Food, Fuel, and Finance: A Call for Corporate Climate Action in 2016

Authors

Bryndis Woods, Analyst, BSR

In December 2015, BSR and our partners at We Mean Business advocated at COP21 on behalf of the business community, calling for an ambitious global climate agreement that sends clear signals to the real economy. And we were excited to see this achieved—thanks, in part, to a shift in the role of business from reluctant observer to engaged partner in the climate debate.

Now that the negotiations have ended and a new year has begun, companies and others are asking what’s next. Corporate commitments in the lead up to and during COP21 signal that there are three sectors in particular—food, fuel, and finance—where we might expect to see catalytic action from business in 2016.

Food

At COP21, Kellogg, Monsanto, Olam, and PepsiCo chaired a working group on addressing the interlinked challenges of climate change and food security, with the aim to make 50 percent more food available for a global population expected to reach 9 billion by 2050 and to strengthen the resilience of farming communities while reducing greenhouse gas emissions by 50 percent, all by 2030. Setting the bar, Kellogg and General Mills both announced science-based targets. Kellogg pledged to reduce its own emissions in direct operations and electricity purchases (Scope 1 and 2) by 65 percent and to work with suppliers (Scope 3) to reduce their emissions 50 percent, all by 2050. And BSR assisted General Mills in a pledge to reduce all emissions by 28 percent by 2025.

Conservation International, in partnership with industry leaders like Starbucks, announced a call to action to make coffee the first sustainably sourced agricultural product in the world. The Sustainable Coffee Challenge will convene industry partners to develop a common framework for sustainability that will address the negative impacts of climate change on coffee production and benefit the lives of producers.

Fuel

December 2015 witnessed the launch of the Breakthrough Energy Coalition, spearheaded by Bill Gates. The coalition aims to dramatically scale up the research pipeline by making patient, flexible investments committed to developing technologies that will create a new, lower-carbon energy mix.

BSR’s Future of Internet Power and Future of Fuels collaborative initiatives aim to increase the use of renewable energy to power data centers and drive the transition to low-carbon commercial road freight through collaboration. Among others, two Future of Fuels members have reported gains in sustainable fuel leadership: UPS is on track to drive 1 billion alternative fuel and advanced technology miles by 2017, and Walmart doubled fleet efficiency in 2015 (from 2005).

Also in 2015, six new companies—including Google and Avery Dennison—joined the Corporate Renewable Energy Buyers' Principles, a U.S. initiative that aims to make large-scale renewable energy easier for companies to buy. Ten companies, including Microsoft, Adobe, and Coca-Cola, joined the RE100 campaign, committing to 100 percent renewable energy. And in December of last year, Google announced the largest purchase of renewable energy ever made by a non-utility company, and Ford announced its largest five-year investment ever in electrified vehicles, with a pledge to introduce 13 new models by 2020.

Finance

In 2015, more than 500 institutions pledged to divest at least part of their holdings from fossil fuels: a record-breaking figure. Responsible-investment charity ShareAction brought together investors to form a new US$500 billion coalition to call on some of the world’s biggest corporations to switch to renewable energy, thereby increasing corporate demand.

Initiatives to measure and reduce carbon in investment portfolios—including the Montréal Carbon Pledge, the Portfolio Decarbonization Coalition, and the Divest-Invest Philanthropy coalition—all surpassed their targets in 2015, demonstrating that financial institutions are by and large sticking to and finding success in their commitments. Given this, other private-sector actors may soon join them.

On top of these corporate commitments, the Paris Agreement itself gives additional clarity for the food, fuel, and finance sectors, among others. The text explicitly addresses agriculture, renewable energy, and green finance, and provides certainty for businesses and investors in three ways: by setting a long-term global goal and successive rounds of commitments to achieve it, by gathering medium-term commitments from 187 countries to reduce emissions and build resilience, and by making efforts to accelerate short-term climate action over the next five years.

The momentum to act on climate is stronger than ever before—during the two weeks of COP21 alone, the number of companies and investors committing to We Mean Business commitments increased from 469 to 515 and the number of commitments from 769 to 841.

Companies that do not engage risk being left behind, and should take note of recent remarks by French Foreign Minister and COP President Laurent Fabius: “2015 was the year of negotiations and decisions; 2016 must be the year of implementation and action.”