Behind the scenes, businesses take climate action
It may seem that global politics will never align to respond seriously about climate change. But businesses see the bottom line and are acting accordingly. A new survey by the UK-based Carbon Disclosure Project finds that for the first time a majority of the world’s largest corporations have climate actions embedded as part of their business strategies.
Companies in the Global 500 such as Philips Electronics, BMW, Bank of America and Sony, among others, comprise the 68 percent of respondents to the survey who say they’ve placed climate change at the heart of their business strategies. That’s a big jump above the 48 percent reported in 2010. These companies are also saying they are reducing greenhouse gas emissions.
Why are many boardrooms now getting it? The survey attributes the rising consciousness around climate change to spikes in oil prices and energy costs as well as a recognition that investments in emissions reductions pay off in as little as three years. Energy efficiency projects in buildings, for example, can easily cut company costs.
â€œWe believe that the external costs of greenhouse gas emissions will become internalized into company cash flows and profitability,” said Steve Waygood, an asset manager at Aviva Investments in a press release.Â “Managing greenhouse gas emissions is therefore essential to delivering sustainable shareholder returns.”
Some companies are setting targets in emissions reductions, and most have bumped up oversight of climate change strategies to the executive level. The biggest surprise in the report is that the companies leading the way on climate change action also had higher shareholder value with double the average of total return than others in the Global 500 over the past six years. This could be a result of more general forward-thinking management, but planning for a future world under climate change is a reality that businesses would best plan for.
There’s one business sector that’s lagging in climate action plans. Only 55 percent of energy companies set emissions reduction targets.