5. 3
CONTENTS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
6. 4
CONTENTS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
7. 5
CONTENTS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
8. 6
6
CONTENTS
CONTENTS
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9. 7
CONTENTS
268
269
271
273
276
280
282
285
286
287
290
291
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10.
11. Foreword
9
The year 2007 may well prove to be a
defining moment in the international
effort to combat climate change.
FOREWORD
A NEW CARBON NEUTRAL NETWORK FOR
THE UN
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
12. Across the world,
countries, companies, cities
and citizens are rising to the
challenge of climate change
and at a scale and pace which
is truly unprecedented.
THE KEY TO THE FUTURE
10
FOREWORD
The fact that a global carbon
neutral network is being called
for reflects the momentum of
an issue that has become the
challenge for this generation.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
13. 11
Overcoming serious
climate change may cost
perhaps as little as 0.1 per
cent of global GDP a year
FOREWORD
for three decades. THE WIDER LANDSCAPE
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
14. The fact that so much
activity is underway is also
due to the anticipation that
countries will indeed agree a
treaty that engages post-2012
and one that delivers much
bigger cuts than Kyoto.
Climate change offers the
chance to transform the way
we do business on this planet.
All that is really required now
12
is the political commitment
of governments to unleash
human ingenuity.
Achim Steiner
FOREWORD
TRANSITION TO A LOW CARBON SOCIETY
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
15. CLIMATE ACTION WISHES TO THANK OUR SUPPORTING ORGANISATIONS:
13
SUPPORTING ORGANISATIONS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
16.
17. CLIMATE ACTION WISHES TO THANK OUR PLATINUM SPONSORS:
15
PLATINUM SPONSORS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
18.
19.
20.
21. The need for
climate action
19
The time to act on climate change is now. We can no
longer consider the issues relating to climate change
THE CASE FOR ACTION
as primarily environmental. Quite simply, climate
action has become a matter of strategic consequence, Certain words ran like a
a core political issue for every government on Earth.
thread through our discussions:
‘urgency’, ‘action’ and ‘now’.
THE TWO FACES OF THE CLIMATE ISSUE
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
22. India, one of the world’s
most rapidly advancing
economies, is devoting two
per cent of GDP annually
to flood control and food
security programmes, as well
as mandating tough energy
efficiency standards.
THE BAD NEWS
20
We need a breakthrough,
THE CASE FOR ACTION
THE GOOD NEWS an agreement to launch
negotiations for a comprehensive
climate change deal that all
nations can embrace.
A POLITICAL IMPERATIVE
THE NEED FOR CLIMATE ACTION
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
23. 21
Climate change will
no longer be a primarily
THE CASE FOR ACTION
environmental concern. It has
become a matter of strategic
consequence, a core political
issue for every government Wealthy nations must
on Earth. help provide incentives to
poorer ones to take steps
that help us all.
CARBON NEUTRAL UN
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
24. Author
22
With political will,
THE CASE FOR ACTION
comes results. Our job is to
translate this spirit into deeds Organisation
in Bali, and beyond.
Enquiries
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
25. Climate change
is unequivocal
23
Special reports published by The Intergovernmental
Panel on Climate Change (IPCC) provide a Climate change is now
comprehensive assessment of knowledge on all
aspects of climate change. These include advances unequivocal and the human
THE CASE FOR ACTION
in scientific understanding related to climate change
and major findings from working groups. Together, influence on the Earth’s climate
these reports have, and are having, a major impact on
public opinion and awareness among world leaders. is now very well established.
The IPCC’s most recent Fourth Assessment Report sets
out to integrate and compact this wealth of information
into a readable and concise document explicitly
targeted at policymakers.
OBSERVED IMPACTS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
26. ECOSYSTEM DISRUPTION
At the lower end of these FOOD INSECURITY
scenarios, the best estimate
of temperature increase by
the end of the 21st century is
placed at 1.8°C and at the
24
upper end of the scenarios,
the best estimate is
approximately 4°C.
THE CASE FOR ACTION
COASTAL FLOODING
FUTURE TRENDS
One scenario that would
limit temperature increase
at equilibrium to 2.0–2.4°C
would actually cost the world
UNEQUAL IMPACTS less than three per cent of the
global GDP in 2030.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
27. Author
COST EFFECTIVE CLIMATE MITIGATION
25
THE CASE FOR ACTION
Organisation
In some countries, yields
from agriculture could be
reduced by up to 50 per cent
by 2020.
CONCLUSION
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
28.
29.
30. The cost of
climate action
28
A basic conclusion of the Stern Review is that the costs of
strong and urgent action on climate change will be less
than the costs of inaction and the impacts of climate
change under business as usual (BAU). Although they
are in the minority, there remain a number of people
THE CASE FOR ACTION
who deny the importance of strong and urgent action
on climate change and they essentially offer one of, or
a combination of, four arguments. These arguments are
correspondingly, absurd, reckless, irresponsible and
ethically indefensible.
THE CASE FOR ACTION ON CLIMATE CHANGE
NO SCIENTIFIC BASIS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
31. HUMANS CAN ADAPT TO CLIMATE CHANGE Under a BAU scenario, the
stock of greenhouse gases
could more than treble by
the end of the century, giving
at least a 50 per cent risk of
exceeding 5°C global average
temperature change during
the following decades.
ACTION IS TOO COSTLY
29
THE CASE FOR ACTION
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
32. The likely cost of urgent and
coordinated action is around
one per cent of GDP by mid
century. In terms of growth, it
amounts to a fraction of a fraction FUTURE GENERATIONS WILL BE RICHER
taken off the annual rate. AND MORE ABLE TO ADAPT
30
THE CASE FOR ACTION
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
33. The case for strong and
timely action, supported by well
designed economic policies,
is overwhelming.
THE BASIC QUESTION
31
Is it worth paying one
per cent of GDP to avoid the
THE CASE FOR ACTION
additional risks of higher
emissions?
Author
Enquiries
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
34.
35. The road
from Bali:
TOWARDS A BINDING POST-
2012 CLIMATE FRAMEWORK
After years of struggle to mobilise an effective
33
international response to climate change, 2007 may
prove to be a critical turning point. From the G8 summit
in Heilegendamm to the APEC summit in Sydney, from
a high level UN gathering in New York to a meeting of
major economies in Washington, climate change has
suddenly vaulted to the top of the global agenda. This Why are international
burst of climate diplomacy culminates in December
in Indonesia, where the goal will be a Bali ‘road map’
pointing the way to a new global agreement. The
commitments essential?
FRAMEWORKS
questions to ask are whether this road map will set
governments on a course towards binding multilateral
Because without them, countries
commitments and will some form of commitment be
given by all the world’s major economies? cannot be confident that others
INTRODUCTION
are contributing their fair share
to the global effort.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
36. THE NEED FOR INTERNATIONAL AND
BINDING COMMITMENTS
Sectoral agreements
PROVIDING FOR A RANGE OF
COMMITMENTS
If it is to achieve broad
participation, the post-2012
framework must accommodate
different national circumstances
and strategies and allow
Economy-wide emissions
countries to take on different
34
types of commitments.
FRAMEWORKS
Other commitments
Policy-based commitments
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
37. Assisting developing countries THE BALI ROAD MAP
TOWARDS A COMMON FRAMEWORK
The political reality is
that few if any of those with
Kyoto targets will be prepared
to assume binding post-2012
commitments without some
form of commitment from the
US and the major emerging
35
economies.
FRAMEWORKS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
38. BEYOND BALI
There is growing political
36
momentum in the US for
Author
mandatory GHG limits.
California, New York and other
states, many led by Republican
governors, have enacted
FRAMEWORKS
mandatory controls.
Organisation
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
39. Framework for a new
global agreement on
climate change
Climate change is a complex, long term problem,
two centuries in the making. There are few human
activities that do not contribute to it and as such, the
scale of response needed for an ultimate solution is so
37
large that widespread, collective action is essential.
The Global Leadership for Climate Action, facilitated
by Mohamed El-Ashry, was set up to mobilise political
action and offer a framework for collective action. The
framework and its recommendations for mitigation
and adaptation policies, technological development,
finance and global collaboration are discussed here.
INTRODUCTION
FRAMEWORKS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
40. GLOBAL LEADERSHIP FOR CLIMATE
ACTION
Targeted agreements on energy efficiency and
renewable energy
COMPREHENSIVE AGREEMENT
38
Carbon sinks
}
}
}
}
FRAMEWORKS
MITIGATION – TARGETS AND TIMETABLES
Market-based mechanisms
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
41. ADAPTATION
Consultative group on clean energy research
39
FINANCE
FRAMEWORKS
ACCELERATE TECHNOLOGY RESEARCH
AND DEPLOYMENT
Reform Clean Development Mechanism
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
42. Enhance public finance CONCLUSION
Author
40
A new US$50 billion per year climate fund
FRAMEWORKS
Organisation
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
43. A framework for
climate change
and global equity
41
With the world initiating new climate change
negotiations in December 2007 to succeed the Kyoto
Protocol expiring in 2012, there is still no shared
framework for agreement between developed and CARBON DIOXIDE IS INCREASING RAPIDLY
FRAMEWORKS
developing countries. There has been a sea change
in global attention to this issue in the past three
years, reflected in this year’s 2007 Nobel Peace Prize
which is shared by former Vice-President Al Gore
and the Intergovernmental Panel on Climate Change.
Yet there is still no consensus on how to proceed.
This brief note sketches out a framework for action,
building on the underlying core facts of the climate
change challenge itself.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
44. DECOUPLING GROWTH WITH EMISSIONS
CARBON CAPTURE AND SEQUESTRATION
There is widespread
agreement that the world will
enter a very severe danger
zone if the CO2 concentration
reaches 560 ppm; indeed the
threshold of safety could be
42
450 ppm or even lower.
A GLOBAL FRAMEWORK FOR TECHNOLOGY
DEVELOPMENT
FRAMEWORKS
ENERGY EFFICIENCY AND ENERGY DE-
CARBONISATION
}
}
}
}
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
45. }
}
}
COSTS
43
FRAMEWORKS
TOWARDS A WORLDWIDE ADOPTION OF
LOW EMISSION TECHNOLOGIES
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
46. Author
LOOKING FORWARD
44
Organisation
FRAMEWORKS
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
47. Managing risks of
climate change for
human well being
THE CASE FOR ADAPTION
45
Impacts of climate change will inevitably influence CLIMATE CHANGE IMPACTS ON ECOSYSTEM
ecosystem services and human well-being, and increase
the pressure on the most vulnerable regions and SERVICES AND HUMAN WELL BEING
communities that depend more on natural resources and
ecosystems and have lower adaptive capacity. Taking
appropriate adaptation measures is urgent to manage
the risks and alleviate the impacts of climate change.
GLOBAL EQUITY
Various mechanisms and instruments can be used, while
concerted action from public and private sector and the
international community is required in order to take
equity and fairness into consideration.
Table 1: Climate change impacts on ecosystem services and human well being.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
48. INSTRUMENTS AND MECHANISMS TO
COPE WITH CLIMATE CHANGE
}
}
}
46
Table 2: Mechanisms and instruments for managing climate change risks.
}
}
}
GLOBAL EQUITY
}
}
}
}
}
}
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
49. }
}
}
}
}
}
}
}
}
}
}
}
}
}
}
}
}
}
}
}
}
47
}
}
}
}
GLOBAL EQUITY
}
}
}
}
}
}
}
}
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
50. INVESTING IN BIODIVERSITY FOR THE FUTURE
CHALLENGES AND OPPORTUNITIES
48
48
GLOBAL EQUITY
Author
Organisation
Enquiries
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
51. Promoting equity and
adaptation for
developing countries
49
The IPCC Fourth Assessment report demonstrates
evidence of human induced global climate change.
The poor are the worst victims of a global problem that
GLOBAL EQUITY
has been created mainly by the rich and industrialised
countries. Climate change is a harsh reality now for
many of us, and this is demonstrated through various
recent extreme climatic events around the world.
These include: prolonged and devastating floods in
Bangladesh, India, China and in the UK in 2007; severe
droughts in Africa and Asia, extreme heatwaves
in central Europe, devastating cyclones and tidal
surges across the coasts. We live in an unequal world
economically, politically and socially, and climate
change impacts will increase poverty, food insecurity,
hungers, inequity and social conflict in the coming
decades if we don’t take urgent action now before it COST OF DELAYED ADAPTATION
escapes our control.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
52. Isolated US
Any delay in mitigation,
increases the risk of runaway
global climate change with
severe regional impacts.
PROGRESS AND BARRIERS TO ADAPTATION
50
GLOBAL EQUITY
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
53. THE POOR NEED GREATER ADAPTATION
51
BEYOND 2012: COMMITMENT TO EQUITY Author
AND FAIRNESS
GLOBAL EQUITY
Organisation
CONCLUSION
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
54. 52
Partnerships and
PARTNERSHIPS
climate change
With an increased understanding about the scale of change required to tackle global warming, business,
government and civil society need to work in partnership to address such change. Building these partnerships
allows governments to implement policies that will drive the necessary change, and business to respond rapidly
to these drivers in a positive way.
INTRODUCTION
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
55. THE TREND TOWARDS GREATER
TRANSPARENCY
53
PARTNERSHIPS
A growing awareness
A STRATEGIC PRIORITY FOR BUSINESS
of climate change among
consumers has resulted
in a significant increase in
corporations reporting how
they are helping to tackle
climate change.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
56. There is clearly a potential
for missed opportunities with
Creating political space
most environmental and
clean technology sectors
seeing double digit growth
rates over the past couple of
years, or savings to the
bottom line through energy
efficiency measures.
54
BUILDING PARTNERSHIPS
PARTNERSHIPS
Creating a common platform
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
57. The current members of the UK CLG are:
ENABLING A STEP CHANGE IN RESPONSE
Author
55
Working together as an Organisation
industry reduces the overall
PARTNERSHIPS
exposure to business risk
while clearly communicating
to others the reasons behind
the need for a change in
the industry.
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
58. Developing partnerships across
developed and developing countries –
AN AGENDA FOR INCLUSION OF THE POOR
Increasingly, businesses in developed countries
are recognising their responsibilities regarding
greenhouse gas (GHG) emissions and climate change.
But as well as clearing up their own houses, they have
the potential to help mitigate the global impacts of
climate change, by working with NGOs, governments and
developing country businesses to ensure the mistakes
of developed countries are not repeated in new growth.
In addition, businesses, through an agenda of corporate
social responsibility, can help alleviate the hardship of
56
the most vulnerable groups who stand to bear the brunt
of much of the impacts of climate change.
INTRODUCTION }
A SECTORAL APPROACH WITH FINANCIAL
} INCENTIVES
PARTNERSHIPS
}
}
}
}
Production sector
}
}
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
59. Consumption sector
FRAMEWORK FOR A SOCIOECONOMIC
AGENDA FOR POOR
Energy efficiency
57
Improving the efficiency
of the mining and processing
of coal and improving the
monitoring and control of coal
PARTNERSHIPS
mine methane gas can make
a significant contribution to
emissions reductions and
Agriculture and food security
workplace safety.
Energy sector
Water and other resource shortages
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
60. }
}
RISKS AND INSURANCE
}
}
}
} Author
58
}
PARTNERSHIPS
Organisation
Enquiries
PROGRAMMES, INSTITUTIONS AND POLICIES
}
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
61.
62. 60
Investors:
INVESTORS
A NEW WORLD OF RISK AND OPPORTUNITY
Climate change presents enormous risks and
opportunities for corporations. Increasingly, as investors
make decisions about the value of their investments,
they are factoring in how well a company is prepared
to manage those risks and act on those opportunities.
To do so, they are increasing pressure on companies
to make climate change a priority governance issue
and using their leverage to encourage companies
to analyse and disclose their plans for managing
climate risk and their strategies for seizing climate-
related opportunities.
CLIMATE CHANGE: A STRATEGIC IMPERATIVE
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
63. When industry is willing
to be regulated, it is a good
bet that policy changes
will follow.
61
REGULATORY RISKS AND OPPORTUNITIES
LITIGATION RISKS
INVESTORS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
64. A GROWING CONSENSUS
}
62
PHYSICAL RISKS AND OPPORTUNITIES
}
}
INVESTORS
COMPETITIVE RISKS AND
OPPORTUNITIES
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
65. Which companies
have the strategic vision
63
to manage the legal,
physical and competitive
risks associated with
climate change?
INVESTORS
CLIMATE RISK DISCLOSURE:
TRANSPARENCY IS KEY
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
66. INVESTOR NETWORK ON CLIMATE RISK MEMBERS
Authors
64
INVESTORS
Organisation
CONCLUSION
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
67.
68. TakeAction! At Novo Nordisk, we recognise that there are limits to growth.
It is only when we respect the principles of sustainable development that we
can grow a healthy business. A sustainable business.
– unlimited access to We base our business on the Triple Bottom Line: striving to conduct our
activities in a financially, environmentally and socially responsible way.
renewable energy This principle is anchored in our actions – from board decisions to daily
practices among all our employees.
TakeAction! is the employee engagement program that enables everyone to
make the Triple Bottom Line their business. It unleashes creativity, harnesses
innovation and inspires action. A key element is the principle that activities
must support business objectives. Examples are fundraisers for underprivileged
people in need of medical care, educational programs that inspire healthier
living among children and environmental initiatives in the local community.
Building a sustainable business is about overcoming the constraints of current
practices. It’s about nurturing new skills, supporting disruptive innovation,
practicing deep listening and learning with stakeholders. It’s about valuing
people’s motivation to drive change and to keep pushing forward.
There may be a limit to growth, but there is no limit to ideas. That is our most
precious source of renewable energy. That is the foundation for our business.
That is what makes people at Novo Nordisk TakeAction! To defeat diabetes.
To combat climate change.To chart a road towards a healthier future for the
next generations.
Read more about TakeAction! and other initiatives to put our values into
action at novonordisk.com
Tak
eAc
tion
!
Kristina Kempf,
Daniela Rimpf and
Lisbeth Juhl Christensen,
Novo Nordisk Germany.
69. Investor expectation
on company climate
change risk disclosure
Investors expect three key aspects of a company’s
climate change risk approach to be disclosed. They
expect a clear articulation of the nature of material
climate change risks and the impact on both short and
long term strategy and competitiveness. Secondly, INVESTORS RESPONSE TO THE
they expect a quantification of the risk and level of
uncertainty that surrounds any risk assessment. Finally,
CLIMATE CHANGE RISK
investors expect a description of the risk management,
mitigation and adaptation actions identified and
the level of any residual/acceptable risk. Investors
recognise the area of climate change risk is a rapidly }
evolving one; one that continues to demand a greater }
level of sophistication in disclosing those risks to }
investments. }
67
CLIMATE CHANGE: A SYSTEMIC, LONG
TERM RISK FOR INVESTORS
DISCLOSURE NEEDS OF INVESTORS INVESTORS
}
}
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
70. }
}
INVESTOR EXPECTATIONS
}
}
}
Clear articulation of material climate change risk
68
The disclosure expectations
of investors are different from
other stakeholders in both
their scope and detail. This
INVESTORS
} has meant that emissions
}
}
disclosure and associated
discussion through company
sustainability reports is often
insufficient for investors.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
71. }
CONCLUSION
Quantification of climate change risk
}
}
}
}
69
Author
}
}
}
}
Organisation
INVESTORS
Enquiries
Risk management, mitigation and adaptation
}
@
}
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
72. Using
financial
indices for
responsible
investment
70
The Stern Review suggests that climate change }
threatens to cause the greatest and widest ranging
market failure ever seen. Stern states, “...our actions
over the coming few decades could create risks of
major disruption to economic and social activity, later RISK MANAGEMENT – AND VALUE
in this century and in the next, on a scale similar to PROTECTION
those associated with the great wars and the economic
depression of the first half of the 20th century.”
As a result, investors, governments and wider society
INVESTORS
expect companies to take rapid action in response
to the varied and considerable risk that climate
change poses. Financial indices, such as the Dow Jones
Sustainability Index, and the FTSE4Good Index can
help investors find companies doing just that. Here, Detailed climate change
the FTSE4Good Index is explored in more detail.
requirements have already
TWIN-TRACK STRATEGY
been added to FTSE4Good
inclusion criteria to ensure
the index series is aligned
to one of the major concerns
} facing business and
investors today.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
73. Table 1: Overview of elements of a good
management system.
}
}
}
}
}
Table 2: Climate change criteria for the FTSE4Good index series.
} } }
}
} }
71
}
INVESTORS
}
} }
}
} } }
}
}
}
}
}
}
}
}
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
74. SUPPORTING TECHNOLOGY SOLUTIONS
COMPANIES
TRANSFORMATIONAL INITIATIVES AND
VALUE CREATION Investor perceptions
have changed and these
environmental technology
companies are now seen
72
as providing exciting
opportunities for growth.
Table 3: Definition and examples of transformational initiatives.
INVESTORS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
75. THE ROLE OF BENCHMARKING Authors
73
CONCLUSION
INVESTORS
Organisation
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
76. ARE YOU SERIOUS?
SGS VERIFIES THE ACCURACY AND ENVIRONMENTAL INTEGRITY OF GREENHOUSE GAS EMISSIONS REPORTING
Your company, your shareholders and the public need to know that your emissions reporting is accurate, reliable and
consistent with global standards. Our experience stretches from the smallest through to the largest multi-site and
multi-country customers, and from simple through to complex and diverse project portfolios. To get serious about emissions
reductions, visit www.sgs.com/climatechange
SGS IS THE WORLD’S LEADING INSPECTION, VERIFICATION, TESTING AND CERTIFICATION COMPANY
77. Responsible investment
for responsible investors
A spectacular global political failure in dealing with
climate change has led consumers to vote with their
money, buying hybrid cars and green electricity and
in turn creating huge new markets. Investors too are
voting with their money and organisations such as
the Carbon Disclosure Project offer a unified way for
them to find out about the greenhouse gas emissions
and risk management of many of the world’s largest
corporations.
75
CLIMATE CHANGE AS A POLITICAL ISSUE
REPORTING
THE CARBON DISCLOSURE PROJECT
CLIMATE CHANGE AS A CORPORATE ISSUE
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78. A UNIFIED APPROACH TO CLIMATE CHANGE
THE PRUDENT INVESTOR
76
REPORTING
Practical steps to take for a concerned shareowner
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
79. 77
Author
REPORTING
Organisation
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
80. Carbon
emissions
reporting
in Asia
78
Asia ex-Japan results from the 2007 Carbon Disclosure A MORE STRATEGIC RESPONSE
Project reveal that: 1) a range of Asian companies are
increasingly describing strategic business initiatives
to curtail carbon emissions, 2) companies working
on climate change strategies often rely on industry
associations and global NGOs for guidance, 3) the
degree of top management engagement is a critical
REPORTING
determinant in the disclosure of carbon emissions
and the development of formal initiative, 4) pictures
of regional response characteristics are becoming
apparent and 5) the quality and quantity of responses
from Asia’s tech and telecoms companies is notable,
while Asia’s banks and utilities lag their global
counterparts.
NEW INDUSTRY RESOURCES
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
81. SECTOR FOCUS: TWO LEADERS, TWO
LAGGARDS
Asian bankers waiting for guidance
Although climate change
remains a relatively new
policy area in Asia, leading
companies are now taking
the initiative and positioning
themselves to capitalise on
a shift in policy and growing
consumer awareness.
79
Asian companies are
increasingly relying on
industry associations to
REPORTING
shape their emerging carbon
GOVERNANCE MATTERS
emissions policy responses,
carbon reporting and
management strategies.
Energy efficiency
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
82. Harnessing consumer sentiment
80
REPORTING
Asia’s leading tech
Asia’s tech players demonstrating new carbon
companies appear to be sophistication
making systematic efforts to
match the breadth and depth
of reporting common to their
global competitors.
Asian utilities hiding under a cloud
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
83. REGIONAL CHARACTERISTICS
Telecom respondents
81
SETTING A BENCHMARK
understand they are one of the
few sectors which can benefit
strategically from carbon
linked trends.
REPORTING
Organisation
Asian telecoms benefitting from carbon linked
trends
Enquiries
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
84.
85. Companies:
A NEW WORLD OF RISK AND OPPORTUNITY
Climate change will have far-reaching consequences
on companies across all sectors of the economy.
Already, billions are being invested in energy efficiency,
renewable energy and development of low carbon
83
technologies. Company disclosure on climate-related
risks is increasing, carbon costs are being factored into
company capital planning and corporate leaders are
calling for mandatory caps on greenhouse gases (GHGs).
Nevertheless, while many leading companies are taking
important steps to manage climate change, bolder actions
BUSINESS LEADERSHIP
to maximise energy efficiency, develop climate-friendly
products and curb greenhouse gas emissions throughout
company supply chains will be needed.
INTRODUCTION
ELECTRIC POWER
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
86. OIL AND GAS
With renewable portfolio
84
standards in place in 25 US
states, electric power companies
are moving to diversify their
BUSINESS LEADERSHIP
generation portfolio to include
larger amounts of renewable
energy.
BANKING/FINANCE
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
87. TECHNOLOGY SECTOR
85
AUTOMOTIVE BP’s energy efficiency
initiative has been the
company’s most profitable
BUSINESS LEADERSHIP
project in the last decade; with
a US$100 million investment,
the company realised US$400
million in savings.
CONSUMER PRODUCTS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
88. Author
86
BUSINESS LEADERSHIP
Organisation
CONCLUSION
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
89. Life in the low
carbon economy.
Is your business
ready?
87
In order to maximise commercial value from the issues arising as a result of climate change, businesses need
to act and they need to act now. Designed to help businesses respond to the challenges of the new operating
environment in a way that enhances brand reputation, operating efficiency and financial performance, KPMG’s
Carbon Advisory Group provides a deep understanding of the issues and challenges facing businesses today.
PROFILE
Climate change is
BECOMING A LOW CARBON BUSINESS forcing companies of all
sizes to rethink the way
they do business.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
90. HOW TO PROSPER IN A LOW CARBON
ECONOMY
KPMG’s Carbon Advisory
WHAT ARE THE KEY SUCCESS FACTORS?
Group is providing insight and
strategies to help companies
understand and manage the
many business implications
of climate change.
Four key areas in creating an efficient low carbon business.
88
PROFILE
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
91. KPMG: SUPPORTING BUSINESS IN MEETING CARBON REDUCTION OBJECTIVES
Carbon trading and offsetting – investigation and dispute
}
}
}
}
Carbon efficient logistics
}
}
}
}
Carbon management
Environmental tax and incentives
89
Accounting for carbon
Mergers and acquisitions in the carbon market
Carbon restructuring
PROFILE
Organisation Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
92. Caring for Climate:
THE BUSINESS LEADERSHIP PLATFORM
90
The rise of climate change as a fundamental issue }
for society has emphasised the need for leadership
and voluntary action on the environment. Against
this background The Global Compact, together with
BUSINESS LEADERSHIP
the United Nations Environment Programme (UNEP)
and the World Business Council for Sustainable
Development (WBCSD), has developed Caring for
Climate: The Business Leadership Platform as a way
to mobilise business action on climate change. Within
months of launching the initiative, 200 companies
from around the world, including many of the world’s
largest transnational corporations, have endorsed the
statement and are already taking action.
INTRODUCTION CARING FOR CLIMATE INITIATIVE
}
}
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
93. CARING FOR CLIMATE: THE BUSINESS LEADERSHIP PLATFORM
A Statement by the Business Leaders of the UN Global Compact
91
BUSINESS LEADERSHIP
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
94. CONCLUSION
COMPANIES TAKING ACTION ON CLIMATE
Author
92
BUSINESS LEADERSHIP
Organisation
Enquiries
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
95. Boosting the earth’s immune system.
To help conserve our one and only planet Earth, it is important not only to reduce environmental impact, but also to maintain and enhance the planet’s
self-recovery capability. Which is why Ricoh is dedicated to actively promoting ecosystem conservation projects throughout the world in partnership
with environmental NPOs and local communities that place a priority on protecting the habitats of indigenous species as well as the life of human beings.
To learn more about Ricoh’s efforts to conserve the environment and enhance our employees’ global citizen awareness visit us at ricoh.com/environment.
Agency #: 10011590 Job: RIC_11590-01_pass01.indd
Client: Ricoh WO#: TYP.1 RT WO#: TK PO#: NA Pub: Magazines
96.
97. Carbon footprints
in the supply chain:
THE NEXT STEP FOR BUSINESS?
95
To mitigate the effect of climate change, business needs
to develop innovative strategies which challenge the
way in which consumer needs are satisfied and which
move beyond incremental improvements in process
efficiency. By undertaking a carbon investigation of
their supply chains, businesses can calculate and
manage the carbon footprint of their products and
SUPPLY CHAINS
unlock significant emissions reductions.
BENEFITS OF THE HOLISTIC VIEW
FOCUSING ON THE SUPPLY CHAIN
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98. CARBON REDUCTION LABEL
96
ECONOMY-WIDE APPROACH
SUPPLY CHAINS
SUPPLY CHAIN SUCCESS
THE DETAILED METHODOLOGY
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
99. WHAT NEXT FOR BUSINESSES?
97
Author
SUPPLY CHAINS
Organisation
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
100. Listening
to the
planet
98
For many years we have heard about the ozone hole over Antarctica, the greenhouse effect and other possible
effects of man’s activities on our planet. For a long time these alarms had little effect outside the world of
biologists and other specialists. But today, with an increasing number of indications, the environment and
climate issues have finally reached a whole new level of attention among entire populations. The time has come
to take what Mother Earth tells us seriously.
A LONG TERM COMMITMENT
PROFILE
IN 1871 THERE WERE NO WORRIES
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
101. REDUCING AIR EMISSIONS AND A whole range of FSC certified papers
PURIFYING WATER
THE ENVIRONMENTAL CENTRE IN MUNKEDAL The Munkedal mill
is now one of the most
environmentally friendly
99
paper mills in the world.
Organisation
THE ROLE OF FSC CERTIFICATION PROFILE
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
102. Responding to
climate change –
THE INSURANCE INDUSTRY PERSPECTIVE
With core competencies in risk management and
finance, the insurance industry is uniquely positioned
to further society’s understanding of climate change
and advance creative solutions to minimise its
100
impacts. Insurers have now begun to embrace this
huge opportunity, which will enable them to prosper
while reducing the claims from climate change.
INTRODUCTION
INSURANCE
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
103. Figure 1: Range of insurer activities documented in this article.
101
A PROACTIVE APPROACH TO CLIMATE
CHANGE
INSURANCE
ADVANCING SOLUTIONS
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
104. 1. Understanding the climate change problem
2. Promoting loss prevention
Figure 2: Range of carbon footprints for global
insurers (each symbol represents one insurer).
4. Crafting innovative insurance products
102
Insurers have an enormous
opportunity to develop new
profit centres by providing
innovative insurance products
for energy users or providers
INSURANCE
of clean energy services.
5. Offering carbon risk management and carbon
reduction services
3. Aligning terms and conditions with risk
reducing behaviour
6. Financing climate protection improvements
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
105. 7. Investment in climate change solutions
8. Public policy
Author
9. Leading by example
103
10. Carbon risk disclosure Organisation
INSURANCE
Enquiries
TOWARDS BEST PRACTICES
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
106. Climate change
104
litigation:
A CATALYST FOR CORPORATE RESPONSES
LEGAL
This overview considers a variety of legal actions AN OVERVIEW OF CLIMATE CHANGE
against both governments and government agencies
(public actions), and against corporate entities (private LITIGATION
actions). It is generally considered that governments
and corporations in non-Kyoto Protocol ratifying
nations are the most vulnerable to litigation, eg USA
and Australia. However, nations that are dramatically
failing to meet Kyoto obligations will also be at risk, eg
Canada. As the gap between Kyoto obligations and the
stringent cuts recommended by the Intergovernmental
Panel on Climate Change (IPCC) grow, no nation and no
corporation can consider themselves safe.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
107. PUBLIC LAW ACTIONS (DOMESTIC)
In 2007, increasing
New Zealand
scientific certainty, emerging
legal precedent and growing
public awareness of climate
change, are combining to
create potent motivators for
legal action.
105
Australia
PUBLIC LAW ACTIONS (INTERNATIONAL)
LEGAL
USA
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108. PRIVATE LAW ACTIONS
Public nuisance
106
Director liability
LEGAL
Climate change litigation
now presents a real and
present financial risk for
Nigeria
corporations. Actual costs of
litigation are likely to be far
outweighed by associated
commercial risks.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
109. CORPORATE RESPONSES Author
Organisation 107
LEGAL
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
110. The Clean Development
Mechanism –
108
EVOLVING TO MEET CLIMATE AND DEVELOPMENT CHALLENGES
The Clean Development Mechanism is addressing both
climate and development issues. It is up and running but
the challenge now is to increase efficiency, and scale up
MARKET MECHANISMS
the mechanism so that CDM can fulfil its potential.
}
}
}
NUTS AND BOLTS OF CDM
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111. A number of variables
impacting on the ability of
sub-Saharan African countries
to attract CDM investment are
the same constraints that
In a few short years, more
limit FDI in the region.
than 840 projects have been
109
registered, and about another
1,800 are in the validation/
registration pipeline.
MARKET MECHANISMS
ACHIEVING POTENTIAL
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112. MICROFINANCE AND CDM
THE CHALLENGE OF AFRICA
110
Credit is available from
MARKET MECHANISMS
informal commercial and non-
commercial money lenders,
but usually at a very high cost
to borrowers.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
113. RESPONDING AND EVOLVING
111
Author
MARKET MECHANISMS
Microfinance as a Organisation
development strategy
combines massive outreach,
far-reaching impact and
financial sustainability,
which makes it unique among
Enquiries
development interventions.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
114.
115.
116. The use of targets or
market mechanisms for
emissions reductions
in developing countries
114
There is a strong perception among developed
countries that net global greenhouse gas emissions
(GHG) reductions are only possible by imposing
targets on developing countries. But to do so is neither
MARKET MECHANISMS
politically feasible nor technically practicable. We
should not waste time designing targets into any TARGETS AGAINST BUSINESS AS USUAL
post-Kyoto climate change regime. Instead, we should
explore other options, such as market mechanisms.
This article looks at the arguments for doing so.
Target obsession and political deadlock
TARGET SETTING FOR DEVELOPING
COUNTRIES
Targets in the form of equal global quota
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117. HIGH IMPACT OF NON-CLIMATE POLICIES
Vulnerability to external factors
Agreeing on specific targets
The technical difficulties
and uncertainties involved in
projecting a future emission
trajectory are making many Agreeing on target level of per capita emissions
developing countries uneasy
and reluctant to accept any
form of target.
115
Difficulty of verification
MARKET MECHANISMS
DIVERSE MODIFIED TARGETS
Intensity targets
Transformation of industrial structure
Sectoral targets
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118. No-lose targets
Pledge and review targets
If targets are not workable,
market mechanisms could
provide incentives for
developing countries to act
on climate change.
116
Originally designed
Compatibility of climate action and economic as an Annex 1 compliance
goals
MARKET MECHANISMS
mechanism, the CDM can
function as an incentive
mechanism for emission
reduction projects in
developing countries.
WHY NOT MARKET MECHANISMS
The Clean Development Mechanism
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
119. The emission reductions
expected from unsold CER
represent a real, tangible and
measurable option, while
emissions reductions based
on a fictitious BAU target can
never be verified or certified.
117
NET GLOBAL EMISSIONS REDUCTIONS Author
A CER discounting scheme
MARKET MECHANISMS
Organisation
CONCLUSION
Enquiries
@
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
120. Purchasing
carbon
offsets
A HOW-TO GUIDE
Purchasing carbon offsets can set an internal price
for carbon, allowing a company to assess the cost
118
of other emissions-reducing initiatives. It can also
help companies gain a greater understanding of
carbon markets and support existing corporate
responsibility policies. But offsetting has also been
seen as an easy ‘get-out’ from tougher internal choices
with some media casting doubts over the extent to
which offsets represent real and additional emissions
MARKET MECHANISMS
reductions. This simple 10 step guide is designed
to help companies avoid the pitfalls and use carbon
offsetting as a useful part of overall greenhouse gas
(GHG) reduction strategy.
STEP 1: UNDERSTAND WHAT OFFSETS ARE
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
121. STEP 2: DECIDE HOW MANY OFFSETS
NEEDED OFFSETTING CASE STUDIES
Sky
HSBC
The GHG Protocol and
ISO 14064 provide globally
recognised standards for
measuring and reporting
the carbon footprint of an
119
organisation.
MARKET MECHANISMS
STEP 3: DEVELOP A TAILORED OFFSET
STRATEGY
Questions to consider during the process
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122. 120
STEP 4: DECIDE HOW TO BUY OFFSETS
MARKET MECHANISMS
STEP 5: CHOOSE THE OFFSET STANDARD
THAT BEST SUITS YOUR COMPANY
Being aware of the key
standards in the voluntary offset
market will help companies
take advantage of the flexibility
and competitive prices offered,
while ensuring offsets are really
delivering the reductions in
emissions they claim.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
123. STEP 10: REVIEW THE APPROACH TO
OFFSETTING ON A REGULAR BASIS
Author
STEP 6: UNDERTAKE DUE DILIGENCE ON
PROJECTS
STEP 7: TALK TO DIFFERENT SELLERS
Organisation
121
STEP 8: ENSURE OFFSETS ARE RETIRED ON
MARKET MECHANISMS
A CREDIBLE GHG REGISTRY
STEP 9: BE TRANSPARENT ABOUT OFFSET
PURCHASES Enquiries
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
124. Contraction and
Convergence:
THE PROPORTIONATE RESPONSE TO CLIMATE CHANGE
THE BASIS OF C&C
It becomes possible to go
beyond the merely aspirational
122
character of the current
debate around the UNFCCC, to
communicating the rationale
and constitutional calculus
CARBON RATIONING
of C&C.
The United Nations Framework Convention on Climate
Change (UNFCCC) was agreed in 1992 with the objective
to halt the rising concentration of greenhouse gas
(GHG) in the atmosphere. In 2007, efforts to this end }
remain insufficient and the danger of ‘runaway’ rates
of global climate change taking hold is increasing.
The science-based, global climate policy framework
of Contraction and Convergence (C&C) offers an }
equitable solution to cutting carbon emissions in
the hope that global collective efforts to reduce
emissions can be successful. Three elements are
at the core of the C&C campaign: the constitutional
concept of Contraction and Convergence (C&C); the
techniques and processes developed to focus the
debate on rates of C&C that are relevant; the sustained
effort to present C&C as the basis of the proportionate
response to climate change.
V I S I T : W W W. C L I M AT E A C T I O N P R O G R A M M E . O R G
