). Contact him via ([email protected])
Monica is an internationalist and globetrotter of note. A true foodie chasing Michelin stars. Climate change and sustainability found her at the end of her studies and became her conviction, her creed. There is nothing more important than being conscious that this planet is given to us as stewards, not as owners. Contact her via ([email protected])