The Business Case for Climate Action

Leading companies recognize climate change as both a risk and an opportunity.  A growing number are taking steps to strengthen their resilience to climate impacts, reduce their greenhouse gas emissions, produce innovative low-carbon technologies, and support policies enabling a smooth transition to a low-carbon economy.

Business Resilience

Extreme weather disasters like intense storms, floods and droughts are becoming more frequent, imposing real costs on companies and the communities they help support. Climate change threatens facilities and operations, supply and distribution chains, and access to electricity and water. It can also prevent employees from coming to work and customers from buying products or services.

C2ES research shows that more than 90 percent of companies in the S&P Global 100 Index see extreme weather and climate change impacts as current or future risks to their business. Many of these companies regularly plan for and report climate risks.  Many also see their resilience  efforts as opportunities to reduce costs. Conserving energy or water, for example, not only safeguards against interruption in supply, but also saves money.

Low-Carbon Innovation

C2ES also found that 75 percent of S&P Global 100 Index companies see a changing climate as an opportunity to become more sustainable. Companies across the economy are investing in renewable energy, setting and meeting emissions targets, incorporating a price on carbon into their business plans, and greening their supply chains.

Nearly 300 companies have set greenhouse gas emission reduction targets in line with climate science, and over 100 companies joined RE100, setting goals to be powered by 100 percent renewable energy. Companies are also making their products more sustainable and encouraging their employees and customers to live more sustainably. .

Addressing climate change as a business strategy also creates opportunities for companies to develop technologies, products, and services that mitigate climate change, and help customers adapt to the physical changes already underway. This creates a competitive business advantage, leads to economic growth, creates jobs, and speeds the transition to a global clean energy economy.

A recent analysis by Advanced Energy Economy, a national association of business leaders, found that:

  • Advanced energy is a $200 billion industry in the United States and $1.4 trillion worldwide. Over the past six years, the U.S. advanced energy market has grown 28 percent, with significant economic impact, now supporting more than 3 million jobs across the nation.
  • Globally, revenue from products and services that make buildings more energy efficientgrew at twice the rate of the global economy in 2016, to a total of $1.4 trillion.
  • Revenue for power generation technologies jumped 5 percent in 2016, led by solar, which capping a 30 percent surge over five years.

Our investments in innovation in this area are good not only for the environment, but also for our business and for the economy

Policy Support

A growing number of leading companies are also voicing support for national and global climate policies that help them plan for business growth. Many major U.S. companies joined full-page ads organized by C2ES urging continued U.S. participation in the Paris Agreement. Effective climate policies give businesses more certainty for short- and long-term planning and investments and help them better anticipate regulatory risks and economic opportunities. A patchwork of state and regional policies, on the other hand, ends up being costlier for companies to manage.

In the absence of coordinated policies on the federal level, companies are working with states and cities on climate and emissions initiatives. The efforts also contribute to greater resilience, community upgrades, and stronger emergency planning.

Stronger Business Efforts

Investors and other stakeholders are also motivating companies to climate action. Shareholders have passed resolutions calling on companies to measure and report their carbon footprints and to demonstrate that climate-related risks and opportunities are identified, assessed, and adequately managed. A growing number of mutual funds, which manage many Americans’ retirement investments, are voting in favor of climate change-related shareholder resolutions.

An industry-led task force in July 2017 recommended ways companies across multiple sectors can inform their lenders, investors, insurance underwriters, and other stakeholders about climate risks—and opportunities—for their businesses. State financial regulators as well as those in countries around the world are also encouraging companies to report climate change risks in their financial filings.

For examples of business climate action, see our Business Environmental Leadership Council