Large group of multinationals sign UN climate pact
As world leaders begin gathering in New York for Monday’s UN Climate Action Summit, a large group of multinational companies including Swiss Re, Danone, Ikea, Salesforce and L’Oréal have pledged to drastically cut greenhouse gas emissions.
With today’s announcement of 59 new signatories, the UN Global Compact now has 87 companies, with a combined market cap of $2.3tn, on board with its campaign to keep global warming below 1.5 degrees centigrade. The initiative launched earlier this year with 28 companies signing up in July, including Levi Strauss, AstraZeneca and Unilever.
Companies signing on with the UNGC pledge have agreed to set independently verified “science-based” targets and create decarbonisation plans within 24 months to start bringing their emissions down to keep warming below 1.5C. Signatories also have the option to publicly commit to reaching net-zero emissions by no later than 2050.
More than 600 companies had already pledged to do their part in limiting global warming to 2C as set out in the 2016 Paris climate accord, but their progress on actually hitting those goals has been patchy. Only 15 per cent of the world’s largest 500 companies are on track.
Nonetheless, the rapidly rising number of companies taking action on climate change is evidence of a “massive intellectual revolution” in the world of business, said Andrew Steer, a board member at the Science Based Targets Initiative — a coalition between the UNGC and various environmental research and activist groups in charge of vetting the companies signing the pledge.
“Just five or 10 years ago, the vast majority of CEOs, boards and governments believed it would be nice to do something about climate change but it would require a trade off,” Mr Steer said. “Now, their view is that smart policies on climate change encourage more resource efficiency and [the development of] new technology . . . which can lead to more, rather than less, competitiveness.”
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Activating the private sector in the fight against climate change has a been one of UN Secretary General António Guterres’s priorities, but he noted there is still a long way to go. “It is encouraging to see many first-movers in the private sector align with civil society and ambitious governments by stepping in support of a 1.5C future,” said Mr Guterres. “Now we need many more companies to join the movement, sending a clear signal that markets are shifting.”
Mr Guterres has taken a hard line on climate change in his tenure as secretary-general. At this week’s climate change summit, he is set to bar leaders from the US, Brazil and Saudi Arabia from taking the stage because of their failure to support the Paris climate agreement.
A handful of energy companies have signed up to the UNGC’s new pledge, but oil majors and many other large polluters are conspicuously absent from the list of signatories. However, the way the agreement is designed, companies are committing to push their entire supply chains — including their energy suppliers — to become more climate friendly, which should have a knock-on effect and pressure non-signatories to clean up their acts.
Salesforce, for example, is requiring its heaviest polluting suppliers to set science-based emissions reduction targets of their own, said Patrick Flynn, vice-president of sustainability.
Nestlé, another signatory, is preparing an emissions reduction plan that will result in sweeping changes for the farmers and packaging companies that it works with.
However, companies can only do so much on their own. Those that are serious about fighting climate change need to use all of the options they have available to them, including their ability to influence public policy, Mr Flynn said.
“The business community coming together is necessary but not sufficient,” he said. “We need more bold ideas and ambition from all parts of society . . . and we could use regulation as well.”