Businesses are taking climate action

Global climate talks underway in Paris have been built on a foundation of more than just national government commitments. “Sub-national actors,” such as cities, states, and companies, have been making their own climate commitments ahead of Paris, and that trend continues this week.

Just today, in a full-page Wall Street Journal ad coordinated in part by C2ES, more than 100 companies announced their support for a fair and strong global climate agreement and pledged to ensure a transition to a low-carbon, energy-efficient U.S. economy. These companies join a growing chorus of corporate voices for climate action. For example:

  • More than 150 companies, from Alcoa to Xerox, have signed the American Business Act on Climate Pledge and committed to reducing their environmental impact through steps such as cutting emissions in half, reducing water usage, and running on 100 percent renewable energy.
  • Bill Gates and other leading business entrepreneurs launched a multibillion-dollar public-private partnership to fund research and development of innovative clean energy technologies.
  • Last week, 78 global CEOs signed an open letter calling committing to action and calling on governments to implement carbon pricing.
  • This fall, 14 energy, tech and manufacturing companies with more than $1 trillion in revenues signed a statement organized by C2ES supporting a balanced and durable international agreement.

Why do more and more businesses care about climate change?

First, they understand the costs of inaction.

Don’t think business leaders have their head in the sand when it comes to the risks of a changing climate. A recent C2ES report found that more than 90 percent of the world’s 100 largest global companies are aware of their climate risks. The changes from a warming planet are affecting companies’ facilities and operations, supply and distribution chains, and access to electricity and water.

Extreme weather and other climate impacts are already imposing significant costs. Here in the U.S., we experienced eight severe weather events last year that, combined, caused more than $19 billion in damages.

Second, business leaders see the opportunities of a clean energy economy.

We’re already seeing a burst of entrepreneurial activity and innovation focused on evolving our energy and transportation sectors. Over the past 15 years, wind power capacity in the U.S. has grown about 24 percent and solar 69 percent annually. As deployment has risen, prices have come down. In some parts of the U.S., renewable generation is now the cheapest available option.

Clean opportunities extend beyond the electric power sector. Automakers are exploring lower-emission fuel alternatives beyond the electric car. Information and communication technologies are helping significantly improve energy efficiency, and financial companies are helping investors find new ways to finance low-carbon solutions.

Finally, business leaders want clarity and transparency about the response to climate change.

In the Wall Street Journal ad, companies urge the government to “support investment in the low-carbon economy at home and abroad, giving industry clarity and boosting the confidence of investors.”

A Paris agreement will provide a clear signal to markets to invest in clean energy and efficiency. Requiring countries to be transparent about their policies and implementation can help companies anticipate regulatory risks and economic opportunities. These efforts also could facilitate the growth and credibility of the global carbon market, which can be a critical tool for cost-effective emissions reduction.

As climate pledges from businesses show, we’re already moving in the right direction. A Paris agreement can ensure that everyone is doing their fair share and strengthen our will to to keep moving in the right direction.