Australian SDGs Hub For Business

                                

The UN has singled out climate change as the biggest single threat to development1 while the World Economic Forum has described it as one of the “truly existential risks to our world.”2

Climate change is contributing to extreme weather events, large natural disasters and rising sea levels.

It threatens to unbalance ecosystems and undermine food production on land and from the sea. It is the world’s poorest and most vulnerable people who are at greatest risk.

With one third of the world’s population living in countries hit by water stress, one third of the planet’s arable land already lost to erosion and projected increases in global population, climate change is a catalyst for conflict and human displacement.3

The year 2016 was the warmest on record, at 1.10 C above the pre-industrial period and 0.060C above a record set in 2015. Global sea ice extent dropped more than 4 million km2 below average, sea levels rose and global average sea temperatures were the warmest on record.4

Carbon dioxide hit a record annual average concentration of 400 parts per million in the atmosphere, while the influence of human activities on the climate system was increasingly evident.4

Australia has the highest per capital greenhouse gas emissions rate among OECD countries.5

Australia is also feeling the effects of climate change, with recent years seeing more frequent heatwaves, floods and storms in many cities. Heatwaves are lasting longer and are more intense in many parts of the country.6

Australia’s stated goal is for 2030 emissions to be 26-28% below 2005 levels. Projections currently have emissions tracking toward being 4% below 2005 levels at best and 3.5% above 2005 levels at worst.7

 

How is this relevant to business?

The world must shift to a low carbon economy if there is to be sustainable economic growth. Climate change is already contributing to extreme weather events, natural catastrophes and sea level rises. As temperatures rise, the threat to ecological systems putting pressure on civil society and economic systems.

Whether individuals subscribe to the science behind climate change or not, policymakers are moving to curb emissions. Markets, investors and consumers are increasingly demanding companies take action to reduce their carbon footprint. The outlook is for further change in regulatory settings, so companies should be positioning themselves, including new business models, innovation and technology.

Institutional activism is on the rise, putting further pressure on companies to address climate change and climate change risk.  International investors with combined assets under management worth tens of trillions of dollars have signed on to climate-related actions and pledges, including the UN Principles of Responsible Investing (PRI), the Montreal Climate Pledge, the Fossil Fuel Divestment Commitments and the Portfolio Decarbonization Coalition.

As action on climate change becomes a bigger reputational issue, it will become an increasingly potent commercial issue.

 

What can business do?

It is up to business to become as efficient as possible, as knowledgeable as possible and build resilience into supply chains.

An obvious positive step is to lower the carbon footprint and help customers and suppliers to do the same. This can include adopting lower emission energy sources, including renewable energy.

Given extreme weather events and natural disasters around the world, businesses should develop disaster recovery plans.

Those who are aware and prepared will fare better than businesses which try to stymie action on climate change for short-term gain. Indeed, directors need to weigh their fiduciary duties on this issue.

Climate change is not a political or ideological construct and it is incumbent upon business to take a public position and act.

Act Responsibly

  • Reduce greenhouse gas emissions and reliance on carbon; review the business energy mix and decrease reliance on high emission fuel sources
  • Assess risk exposure to potential future change impacts for the business and its supply chain and integrate climate risks into investment analysis and decision making
  • Develop a disaster response plan
  • Design and implement natural disaster risk mitigation, preparedness, response and recovery plans at manufacturing and storage facilities in high-risk locations
  • Measure, reduce and report climate exposure and progress on actions to confront climate change on an annual basis, increasing the level of transparency and consistency of reporting
  • Set science based carbon emission targets in line with the sectoral de-carbonization pathway and relevant country pledges in relation to the Paris Climate Agreement and other climate partnerships. Encourage suppliers, service providers, customers and other stakeholders in the Energy value chain to do the same
  • Measure and publicly disclose the carbon footprint of investment portfolios on an annual basis in accordance with The Montréal Carbon Pledge (including listed equities, fixed income, private equity, property and infrastructure)

Find Opportunity

  • Publicise your company’s targets and achievements in relation to reducing your carbon footprint
  • View renewable energy as a road to increased economic opportunity as technological advances lead to great accessibility and affordability with the added advantage of minimal environmental cost
  • Invest in research and development of improved methods of carbon capture and storage, including terrestrial carbon sinks such as forests together with other secure storage systems such as saline aquifers
  • Inform public policies on urban design and transportation infrastructure (including multi-modal enabling transport corridors) to accelerate the transition to more sustainable cities and transport networks
  • Support high level partnerships and industry associations advocating for responsible public policies on climate
  • Build on the work of the ‘Caring for Climate’ partners – the UN Global Compact, UNEP and the UNFCCC – to leverage sphere of influence to encourage other companies, people and Governments to disclose their environmental impacts, reduce their environmental footprint and decouple growth from energy use

 

Links between Goal 13 and the UN Global Compact’s ten principles

Human Rights & Labour (UN Global Compact Principles 1, 2, 3, 4, 5, 6)

The right to life and the right to an adequate standard of living is enshrined in the Universal Declaration of Human Rights and other international covenants and conventions. Climate change has already shown itself as a destabilising world force that undermines all aspects of human existence, including food security through to risk of harm from natural disasters and rising sea levels.

Environment (UN Global Compact Principles 7, 8, 9)

SDG 13 sits hand-in-glove with Principles 7, 8 and 9, which call for a precautionary approach to environmental challenges, promotion of environmental responsibility and the development of environmentally-friendly technologies. Climate change is the environmental issue of our time. Failure to limit climate change will render success on other environmental challenges inconsequential. For example, an ocean free from plastics will be of little use if it cannot support life.

Anti-Corruption (UN Global Compact Principle 10)

Investment to offset the effects of climate change is estimated at almost US$700 billion by 2020, representing a huge temptation for corruption, according to Transparency International. Regulatory grey areas and loopholes, together with pressure to fast-track solutions, makes the risks even greater, it says.

“We must press governments to build checks and balances into climate policy. And they need to ensure flows of money are published. Then we can monitor where they go. Independent oversight bodies are also needed. But they must have salaried staff with technical expertise and no conflicts of interest. We must press companies to disclose their positions on climate policy. Which coalitions do they take part in? Which causes do they support?” (Transparency International)

 


1 United Nations (2016), http://www.un.org/ga/search/view_doc.asp?symbol=E/2016/75&Lang=E

2 World Economic Forum (2017), https://www.weforum.org/agenda/2017/01/global-risks-in-2017

3 United Nations Environment Programme, http://www.ipcc.ch/pdf/press/UNEP_DED_IPCC.pdf

4 World Meteorological Organization,  http://library.wmo.int/opac/doc_num.php?explnum_id=3414

5 The Climate Institute, http://www.climateinstitute.org.au/verve/_resources/TCI_Australias_Emissions_Factsheet_Final-LR.pdf  

6 Commonwealth of Australia (2017), https://soe.environment.gov.au/theme/overview/topic/climate-change-key-pressure-australian-environment

7 Department of the Environment and Energy (2016), http://www.environment.gov.au/system/files/resources/9437fe27-64f4-4d16-b3f1-4e03c2f7b0d7/files/aust-emissions-projections-2016.pdf

GOAL TARGETS

13.1
Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries

13.2
Integrate climate change measures into national policies, strategies and planning

13.3
Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction and early warning

13.a
Implement the commitment undertaken by developed-country parties to the United Nations Framework Convention on Climate Change to a goal of mobilizing jointly $100 billion annually by 2020 from all sources to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation and fully operationalize the Green Climate Fund through its capitalization as soon as possible

13.b
Promote mechanisms for raising capacity for effective climate change-related planning and management in least developed countries and small island developing States, including focusing on women, youth and local and marginalized communities
*Acknowledging that the United Nations Framework Convention on Climate Change is the primary international,
intergovernmental forum for negotiating the global response to climate change.

 

FURTHER RESOURCES

The GHG Protocol is widely used international accounting tool for government and business to understand, quantify, and manage greenhouse gas emissions.


The Global Impact Investing Network’s Impact Reporting & Investment Standards (IRIS) is a free catalogue of generally-accepted performance metrics used by leading impact investors to measure social, environmental, and financial success, evaluate deals and grow credibility.


For more goal-related tools, go to the  Inventory of Business Tools webpage on the SDG Compass website. Businesses can explore and find commonly used tools when assessing their impact on SDGs