December 10, 2015

A View from Paris: Business Stepping Up

This post first appeared at Sustainable Brands

The Conference of the Parties …COP21… the climate conference … or just “Paris,” as in “What’s going to happen in Paris?”

The last two weeks in the City of Light have been dedicated to defying terrorism and intolerance and moving the world toward a solution to climate change. Thousands of people are attending dozens of events, all swirling around the official negotiations of 190-plus countries trying to save the planet and the people on it. Most of the world’s elected leaders came together last week to kick things off, accompanied by a parade of dignitaries, including government officials, CEOs, and movie stars (or fun hybrids of multiple categories like Governor Schwarzenegger).

I spent a few days in Paris taking part in some business-focused conferences. Sustainable Brands asked for my thoughts and reactions when I returned. Summarizing what’s going on in Paris is impossible given the scale of activity: Every day, just for those interested in the role of business, there were multiple simultaneous, large conferences featuring heavy hitters from the public and private sectors.

But based on what I heard from people buried deeper in the discussions, and at the events I attended or had a role in (I was emcee and moderator at the UN Global Compact Caring for Climate Business Forum), here are my impressions of what’s going on over there. But keep in mind that, like the proverbial people in a dark room trying to describe an elephant they are touching, I’ve got only one small angle on it all. Here are some themes and ideas that at times contradict each other (it’s not a black and white world) …

Optimism for a real deal

The difference this year is palpable. My colleague Hunter Lovins told me at a dinner we both spoke at that while she knew Copenhagen would fail (in 2009), this year is different. Commitments from 185 countries coming into the negotiations were real and substantial. And the world seems convinced now, with very limited resistance to the idea that we must do something (besides some carping from oil giants, global petro-dictators, and the U.S. GOP). So expectations are high that a deal is coming in the next couple of days. That said, there’s some harsh reality that many are painfully aware of …

Realism about the deal (or, the difference between 1.5 and 2 degrees warming)

Everyone in Paris knows that the commitments will only get the world to a warming of 3 to 4 degrees Celsius, which is disastrous. But most seem to believe that we will accelerate carbon reductions and somehow get to 2 degrees. But I heard repeated reminders that even 2 degrees is inadequate for reasons both powerful and heartbreaking. At one event, the poet Kathy Jetnil-Kijiner explained what happens to her country, the Marshall Islands, if we reach 2 degrees warming. The islands, along with low-lying areas around the world such as significant portions of Bangladesh, will be underwater. The call from many is for a 1.5-degree target, a very tough goal. And yet, oddly in juxtaposition with this realism, I saw indications of aggressive thinking …

Ambitious discussions based in the hard science

The draft agreement the UN released a few days ago has some language about holding temperature to 1.5 degrees (Article 2.1.a). The draft a few days ago also includes an important entry that I believe is completely new to global negotiations: an actual date range – the years 2060 to 2080 – for when the world would need to reach zero carbon (see Article 3.1.c). Update: The latest draft yesterday was more vague on this point without a specific year.

Consensus on what we need from policy

A panel I moderated included the CEO of a major EU energy company (Jose Manuel Entrecanales from Acciona), the head of the UN Global Compact (Lise Kingo), the CEO of a major Swedish pension fund (Mats Andersson), and the Executive Director ofOxfam (Winnie Byanyima). These diverse views coalesced around a short list of policy needs: the end of fossil fuel subsidies, a carbon price (or as Entrecanales put it, the “end of indirect subsidies”), regulatory stability, “money on the table” to help people adapt around the world, and a commitment to communications that make the case and bring people along.

Concern about the fossil fuel industry and its workers

While there was talk about how people could lose their countries if we don’t do anything about climate, there was an oddly parallel theme that focused on concern about those who would lose out in a clean economy. At the Caring for Climate event, the Executive Director of UNEP, Achim Steiner, said we want to “minimize the number of losers in this transformation.” The Chairman and CEO of HSBC, Stuart Thomson Gulliver, added his view that we should “not leave fossil fuel companies behind.” Gulliver said clearly that the financial world should reduce flows of funds to the older technologies, but said we need “an orderly transition.” I understand the need to make everyone comfortable to keep things moving along – and I'm strongly in favor of helping those working in industries like coal that will go away - but I fear that the time for a gentle transition may have passed us.

Fantastic turnout of business leadership

The ambition of the negotiators is important, but given the role of business in making a low-carbon world happen, it was especially heartening to see how big the business turnout was, and how big the talk. Events were peppered with CEOs of many of the world’s largest companies (some usual suspects like Unilever’s Paul Polman andMarks & Spencer’s Marc Bolland, but also some relative newcomers like Avery Dennison’s Dean Scarborough and Kellogg’s John Bryant). These leaders came to talk and listen.

Many had already made big announcements leading up to the conference but they were restating them loudly – such as Google’s commitment to buy another gigawatt of renewable power (on top of the nearly 1GW it already has). And at the Caring for Climate conference, the Science-Based Targets initiative announced that 114 companies - including Procter & Gamble, Sony, General Mills, Kellogg, Pfizer, Avery Dennison, Kering, L’Oréal and Mars, among many others - have committed to set emissions-reduction targets in line with what scientists say is necessary to keep global warming below the dangerous threshold of 2 degrees Celsius. IKEA showed how it can go even further than it’s 100 percent renewable target (which it will reach soon) to reduce customers’ impacts – the retailer committed to go “all in” to push for transformational change and sell 500 million LED light bulbs over the next 5 years. Marks & Spencer and IKEA have also both been selling hundreds of thousands of solar systems to customers.

A different tone from EU companies

I was struck consistently by how different the EU leaders can sound than most in the US. Granted, these were climate conferences, and people were putting their best faces on, but it’s still amazing to hear CEOs like Polman and Bolland talk about existential threats. Or hear an exec from oil giant Statoil recognize plainly a fundamental transition in the energy business away from fossil fuels, support a price on carbon to accelerate the shift and say, “of course we need to stop fossil fuel subsidies.” We in America have our sustainability leaders, but not many that speak as strongly or recognize the scale of the challenge humanity faces.

A can-do spirit

Some business leaders talked about the substantial work it will take to build a low-carbon world – such as Google’s John Woolard describing the 1 to 3 gigawatts of renewables we need to build every day between now and 2040. But tough to do does not mean impossible. Nobody indicated that the transformation, or getting consumers all on board, would be easy, but they were not deterred either. Many noted the precipitous drop in the cost of renewables over the last 5 years. Leaders from utilities in the EU also talked about how they have integrated the intermittent sources from solar and wind into the grid – including how they handled a recent solar eclipse in Germany which forced 40 gigawatts of solar offline and back on in minutes. In short, a majority renewables grid is not only possible, it’s already happening. Finally, as Betrand Piccard, the man who is flying around the world in a solar plane, said, “The impossible always takes a little more time than possible.”

In total, the tone in Paris was balanced yet ambitious and realistic yet optimistic. I haven’t felt as positive about our potential for real change in a long time. In the quest for a sustainable world, this year has been special, and Paris seems to be a fitting end … and beginning.

(Andrew's new book, The Big Pivot, was named a Best Business Book of the Year by Strategy+Business Magazine! Get your copy here. See also Andrew's TED talk on The Big Pivot. Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @AndrewWinston)

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