SDGs, COP21 and climate change: New imperatives for the private sector

Rolf Olsen

January 10, 2016

Guest blog by Leidar’s Senior Energy Specialist, Peter Houzer.

Business as usual is not an option for corporate leaders and communicators

By committing to 17 Sustainable Development Goals (SDGs) and signing the “Paris Agreement” (COP21), world leaders have started a very ambitious international process based on – so far – voluntary national contributions.

Post-COP21, stock markets reacted immediately by sending carbon companies south, and green and climate-friendly enterprises north. Throughout 2015, major financial institutions formulated their carbon exit strategies and some heavyweight funds started to divest carbon-connected businesses. Some utilities have split “green” and “carbon” assets as a first step. A tipping point has been reached – or even passed.

The Intended Nationally Determined Contributions (INDC) – that were collected before and during the COP21 – sum up what governments will do, along with cost implications, to reach the target of restricting global warming. The current aim is to limit growth to 3°C, though the consensus it that an increase of 2°C, or even 1.5°C, should be the target.

Going beyond laws and regulations

Those INDCs go far beyond existing laws and regulations. A good example is Germany bringing the target date for the “coal exit” forward, from 2050 to 2030. Across the world, legislators and regulators have to formulate much tighter targets and tougher actions. What does this mean for companies and their leaders?

  • Environmental data like emissions, power consumption and origin will have to be published in annual reports
  • CEOs will be measured not only by their financial success but on their environmental performance
  • Empowered customers will make their own choice and are likely to favour green, carbon-neutral or low-carbon products and services

But that on its own isn’t enough. It is no good putting everything in place without communicating what you are doing to all your stakeholders. Strategic thinking and corporate positioning, transparent and strategic communication with permanent, multi-channel engagement programmes will – more than ever – be required to manage a company’s reputation, as well as to shape customer perceptions.

There are some crucial questions for corporate leaders:

  • Is the carbon footprint and the carbon content of products and services identified?
  • Is a comprehensive carbon reporting, as requested by EPA or other registries, in place?
  • Are your own – ideally ambitious – carbon/climate change targets reviewed or formulated?
  • Is a stringent climate change strategy integrated into the business strategy?
  • Do executives and staff understand the impact of the climate change strategy on the overall business?

Corporate communicators have to ask themselves if they have…

  • Identified all partners and stakeholders relevant for the new strategy
  • Adjusted their messaging, facts and stories so all stakeholders and customers can follow and understand the climate change strategy
  • Updated all relevant climate change communications platforms and reporting tools
  • Put in place the tools to engage in an ongoing dialogue with stakeholders and customers about the climate change strategy

While many observers and commentators described COP21 in Paris as an historic political step, I would call it an irreversible move for the private sector that has fundamentally changed how corporations operate and communicate.

 

Peter

Peter Houzer is Leidar’s Senior Energy Specialist, with a strong focus on the Renewable Energy Sources (RES) and the Power Utility sectors. He has worked for German, Danish, Norwegian and Swiss companies and European associations for more than 15 years, mainly on regulatory affairs related to transmission system operation, cross-border trading, emissions trading and, last but not least, renewable energy certificates and Guarantees of Origin, including market design issues.

Peter has also advised on the physical and economic integration of RES in different national markets, including Germany, Switzerland, Italy, Scandinavia and South East Europe. He has been actively involved in positioning Swiss utilities to meet the requirements of the RES and the ETS Directives, monitoring specific National Renewable Energy Action Plans and Burden Sharing Budgets.

Peter holds a German Diploma Degree in Electrical Engineering, for which he wrote his thesis on Megawatt-Class PV Plants. And he has worked in Brussels, Munich, Zurich, Hamburg, Berlin as well as Freiburg. Peter is a regular speaker at international conferences, focusing on green power, certificates and Guarantees of Origin. He is an integral Coach and certified Spiral Dynamics integral Practitioner.