Nigel Topping is the CEO of We Mean Business - a coalition of organisations working on climate change with thousands of the world’s most influential businesses and investors. Previously, Nigel was Executive Director of CDP (formerly the Carbon Disclosure Project). GlobeScan co-CEO Chris Coulter recently interviewed Nigel to gain insight on the value We Mean Business puts on stakeholder intelligence to help build recognized leadership in an uncertain world.
Published 4 June 2015
Because this is the year of the United Nations Climate Change Conference, COP21, in Paris, climate change is the key issue and focus of my work through We Mean Business. 2015 is also important because the new UN Sustainable Development Goals are being finalized. But if we don’t get climate right, then it will be impossible to make substantial progress in other areas. Tackling climate change is our biggest opportunity.
I am optimistic about these negotiations. There are three reasons why I think we can get a global deal done:
First, ambition is important and one of the keys to securing an agreement. We are seeing growing positive signals from both governments and business in this area. The bottom-up process to the negotiations is allowing for the expression of ambition among governments, some of which is coming from non-federal actors such as states, provinces and cities.
Similarly, business is demonstrating a much greater sense of ambition this year. A growing number of businesses see the need for bold action and are committing to things like procuring 100% of electricity from renewable sources. Companies are taking action because doing so offers tremendous economic opportunities for creating growth, jobs and prosperity in the new climate economy. These actions are influencing governments in ways that have as yet been underappreciated. Because governments and business are looking to each other to see who is ready to commit to action, we are seeing growing reciprocal actions as a result. This is a serious development and helps build confidence in finding a deal in December.
Second, there is a much better and more sophisticated understanding of what it means to put a price on carbon. We are seeing many actors – individual companies, industry sectors and governments – beginning to identify realistic pricing that will drive real change. A growing number of companies from across a range of sectors have instituted an internal price for carbon to help them make smart, longer-term capital investments and reduce their GHGs. In addition, we are seeing more business leaders advocating for a price on carbon and this is also having an impact. The conversation on pricing is becoming much more mature and this is contributing to the foundations for a global agreement.
Third, climate change has the potential to be a really powerful driver for innovation as well as growth and jobs. We know that technology breakthroughs happen through volume, and we are seeing unprecedented levels of smart money being invested in renewables and low-carbon solutions. In the private sector, we have companies like Tesla and Dyson, both run by exceptional engineering entrepreneurs, investing significant amounts of money in a low-carbon economy. Governments that set the best climate policies are going to attract serious investment that will drive economic growth. Germany and China have become exemplars when it comes to solar and wind.
These three drivers – growing ambition, better understanding of the mechanisms of carbon pricing and the realization that all of this is the future of innovation and growth – are creating the conditions for a global deal in Paris.
Climate change is a massively complex challenge and requires a multi-stakeholder response. Historically, we’ve been trying to tackle challenges in our respective silos. We have hit a critical mass of policy people with experience in both government and business, and this is leading to a much more pragmatic approach to the climate challenge.
One of these relates to risk. There has been a historic myth within government that business hates all regulations. The truth is that business wants to reduce risk and uncertainty. The more dialogue and understanding that occurs between business and government, the easier it is to develop regulatory frameworks that can drive national competitiveness, optimize capital allocation and reduce uncertainty for business.
We are seeing more reciprocal conversations between CEOs, senior government officials and investors that are of a fundamentally different quality in the lead up to Paris than we saw in the lead up to Copenhagen in 2009. Governments are increasingly asking for help. This is new in comparison with the lead up to the Copenhagen talks. As such, it provides a window for business to share its views and demonstrate the opportunities inherent in a low-carbon economy. The discourse that works best is when business shows government what it is doing to reduce GHGs, that it is making money at it, and that business could go even faster if government could make additional smart policy changes.
There is a very heterogeneous set of conversations coming from civil society. It is the role of organizations like Greenpeace to criticize business, and this can indeed be effective in getting companies to act on climate change. But there are also other organizations, like the seven leading partners of We Mean Business, whose role is to collaborate with the private sector.
Both roles of civil society are critical. We need to hold business accountable and we need to facilitate and support better performance.
We Mean Business is a coalition of organizations working with thousands of the world’s most influential businesses and investors. These businesses recognize that the transition to a low-carbon economy is the only way to secure sustainable economic growth and prosperity for all.
To accelerate this transition, We Mean Business has launched a campaign to get hundreds of leading companies and investors to commit to low-carbon initiatives. The campaign gives companies and investors a common platform to catalyze bold climate action, be recognized for their leadership on climate change and promote smart policy frameworks.
Our role is to convey the collective voice of the silent majority of businesses and to ask governments to get on with climate-friendly policies. We’ve seen that the majority of businesses truly want this. There are very few businesses that are against good regulations on climate change. Getting to “good” can be a challenge, but I am very encouraged by the level of conviction among the We Mean Business community.
Businesses and investors are powerful change agents. They have the power to help create the new clean energy economy, which will provide greater energy security, improve public health, and contribute to poverty alleviation for billions of people around the world.
Many business leaders see the economic opportunity of climate change and have taken up ambitious climate action. Several businesses are setting ambitious science-based targets that are basis for strong positive performance. Many companies are reporting their emissions to improve the efficiency with which capital is allocated to its most productive uses. Leading businesses are already building a carbon price into their business operations and investment decisions as a way to prepare for a low-carbon economy.
We’re seeing bold leadership from the investment community, where they are taking a sophisticated investment strategy to reduce the carbon content and risk in portfolios. While we’re seeing discussions about fossil fuel divestment campaigns, there is a flood of investors that are looking to reduce carbon risk in their portfolios. This goes well beyond SRI investing. These mainstream investment decisions that are happening across the world will have a powerful cumulative effect on corporate and government policies.
All these actions by the business and investor community are necessary to address climate change, however, are not happening fast enough. Further action from government will help more and more companies take this to scale. Businesses need policies that help them scale up clean energy and energy efficiency, conserve natural resources and send the right price signals to drive investment in low-carbon technologies.