Former executive director of Friends of the Earth, Tom Burke, warns that while great progress has been made, many firms are reluctant to accept the extent to which their business models must change to tackle climate change
The past few years have seen the emergence of a growing consensus that businesses finally get climate change. Inevitably, there are plenty of laggards out there, and hostile voices remain, but the blue chip firms that shape the business debates of the day now broadly accept that climate change represents a major threat to their operations and that urgent action is required to address those risks.
Everything from the recent Copenhagen Communique, signed by more than 500 companies and calling for a far more ambitious international deal on climate change than is currently being discussed by politicians, to the huge surge in clean tech investments, provides evidence that the business community has become a progressive force in the fight against global warming.
It is a scenario that many environmentalists must have dreamed of, but for one of the UK's leading green commentators it is still far too early to declare the argument won. Tom Burke, former executive director of Friends of the Earth and environmental policy advisor to Rio Tinto, may have recently witnessed a shift in corporate environment policies that he never would have imagined possible when he started work as a professional environmentalist 30 years ago, but he is yet to be convinced that business leaders truly get the scale of the climate change challenge.
"The business world is a long way from really understanding climate change," he observes, slotting BusinessGreen.com into a busy schedule that includes work for Rio Tinto, environmental NGO E3G, and his position as visiting professor at Imperial and University Colleges in London. "Global firms get it, but don't know what to do: national-scale firms and smaller firms really don't know what they should do, and few of them understand how the way in which they do business is going to have to change really quickly."
It is Burke's contention that while businesses increasingly accept that climate change is an issue, they are reluctant to recognise the scale of the challenge and the pace of the transition that will be required. "There's an inevitability to it that they have not accepted yet," he observes, arguing that businesses will either need to adapt to the rapid emergence of a low-carbon regulatory framework, or the rapid emergence of climate change impacts - or more likely both at once. "Either way, there is no business as usual anymore."
Burke is perhaps uniquely placed to comment, his career having effectively embodied the gradual thawing of relations between environmental NGOs and the business world. A former executive director of Friends of the Earth, director of the Green Alliance and recipient of a CBE for services to the environment, he has more recently worked as environmental advisor for mining giant Rio Tinto and has also undertaken advisory work for BP.
For Burke, it is the continuation of investment in carbon-intensive activities by the likes of BP that confirms business understanding of climate change is far from complete. "What are the oil companies doing developing fields that will take 10 years for extraction to begin and 40 years to extract?" he asks. "Is that really a wise decision, when by 2050 the projections are that we will all be using electric cars and there will be no demand for oil?" The answer is left unsaid: the oil giants either don't really believe the transition to a low-carbon economy will happen, or they are making very bad long-term investment decisions.
Even those firms that are setting carbon targets and moving to cut emissions are reluctant to accept the full scale of the cuts they will have to deliver, a fact underlined by the recent Carbon Disclosure Project report, revealing that corporate emissions targets are well short of that recommended by climate scientists. "The challenge is getting across the idea that this is all about changing business models. That is the test of a company's seriousness on climate change," he observes. "At the moment we can get there by making incremental reductions in emissions, but that will only be enough for a few more years - fundamental changes in business models are required."
One necessary step along the way to delivering those new low-carbon business models is the creation of a low-carbon regulatory framework, and it is to that end that Burke recommends businesses play a much more proactive role in the development of new regulations and incentive schemes - although he gives short shrift to the traditional forms of trade association-based lobbying.
"Trade Associations take a lowest common denominator approach," Burke argues, citing the recent scandal at the US Chamber of Commerce that has seen a number of firms leave the group over its opposition to climate change. "Even the more progressive groups have to represent the interests of their carbon-intensive members as well, which dilutes the message of more progressive firms."
Burke recommends firms take a more direct approach to climate change lobbying, warning that consistent opposition to low-carbon measures risks putting businesses on the opposite side of the debate to their customers. "This is too important an issue to be mediated by trade associations. Businesses need to talk to each other more and get involved earlier in the legislative process. "
Those firms that truly get climate change also understand its impacts and are preparing now for the increased risks that will emerge over the next few years. Burke cites the pre-recession food shortages and riots that many security experts believe will emerge as the global economy begins to recover as a prime example of how relatively localised changes in climate could have a global impact.
"We know that climate change will lead to increased food and water insecurity, and we know that when food prices spike some countries will stop exporting food. We also know that countries such as China have been buying up land in other nations just to supply food for export," he says, mapping out a highly volatile future that could be with us from 2015 rather than 2050. "There will be food riots and there will be geo-political tensions, and businesses should be focusing on how these impacts will affect them."
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