Climate Actions For Businesses - How Big Should These Be?

When we talk and act on climate action and the energy transition in emerging economies, the discussion can range from topics such as climate mitigation, adaptation, energy transition, financing, and business model innovation to next generation technologies. In this article, Biba Jasmine says that given the current debate and discourse around net zero and carbon neutrality, it is important to pause for a moment and reflect on whether companies need to realign their purpose to serve a more holistic set of stakeholders—including the environment— and leverage additional channels to demonstrate their commitment to more sustainable activities along the value chain. It stands to reason to ask what companies can—and must—do to make progress towards a low-carbon economy.

- Biba Jasmine

As the United Nations Climate Change Conference (COP27) concludes, businesses and other organizations should accelerate action to avert the worst threats of climate change. The urgency of the climate crisis comes at a time when the role of business in society is shifting from shareholder dominance to stakeholder capitalism.

The Intergovernmental Panel on Climate Change (IPCC) policy documents clearly state that climate change will have a direct impact on infrastructure and business investment. As people become more aware of this issue and governments respond to the impacts of climate change and the costs of adaptation measures, legislation will become more comprehensive and thorough. The Kyoto Protocol is the best-known attempt, and countries that have ratified it have pledged to reduce their carbon dioxide (CO2 ) emissions within a specified time period. Another more recent attempt to reduce carbon emissions is the 2015 Paris Agreement, but there are other circumstances in which policies are making progress.

Risk is the problem that requires attention. If the projected temperature rise occurs and productivity is affected by adverse working conditions, the International Labour Organization projects significant losses in employment and the economy by 2030. Nearly every industry is directly or indirectly threatened by climate change. According to a 2019 study, the United States alone could lose USD 520 billion from a global temperature increase in 22 sectors if a higher temperature scenario occurs.