Australian SDGs Hub For Business

                                

Energy is central to the functioning of a modern economy and is intricately linked to many other Sustainable Development Goals. It can increase social equity, deliver millions from poverty and allow the world to thrive, but its economic and social significance can’t be viewed in isolation from its environmental impact. Energy accounts for approximately 60% of total global greenhouse gas emissions.1

Yet according to a 2015 progress report, the world is falling far short of what is required to meet the 2030 objectives. Some 1.1 billion people have no access to any form of electricity, while 2.9 billion people (mostly in rural areas of Africa and Asia) have no access to clean cooking.2

Annual global investment is tracking at only one-third of where it needs to be if energy access, efficiency and sustainability objectives are to be met.2

While energy access is almost universal in Australia,3 Australia scores below the OECD average in terms of energy efficiency and use of renewable energy.4

 

How is this relevant to business?

Since the industrial revolution, fossil fuels have helped lift populations out of poverty and driven advancements in health, education and nearly every aspect of human life. Even a simple thing, such as light after dark, has been profound in driving progress.

But today it is understood that there is a cost to providing energy through the burning of fossil fuels. Increased carbon levels in the atmosphere are causing climate change at a rate that threatens the ecosystems on which we rely.

Disturbance to ecosystems risks causing civil unrest and economic instability so the transition to low emission, lower impact energy sources is a must in order to continue the gains of the past few centuries.

At the same time, making energy accessible to the billions who still don’t have it is critical to opening new markets and spreading financial prosperity.

“We believe financial fiduciaries now can — and should — integrate relevant ESG factors in their investment processes or principles. Some investors are starting to pay special attention to the “E” component to reduce climate risks, exploit opportunities and adapt to the transition toward a lower-carbon economy.” (BlackRock Investment Institute, 2016)

 

What can business do?

Companies are already getting the message from investors and consumers that they need to act on climate change by lowering their carbon footprint.

Intransigence is a risk to reputation and undermines a company’s license to operate.

Businesses need to drive energy efficiency and integrate an internal carbon price into decision making. This will create a fairer comparison when weighing cheap, but dirty, energy against renewable energy.

The private sector can play a leading part in driving change on a broader level. It has capacity to persuade and educate suppliers, governments and populations about the need to transition away from fossil fuels. The private sector can also help those without electricity leapfrog fossil fuels and go straight to low- or no-emission energy.

Act Responsibly

  • Conduct an assessment and map the value chain to identify positive and negative impacts of energy usage in businesses activities (from sourcing of materials to the product end-of-life or cessation of service)
  • Improve reliable access to energy in facilities including those in remote areas and least developed countries
  • Facilitate the transition from high emission energy sources to low and no emission energy sources. Increase the use of energy consumed from renewable sources in operations and encourage suppliers to do the same

Find Opportunity

  • Develop and use technology with low embedded and operational energy requirements
  • Collaborate with industry to inform research and design that will increase power storage systems for renewable energy sources
  • Utilize technological innovations to reduce emissions from modern energy generation
  • Join the RE100 pledge to move towards 100% renewable power
  • Encourage and where possible, facilitate access to affordable renewable energy for off-grid communities
  • Help educate the community and employees on how to conserve energy and the availability and benefits of safe, renewable and cost-effective energy solutions
  • Share energy sector knowledge with local governments to help them overcome barriers
  • Upgrade vehicle fleets to enable use of alternative, less carbon-intensive fuels and renewables
  • Encourage and support suppliers to increase the proportion of their energy coming from renewable sources
  • Apply financial expertise to energy pricing models
  • Build on the responsible investment work of the Caring for Climate partners to encourage others to disclose impacts, reduce their footprint and decouple growth from energy use

 

Links between Goal 3 and the UN Global Compact’s ten principles

Human Rights & Labour (UN Global Compact Principles 1, 2, 3, 4, 5, 6)
The right to a standard of living adequate for health and well-being is enshrined in the Universal Declaration of Human Rights and other international covenants and conventions.

Environment (UN Global Compact Principles 7, 8, 9)
With energy already accounting for some 60% of greenhouse gas emissions, future patterns of energy use and the sourcing of that energy has obvious ramifications for climate change and the world environment. More immediately, the generation of all types of energy comes at some environmental cost, be it mining of coal or the building of dams.

Anti-Corruption (UN Global Compact Principle 10)
Corruption in the energy sector distorts markets, increases the cost of power to consumers, leads to unfair allocation of mining rights and can result in lax health, safety and environmental controls.

“One in five cases of transnational bribery occur in the extractive sector. Corruption works as a tax on international investors, increasing the costs of doing business. It further deprives host countries of much needed revenues and significantly alters the efficient allocation and distribution of resources to achieve development objectives.” (OECD 2016)

 


1 Sustainable Energy For All, http://www.se4all.org/sdg7

2 World Bank; International Energy Agency (2015), https://openknowledge.worldbank.org/handle/10986/22148

3 World Bank, http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS”>http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS”>http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS

4 Bertelsmann Stiftung and the Sustainable Development Solutions Network, https://www.bertelsmann-stiftung.de/fileadmin/files/BSt/Publikationen/GrauePublikationen/Studie_NW_Sustainable-Development-Goals_Are-the-rich-countries-ready_2015.pdf

GOAL TARGETS

7.1
By 2030, ensure universal access to affordable, reliable and modern energy services

7.2
By 2030, increase substantially the share of renewable energy in the global energy mix

7.3
By 2030, double the global rate of improvement in energy efficiency

7.a
By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology

7.b
By 2030, expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries, in particular least developed countries, small island developing States, and land-locked developing countries, in accordance with their respective programmes of support

 

FURTHER RESOURCES

The Sustainable Energy for All: The Business Opportunity publication by Accenture and the UN Global Compact addresses the opportunities companies have to generate business value; the priority actions that are common across industries; and the key enablers of success.


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.