IPCC report–a call for action to business leaders and boards

Corporate responsibility has become an important topic of any well managed company and is also nowadays regularly included in board agendas. However, in most cases ”sustainable business” is still very narrowly defined and limits the scope primarily into managing basic environmental and social requirements–which only touch the tip of the iceberg. What we need to do now is to think big, as business will play a crucial role in finding solutions to the existential crisis our world and the humankind are facing. And this is not just about being a good corporate citizen, but more about doing good business and making sure to be one of the future winners in our rapidly changing operating environment.

Looking at the chilling scientific facts about the rapid speed of climate change and its implications in the most recent IPCC report, it is finally becoming quite clear that we may be running out of time. What we thus should include in our board room discussions and strategy reviews is a thorough scenario analysis of how these changes will affect our business and markets within the strategy period, not just in the distant future. What are the alternative business models, technologies, products and services we should start investing in to bring new solutions to the market which address these challenges but also offer new business opportunities?

Where is the sense of urgency?

Many important initiatives are moving ahead already–investments in biofuels, shift to low CO2 intensive means of transportation, transition towards circular economy, and renewable energy technologies such as wind and solar becoming commercially viable alternatives to energy production based on fossil fuels. Consumers are increasingly conscious about making sustainable choices and new regulatory requirements aiming at limiting negative environmental effects of companies are being set. This all sounds good, but none of these measures can reverse the current trend quickly enough. Taking the energy sector only as an example, legacy of fossil fuels lasts tens of years from now both due to CO2 already emitted in the air and the large number of existing energy production sites. This means that majority of our energy needs will still be based on fossil fuels despite of growing investments in renewable energy sources. In other words, we really are racing with time–but where is the sense of urgency?

There are technologies available already and new innovations being looked into which can accelerate our efforts to cope with the climate change challenge. One of them is Carbon Capture and Storage (CCS) which is still not widely accepted as there are risks related with any kind of geo-engineering. I do not believe we can solve the climate crisis without extensive use of CCS. Safer ways to solve the storage issue are already being piloted and look promising, but this technology needs to be made commercially viable. Agreement on global and high enough pricing for CO2 emissions would facilitate the development but will most likely not happen soon enough. We need sufficient financing possibilities for R&D in climate change mitigation technologies such as CCS, which from global perspective would be money well spent. Political and business leaders must work together to find new solutions–but the corporate world should have more courage and a higher ambition level to sit on the driver´s seat. The lacking sense of urgency is needed now, urgently.

Siitä, kuinka suuret suomalaiset yritykset huomioivat ilmastomuutoksen toiminnassaan, keskustellaan PwC:n isännöimässä DIF:n jäsentilaisuudessa “Ratkaisujen aika – ilmastomuutos johdon ja hallituksen agendalla” 10.4.2019.

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