In many ways, 2014 was a year of preparations in the sustainable business community, as we look ahead to potentially world-defining moments in 2015: the adoption of the Sustainable Development Goals to replace the Millennium Development Goals, and the anticipated creation of a universal, legally binding climate-change agreement at the COP21 negotiations in Paris. Much of what happened in 2014 set the stage for real and shared action on climate change and on creating an inclusive economy, and we saw growing action around transparency and leadership, with business taking on an even larger role in global affairs.
I asked BSR’s executive team to share their thoughts on what defined 2014 when it comes to sustainability. Here are their insights.
Accelerating Progress on Climate Change
All of BSR’s leaders noted the increase in action on climate change as a key theme in 2014. The release of the Intergovernmental Panel on Climate Change’s synthesis report, which provided us with the most hard-hitting climate data to date, “underlined the importance of collective action,” said BSR Senior Vice President Eric Olson. As climate scientists released increasingly startling findings about global warming impacts, government, civil society, and business started to heed the call for collaboration and increased ambition on climate change.
On the government side, developments included the U.S.-China agreement and the EU commitment to cut greenhouse gas emissions significantly over the next decade, as well as the U.S. Environmental Protection Agency’s plan to reduce carbon emissions from power plants. These government actions point to growing acceptance that we must act on climate, raising BSR’s hope for a substantive climate agreement adopted by governments at the climate talks in Paris next year. The outcome of the COP20 meetings in Lima, however, reminded us that even as momentum builds among governments, business must demonstrate leadership when governments falter.
And in that sense, business stepped up this year, becoming a stronger—and more vocal—actor in addressing climate change. The private sector is more actively calling for regulation, particularly a price on carbon, and, like governments, companies are committing to carbon-emissions reductions of their own. This includes the RE100 commitment among businesses to switch to 100 percent renewable energy by 2020, which was launched at Climate Week NYC earlier this year.
Like business leaders, we have applied a renewed focus on BSR's climate work. This year, we published the first major report for BSR’s Business in a Climate-Constrained World program, through which we are working with companies, nonprofit organizations, foundations, and governments to build climate resilience through emissions mitigation and investments in adaptation. We also helped found We Mean Business, a coalition of organizations working with businesses and investors to advance a low-carbon economy. And at the BSR Spring Forum in Paris, we heard from business leaders eager to get to work on climate issues.
As companies increased their attention to climate issues, they also collaborated across sectors and found unlikely allies. For example, companies joined governments and civil society in the landmark New York Declaration to cut deforestation rates in half by 2020. And at the People’s Climate March, which took place during the UN Climate Summit and Climate Week in New York in September, CEOs from Fortune 500 companies took to the streets with hundreds of thousands of climate activists, nonprofit leaders, and concerned citizens. As journalist Jo Confino pointed out in a Guardian Sustainable Business article, “The idea of senior executives of major global businesses marching alongside communists, socialists, and anarchists would have been unthinkable even a couple of years ago.”
BSR President and CEO Aron Cramer reminded us that corporate commitments and cross-sector coalition-building, as well as support for low-carbon regulation, are crucial going into 2015. “Companies have the potential to unleash a wave of innovation in low-carbon technologies, creating new products and services, generating employment, reducing energy consumption, and increasing savings if the right policies are in place,” Cramer said.
Championing Sustainable Development
As we saw the momentum build on climate, another global agreement was taking shape: the post-2015 development agenda and the June launch of the “Zero Draft” of the Sustainable Development Goals, which will replace the soon-to-expire Millennium Development Goals. The Sustainable Development Goals’ Zero Draft included 17 goals tied to four categories: economy, society, environment, and global governance.
These aims closely track to BSR’s Business Leadership for an Inclusive Economy program, which we launched in early 2014 to work with business to build an economy that works for everyone by generating decent and empowering jobs, maximizing local benefits and opportunities in communities, and enabling access to essential goods and services.
The Sustainable Development Goals, which will include both goals and indicators to track progress, will set a universal vision for the next 15 years of global development, including how business can contribute. BSR Vice President Laura Gitman said that the new goals “will be especially influential because they involved a broader set of perspectives in the drafting, including strong input from the private sector.” When asked about her predictions for the new goals, Gitman added, “I expect the Sustainable Development Goals to provide a framework for corporate goal-setting and measuring impact, and an impetus for cross-sector collaboration.”
Embracing Transparency and Leadership
As we wrote in this year’s BSR Report, “We are living in a world characterized by radical transparency.” Companies that are not embracing transparency voluntarily may be forced to share this information anyway, due to stakeholder action or government regulation. BSR Vice President for Europe, the Middle East, and Africa Peder Michael Pruzan-Jorgensen cited the EU’s adoption of a law that requires large companies to disclose nonfinancial information—in other words, their social, environmental, and human rights impacts—as a key moment in regulated transparency.
BSR Vice President for Asia-Pacific Jeremy Prepscius said that this idea also applies to national governance issues, which are of rising importance to business. Trust—or lack of it—in government affects consumer perceptions of product safety and reliability, and of corporate accountability and environmental stewardship. Prepscius said that for business leaders navigating new markets, “building a deeper understanding of local markets and the relationships in them is important—whether they are markets refreshed by hope and new leadership, such as Indonesia, or markets mired in ongoing conflict and tension, such as Thailand, or Hong Kong.”
The sustainability events of 2014 point to a larger trend: growing business leadership on the global challenges that are defining our era. Companies are forging ahead, taking actions, and reporting out their goals and progress on everything from climate change to human rights, even when governments are not requiring them to do so. Pruzan-Jorgensen noted this shift: “The real change in 2014 was much more intangible; it feels like more and more companies are slowly adjusting to a new paradigm, where business must play a bigger role in society—including one that is not regulated. It is unspoken.”