Last month at BSR, we expanded our call for business leadership on climate change with the launch of our updated report “Creating an Action Agenda for Private-Sector Leadership on Climate Change.” All sectors must commit to sustained climate action if we are to limit global warming to 2°C, and companies will play a critical role in this. Manufacturers account for about half of global greenhouse gas emissions, either through industrial activity or through their products, including the vehicles, power plants, and other goods that power the global economy. Because of that, these companies have a particularly important role in reducing emissions.
Our 2014 climate report noted: “As an engine of innovation, business creates new technologies, products, and services that will catalyze a step change in efficiency…And business can take these innovations to scale to support change that will happen faster than if governments and civil society acted alone.”
As we detail in case studies in our 2015 report, many companies are already acting. For instance, many manufacturing companies have invested in new technologies and other innovations to reduce their greenhouse gas emissions. Examples, both from our report and elsewhere, include:
- CEMEX has set ambitious targets to reduce carbon emissions from its cement production by 25 percent per ton of cement (from a 1990 baseline) by 2015 and to reduce the emissions caused by its products over the full lifecycle of buildings and structures. The company has developed new products, such as insulating concrete forms that allow builders and developers to reduce emissions over the lifecycle of buildings, while also investing to reach a target of 35 percent alternative fuels by 2015.
- General Electric’s ecomagination initiative has invested US$15 billion to date to develop a portfolio of energy-efficient products, from aircraft engines, wind turbines, and optimization software to high-efficiency lighting and Energy Star appliances. Meanwhile, the company has reduced its own greenhouse gas emissions by 32 percent (from an adjusted 2004 baseline) through efficiencies and improved technology in its operations.
- Lockheed Martin is investing in alternative fuels such as biomass and tidal power, advanced energy storage, and other energy solutions, while reducing its greenhouse emissions 20 percent from 2010—en route to a 35 percent reduction by 2020.
- Tata Steel has invested in process efficiency and improved infrastructure to reduce its energy intensity 50 percent in the past 30 years. In 2013, for example, the company installed a waste-heat recovery unit expected to save 8,100 tons of carbon dioxide equivalent annually.
As with any business venture, there is risk and uncertainty. Some efforts may fail. Others may take a long time to generate a return on investment. Henry Ford went bankrupt twice before founding Ford Motor Company, and the Toyota Prius took 15 years from original concept to reach profitability.
The important point is that a set of sustainable technology investments will succeed. New products, new services, and new production techniques will be born. Companies that harness brilliant minds to develop new solutions are most likely to be industry leaders in the future. And thinking for the long term about sustainable technologies and the market opportunities they provide is vital to overcoming the challenge of climate change.