CLIMATE CHANGE – Paris ratified, a new era in business?

15 November 2016

It’s taken less than a year. One hundred nations have ratified the Paris Agreement. It is now in force in 195 countries around the world. The final sprint to avert runaway climate change has begun. What does this mean for your business?

United Nations Conferences on Climate Change have been running since 1995. A baby conceived during a drunken diplomatic fling at the first one in Berlin would now be 21 years old. The future this imaginary lovechild expects for their children now hangs in the balance.

A world making the transition to a greener, fairer future? Or one riven by shortages, war and wild weather?

The new agreement assumes that with concerted global action we can limit global warming to an average of two degrees centigrade. This, it is hoped, would stave off the worst impacts and knock-on effects. 

There are those who say two degrees is still too much. There are others that say holding things at two degrees is now impossible. It remains to be seen if other countries will stick to their promises, especially since the US elections.  

These are interesting discussions. But this we know. New Zealand’s government has made an unconditional commitment. It plans to reduce greenhouse gas emissions by five per cent below 1990 levels by 2020. 

The plan is based on reducing emissions, offsets from domestic forestry and buying international carbon credits. It’s envisaged that the cost of carbon credits in New Zealand’s emissions trading scheme (ETS) will continue to rise. This will particularly impact businesses involved forestry, energy, fishing, heavy industry, liquid fossil fuels, synthetic gases and waste.  

It will increase the cost of polluting. It will increasingly reward activities that keep greenhouse gases out of the atmosphere. It will provide increased competitive advantage to low carbon operators in those sectors. It will open up more opportunities for sustainable innovation.

The Ministry for Primary Industries recently announced $3.1 million in funding for 13 research projects in the agriculture and forestry sector. The agricultural sector produces just under half of New Zealand’s greenhouse gas emissions. It was put in the too hard basket instead of the ETS. The government has established the Biological Emissions Reference Group to research how to cut emissions. It is investing $20 million into research to reduce methane emissions from livestock.

These efforts have so far not impressed observers on the world stage. The Climate Action Tracker combines three teams of independent scientists. It is led by two lead authors of the Independent Panel on Climate Change. It rates New Zealand government’s national response as inadequate.

“Current policies are expected to be far from the target to reduce emissions by 30% compared to 2005 levels by 2030,” it says. “In the absence of sufficient climate policies, the government intends to make use of its ‘creative accounting’ rules for the forestry sector. If applicable this would result in it artificially achieving its 2020 reduction targets without any improvement in mitigation policies or real reductions in emissions.”

For the next few years at least the real action on climate change is not going to come from the New Zealand government. But there will be real action regardless. 

Research by Colmar Brunton indicates how heightened environmental concern is driving buyers’ choices. This is especially true of our imaginary lovechild’s generation. They are showing a marked tendency to avoid buying from or working for high polluting companies in favour of more ethical alternatives. Anything from a half to three quarters of those surveyed said sustainability influences their buying choices.

Planning regulations around the country already include regulations designed to increase resilience to climate change. They are also taking in measures to reduce greenhouse gas emissions. Rules are changing in areas like energy efficiency and transport.  

In addition, export businesses will find their climate change profile an increasing factor in the ease with which they can access foreign markets. It will also affect their popularity once they get there. The worldwide drive to buy local will create more arguments like those made in recent years against the import of New Zealand butter to the UK. As in that instance, our export industries must be ready to meet those challenges.

Rachel Brown, CEO of the Sustainable Business Network, says: “It’s time for low carbon planning that takes account of future generations. We know responding to climate change is a multi trillion dollar opportunity NZ can lead on. And many of us are. We need to be rethinking emissions from agriculture – particularly dairy farming – and work with farmers to create new revenue streams. While we have minimal government leadership on this, business leadership is growing.”

Whatever your business the best way to keep up with this shift is to work closely with the Sustainable Business Network. We run learning and networking events. We provide tools, training and information. We have built comprehensive programmes and partnerships in procurement, transport, office design, food and leadership. We run Million Metres, the country’s only crowdfunding platform dedicated to replanting New Zealand’s waterways with native plants and trees.

The work we do together contributes to your business’ ability to help tackle climate change. And it prepares businesses for success in the changing world we find ourselves in.

We have practical and moral responsibilities as people on this planet. We face stark and urgent choices if we are going to meet them. We can’t wait until something forces us to change. We have to get together and make those changes now.