8 December 2015La Maison Champs ÉlyséesParis

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Rethinking Business: Climate ChangeCOP 21: An Unmissable Opportunity in the Fight Against Climate Change

As populations continue to grow and urban transformation gathers pace, key globaldevelopment challenges must be addressed if the needs of future generations areto be met. Limited availability of natural resources, the long-term impact of climatechange and the inevitable strain on public infrastructures and services, will all haveprofound implications for society.

Intelligent planning and greater collaboration between business leaders, policymakers and other key stakeholders will be critical to manage today’s social,economic and environment concerns and to build a more sustainable future.Businesses are increasingly conscious of the need to integrate social responsibilityinto their core operating strategies, but how can this practically be achieved andwhat should be prioritised? How can corporations operate sustainably, driveprofitability and enhance their corporate reputation while also creating value andimproving resilience against risk?

Financial Times Live and Coca-Cola Enterprises are delighted to present aseries of high level roundtable events designed to encourage open debate onthe latest sustainability challenges and to discuss the risks, opportunities andnew partnerships which are emerging as a result.

OVERVIEW

Rethinking Business: Climate ChangeCOP 21: An Unmissable Opportunity in the Fight Against Climate Change

Rethinking Business: Climate Change

The Financial Times, Coca-Cola Enterprises and the Prince of Wales’s Corporate Leaders Group gathered business leaders and senior policy makers during the 21st UN Climate Change Conference (COP21) negotiations in Paris, to discuss shared challenges and possible solutions to the issue of climate change.

The event was the third in the Rethinking Business series held by the Financial Times in partnership with Coca-Cola Enterprises, which explores the shared challenges facing the business community. It was chaired by Andrew Jack, Head of Curated Content at the Financial Times.

FROM COPENHAGEN TO PARIS

In the run-up to the COP21 talks in Paris, there have been a number of palpable changes in the attitudes from the parties involved. Major international institutions, such as the World Bank and the International Monetary Fund (IMF), are now starting to talk seriously about carbon pricing and, indeed, the potential consequences of not costing the commercial and social impact of climate change.

The enthusiasm of national governments is also evident, not only from the sheer number of Intended Nationally-Determined Contributions (more than 180 countries have now submitted INDCs), but in their very presence at the COP21. Following the tragic attacks of November 13th, any number of delegations might have elected to eschew the talks, citing security concerns; instead, political leaders from all nations descended on Paris.

This owes no small thanks to the hard work of the French government. Sandrine Dixson-Declève, Director of the EU Office for the Cambridge Institute for Sustainability Leadership, cited a “brilliant coup of diplomacy” by Foreign Minister Laurent Fabius, who spent six months bringing speakers and countries of differing wealth and backgrounds to the negotiating table. In addition, France’s record early delivery of the COP21 draft text was crucial in allowing for greater preparation, and thus greater involvement, by all concerned parties.

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THE INCREASING ROLE OF NON-STATE ACTORS

An important factor in the current debate is the changing attitudes of organisers and delegations towards non-state actors, and specifically the increasing recognition of the role of the business community. Bruno Berthon, Managing Director for Digital Strategy at Accenture Strategy, recalled of Copenhagen that “they told business: you have nothing to do with the particulars of decisions, your voice doesn’t count, if we are in trouble, then to a large extent it’s your fault”. He noted, however, that the culture of the Paris talks was far more welcoming and “from that standpoint, the change is dramatic.”

Increased commitments by the business sector – and the full range of non-state actors – to sustainability have contributed greatly to this. As François Moisan, Director of ADEME noted, the UN’s NAZCA database – which registers commitments to climate action by companies, cities, subnational regions, and investors to address climate change – now lists more than 10,700 commitments from various companies, regional governments, city councils, and others. Programme Director Nina Ekelund of the Haga Initiative pointed towards major corporations like IKEA and Volvo willingly giving support to make Sweden fossil-fuel-free by 2040. In addition, the on-going work of organisations such as the We Mean Business coalition and The Climate Group has provided a voice and a platform to companies seeking to join the fight against rising global temperatures.

Indeed, in the current political climate, one cannot overstate the importance of non-state contributors to the transition into a low-carbon economy. Gerben-Jan Gerbrandy, Dutch MEP for the Netherlands’ Democrats 66 Party, cited the recent French elections as an example of an electorate “voting for those who promise the past, instead of looking forwards.” For Gerbrandy, the fact that ‘change’ is increasingly troublesome to sell to an electorate “is an enormous concern. And the ability to effect change has shifted from the public sector to the private sector.” More than ever, business is able to move faster on this issue than politicians.

In addition to business, Sandrine Dixson-Declève pointed to two groups that will play a major role in the period following Paris. First, the faith community, in which notable progress has been made by Pope Francis encouraging the faithful to care for the planet in the same way that they might care for family or neighbours. Secondly, the military community, in which greater involvement in issues of sustainability is starting to occur, such as recognition of the fact that water crises stemming from climate change have been a key root of the Syria crisis.

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Rethinking Business: Climate Change

SUPPORTING CHANGE IN THE BUSINESS SECTOR

“Having business at the negotiating table is not something that will happen overnight,” as UN Global Compact’s Lila Karbassi acknowledged. However, the unprecedented number, scale and significance of pledges from businesses all over the world is, as she put it, “game-changing for the rest of the business community: the investments, the reallocation of capital, the tools that are being used for carbon pricing.”

A crucial part of this, as noted by Gerben-Jan Gerbrandy, is recognising that there is more than one ‘business community’. The majority of businesses still fail to act on climate change, and exhibit a lack of ownership of the societal problems caused by emissions and pollution. The ability of forward-looking businesses to bring their partners into the fold after COP21 will be vital in ensuring a bottom-up wave of support for the agreements, rather than the limited ‘top-down’ approach that Copenhagen effected.

Three things are key to persuading companies who currently fear a low-carbon, circular economy. The first is greater awareness of breakthrough technology. As François Moisan observes of renewable energy, new technologies led to a scenario in which “the cost was divided by six in ten years.” Following his personal involvements in the talks at Rio and Kyoto, he believes that, “all energy [intensive] countries are convinced that these new technologies are the markets of tomorrow. The jobs of tomorrow.” Countries like India and Brazil now look to encourage indigenous green technology innovation, with an eye on the lucrative green export markets of the future.

Secondly, unlocking finance for energy-intensive industries will ensure their ability to invest in new technologies, and additionally offset the number of potential losers and divestments that will follow from the reduction of fossil fuel use. Lastly, simplifying the often-complicated language used around COP, or utilising more business language, will encourage companies into the low-carbon fold. Michael Alexander, Head of Water, Environment, and Agriculture Sustainability at Diageo Plc, particularly noted of COP language, “We Mean Business has done a fantastic job of actually simplifying it. Companies don’t all want/have/need a COP expert, but want to understand how all companies can contribute, in our own small way, to We Mean Business.”

Paul Zollinger-Read, Chief Medical Officer of BUPA, spoke of the many barriers they had to overcome in moving into green practices. He noted that traditionally the health sector is not associated with climate change, apart from its role in solving the health problems that arise from heightened pollution and increasingly severe weather events. In fact, he said, the health sector was responsible for its own share of emissions, specifically from hospitals in both the public and private sector. In his opinion, it is important to rectify this and encourage “a shift from an industry that just patches people up, to one that helps people to be well.”

STRATEGY AND ACCOUNTABILITY

A serious debate remains, however, on the question of how contributors may be held accountable to the commitments they have made. Although François Moisan appreciated the number of commitments made through NAZCA, he felt that there was “no process of monitoring [it]”. Specifically, he noted that there needed to be a system to verify agreements and to decrease the emissions produced by businesses through investment in more energy efficient processes. Bruno Berthon, however, felt that it was a positive move that NAZCA does not monitor any more closely than verification of commitments, and that there was value in the bottom-up style used to approach the gap between the existing scenario and desired scenario.

Chris Hood, President of Europe for Kellogg Company, summarised the importance of finding a balanced system of accountability. He believes that making commitments drives action, which encourages further and larger commitments. Specifically, he notes that “it’s important, in the context of an agreement, to have international verification,” while also questioning the helpfulness of holding companies to account over missed targets. Such ‘shaming’ could discourage bolder commitments or encourage “small, incremental ones that they know they can deliver, because they’re afraid of being punished.”

Indeed, as Sandrine Dixson-Declève confirms, it is vital to avoid letting ‘perfect’ be the enemy of ‘good’. Such attitudes could deter companies from joining the low-carbon cause, or contribute to the arguments of fossil fuel-lobbyists and backwards-thinking businesspeople who remain opposed to positive change.

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Rethinking Business: Climate Change

THE NEW COLLECTIVISM, A TIPPING POINT?

A number of fascinating changes to the global economy are occurring. François-Michel Lambert, Deputy of Bouches-du-Rhône for Europe Ecology – The Greens, sees the emergence of a circular economy already in place through the ‘sharing economy’ created through companies like BlaBlaCar and AirBnB. Rather than relying on linear economics of production, storage and retail, the digital revolution has generated companies with no ‘stock’ themselves, instead facilitating users to become productive, efficient employers of their own resources.

Sandrine Dixson-Declève sees these changes as a ‘new collectivism’: not the top-down economics enforced by communism, but a series of bottom-up changes in individuals’ thought processes, creating a realisation amongst consumers that they need not own everything. Occurring in tandem with this is a new wave in entrepreneurial activity. This is found not only in new enterprise. Indeed, politicians and non-state actors alike must constantly re-invent themselves, in order to match new trends and economic indicators which will doubtlessly arise as the world is re-wired to focus beyond GDP and profit.

Whether this change in business culture has yet resulted in a tipping point for the industry remains an area for debate. Whilst some such as Chris Hood and Sandrine Dixson-Declève would agree with that a tipping point has been reached, others disagree. Gerben-Jan Gerbrandy, for example, notes that whilst many businesses are looking to change to a low-carbon business model, there still exists a political stalemate, in which European and US anti-climate lobbyists argue against making any major strides in sustainability until the other side does the same. Other commentators note that although Europe is adapting to the requirements of sustainability and eco-friendliness, this trend is not as prominent elsewhere. Ultimately, it was acknowledged that a positive Paris agreement would be decisive in ensuring that this tipping point was reached going forwards.

CHAIR

BIOGRapHIES

Andrew JackHead of Curated ContentFinancial Times

Andrew Jack is Head of Curated Content at the Financial Times, overseeing products including FirstFT, a daily global briefing of the best news and analysis from across the web. Before this he was Deputy Editor of the Analysis section of the FT since 1990. He was previously Pharmaceuticals Correspondent, Moscow Bureau Chief, Paris Correspondent, Financial Correspondent, General Reporter,

and Corporate Reporter. He authored Inside Putin’s Russia and The French Exception. Mr Jack led the Financial Times’ coverage that won the 2011 Communications Award of the American Society of Tropical Medicine and Hygiene. He received the Media Award of the European Organisation for Rare Diseases, a Stop TB Award for Excellence in Reporting, and a Kaiser Family Foundation mini-fellowship in global health reporting. He graduated from Cambridge University with an honours degree in Geography and was the Joseph Hodges Choate Memorial Fellow at Harvard University in 1988-89.

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Climate Change

Coca-Cola Enterprises, Inc. (CCE) is the leading Western European marketer, producer, and distributor of non-alcoholic ready-to-drink beverages and one of the world’s largest independent Coca-Cola bottlers. CCE is the sole licensed bottler for products of The Coca-Cola Company in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and Sweden. We operate with a local focus and have 17 manufacturing sites across Europe, where we manufacture nearly 90 percent of our products in the markets in which they are consumed. Sustainability is core to our business, and we have been recognised by leading organizations in North America and Europe for our progress in water use reduction, carbon footprint reduction, and recycling initiatives.

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ORGaNISERS

The Prince of Wales’s Corporate Leaders Group (CLG) is a select group of European business leaders working together under the patronage of His Royal Highness The Prince of Wales to advocate solutions on climate change to policymakers and business peers within the EU and globally.

The 23 CLG members represent combined revenues of over $170 billion and employ 2 million people across 170 countries.

www.corporateleadersgroup.com

Rethinking Business: Climate Change

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