This article is the third in a series on BSR’s new initiative, Business in a Climate-Constrained World. The first article described why business must take bold action on climate change. The second article described the changes that business must make to address climate change. In this third article, we explain how BSR will help companies across our eight industry clusters take ambitious action to build climate resilience.
The science is clear: We must hold global mean temperature rises to less than 2°C above pre-industrial levels to avoid unprecedented climate risks to society and business that result from temperature and sea level rises, increased intensity and frequency of extreme weather events, and changes in water distribution.
We must also recognize that climate change is already happening and threatens to halt (or reverse) the remarkable gains in prosperity achieved over the past generation, which has seen 663 million people—nearly 10 percent of the world’s population—move from poverty to at least basic levels of comfort and dignity.
The latest Intergovernmental Panel on Climate Change (IPCC) report on climate impacts, adaptation, and vulnerability paints a grim picture: “Observed impacts of climate change are widespread and consequential.” Describing climate change impacts as “severe, pervasive, and irreversible,” the report chronicles diverse threats to ecological systems that have significant implications for human systems, including widespread loss of livelihoods and homes, the undermining of food security and development, increased incidence of poverty and resource-related conflicts, threats to a variety of human rights, and heightened risks to public health, including fatalities.
The stakes for business could not be greater. Some estimates put the cumulative, global cost of climate-change impacts as high as US$4 trillion by 2030 if we continue on our current rate of greenhouse gas emissions.
Today, on Earth Day, BSR is launching a critical report, “Business in a Climate-Constrained World: Catalyzing a Climate-Resilient Future through the Power of the Private Sector,” to outline our new strategy to mobilize our business network, global reach, industry insights, and issue expertise in support of sustained business action on climate change.
A Moment to Combine Action with Ambition
The growing threats related to climate change demand a reappraisal of climate risk and a comprehensive strategy for resilience. Resilience has always been understood as the ability to manage and rebound from risks, but what if some risks are so severe that they breach thresholds that are irreversible? Under these circumstances, resilience must be redefined to include a balance between “avoiding the unmanageable while managing the unavoidable.” When it comes to climate, this requires action on two simultaneous fronts: aggressive emissions reductions and sustained enhancement of strategies that will help us adapt to the climate impacts that are already taking place.
The good news is that many businesses are already beginning to take action on climate change. According to CDP, in 2013, 84 percent of the Global 500 companies reported that they have emissions-reductions targets, and 75 percent reported that they already have reduced emissions in some areas of their business. Alongside business action, more than 96 governments from developed and developing countries have initiated climate policies, ranging from domestic laws and standards to emissions-trading systems and carbon pricing, that are changing the policy and regulatory environments in which companies operate.
The bad news is that this activity is not ambitious enough. Too many business leaders believe that climate action is impractical in an age of fiscal austerity and incompatible with the bottom line. Others are waiting for a silver bullet—either a new technology or a policy incentive from government—before they act.
Our new research confirms that we do not need to wait for a breakthrough. The tools and resources to take the required action on climate change are available today, which means business can act with urgency and ambition now.
BSR’s New Strategy: Business in a Climate-Constrained World
Our report details the three key elements of our Business in a Climate-Constrained World strategy: translation of climate risk, collaboration across business sectors and stakeholder groups, and stabilization of the climate system through a series of “resilience wedges” that BSR will create to help companies mitigate emissions and invest in strategies for adaptation.
- Translation: The nature of risk differs across geographies and across sectors, with most industries exposed to multiple and intersecting climate risks. As a consequence, a sophisticated and comprehensive reappraisal of risk is needed to ensure business success in a climate-constrained world. BSR will translate these risks across geographies and sectors to help companies go further, faster in their efforts to reduce emissions and build adaptive capacity.
- Collaboration: Tackling the global challenge of climate change requires more than the action of any one company, organization, or sector alone. Bold, collective action by all stakeholders, including business, will be needed to build resilience in a climate-constrained world. Business can use the transformational power of collaboration by working across industries to share lessons, pioneer new approaches and technologies, test solutions, and share costs and resources. We plan to foster enhanced climate collaboration through this strategy by creating an “architecture of participation.” In practice, this means exploring every opportunity to build cross-industry and cross-stakeholder partnerships in the pursuit of our goals.
- Stabilization: The core of our strategy builds on the climate “stabilization wedges” pioneered by Princeton University professors Robert Socolow and Stephen Pacala in a seminal paper from 2004. Their approach proposes solutions that are both meaningful and achievable using current technologies and operating within current political economy realities. We intend to build on their framework to identify appropriate “resilience wedges” for both emissions reductions and adaptation strategies across eight industry clusters: consumer products, food/beverage/agriculture, energy and extractives, information and communications technology, healthcare, financial services, transportation and logistics, and travel and tourism. On emissions reductions, we will seek to implement actual reductions in partnership with BSR member companies and government, philanthropic funders, civil society actors, academics, and multilateral organizations. On enhancing adaptive capacity, we will look for opportunities to strengthen corporate supply chains and increase the ability of communities directly affected by climate change to respond to and rebound from impacts.
Implementing Our Strategy
The strategy outlined in our report constitutes a call to action for business and partners from foundations, governments, and civil society to match the volume of activity on climate with a greater commitment to ambition. We invite you to join us to identify the resilience wedges across all industry sectors and to seed the innovation necessary to build a climate-resilient world.
BSR will work with member companies in three main ways to tackle the global climate challenge: We will provide industry guidance via the wedges approach, we will integrate new tools and content into our core sustainability service offerings, and we will expand our collaborative initiatives to help BSR members work with each other and with partners across sectors on areas from energy and transportation to supply chain practices and public policy engagement.
The Road Ahead
Catalyzing climate resilience will not be easy. Our global economy and the legitimate development aspirations of billions of people are heavily dependent on high-carbon practices. We must manage the transition to a low-carbon future in a way that recognizes this context and helps all the world’s people live prosperous, dignified lives within planetary boundaries.
Fortunately, we can do this. Every sector can make a contribution using existing technologies, policies, and processes. Over the coming months, we will call on our members and other partners to work together to complete a comprehensive and definitive inventory of appropriate wedges and to develop collaborative approaches to building resilience in a climate-constrained world.
If we are successful, by 2020, business leadership on climate change will contribute to effective programs that promise to hold projected global average temperature rises below 2°C above pre-industrial levels, and BSR members across our eight industry sectors will be taking steps to reduce greenhouse gas emissions and build adaptive capacity.
We invite you to join us to make this vision a reality.