Comment

CEOs need to talk tough to National on climate

A coalition of business leaders says the Zero Carbon amendment bill has to be ambitious and have all-party support in order to drive our transformation to a low carbon economy. And that means they need to have words with the National Party, says Rod Oram.

The Climate Leaders Coalition, a grouping of some 110 Kiwi companies large and small across a wide range of sectors, celebrated its first anniversary this week by demonstrating its three main achievements so far – engagement, action and ambition. Its progress raises two crucial questions: What’s driving its success? And can it do a lot more?

It sounds trite to say leadership is the key ingredient in its success. But it is unusual to see such collaborative and encouraging leadership across such a broad swathe of the economy.

The personalities of the key people involved sets the tone. They are genuinely committed to tackling climate change, and to developing and sharing knowledge on how to do so. However, very few of them are ready yet to use the correct term, which is climate crisis, and to respond with commensurate vigour.

Also crucial are the CEO-to-CEO relationships among members, regardless of size of companies. Being a CEO is often a lonely job, so the coalition gives them a place for full and frank discussions about the difficult climate challenges they are facing but also to explore the many business opportunities for action.

These attributes have helped the coalition almost double in size from the 60 companies that founded it a year ago. Today, its members account of 60 percent of New Zealand’s gross emissions, employ more than 170,000 people, and represent nearly one third of private sector GDP. That breadth and scale of membership is highly unusual, possibly even unique, among national business communities around the world working on the transformation to a low carbon economy.

In terms of action, 90 percent of members are measuring their emissions, with the other 10 percent working on doing so; 71 percent have publicly reported their emissions, with another 29 percent planning to; 60 percent are working with their suppliers to reduce emissions, with another 36 percent planning on that; and 55 percent have set public emissions reduction targets consistent with keeping the rise in global temperatures to no more than 2c, while a further 45 percent have that work in progress.

Some members have signed up to more demanding disciplines. For example, 16 are committed to the Certified Emissions Measurement and Reduction Scheme and 15 to the carboNZero programme. These are run by Enviro-Mark Solutions, a subsidiary of Landcare Research, the Crown Research Institute, which has a strong international reputation and client list in these fields.

And 10 have signed up to the Science-Based Targets Initiative. This involves some 600 companies worldwide that have set their emissions reduction goals to match the cuts climate scientists tell us we have to make.

In terms of ambition, the coalition announced this week it was lifting its pledge to act in line with a 1.5c temperature rise, from its initial goal of 2c – although members will have a choice which they will pursue.

It’s a big step up, Graeme Stephens, the chief executive of SkyCity, said. His company needs to cut emissions by 38 percent to meet the 2c target but 66 percent to meet the 1.5c target.

“The coalition’s new pledge shows that we are ambitious about reducing emissions with the intention of educating our people, suppliers, customers and the wider public along the way. From small businesses to large, every action on climate change counts and collectively our actions can be mighty.”

A broad sample of members’ goals, actions and progress on emissions is on the Coalition’s website. To foster learning and collaboration, the Coalition’s conference this week ran a series of well-attended workshops on many aspects of these carbon disciplines, such as setting targets, measuring and managing emissions, business reputation and consumer behaviour, and financing action.

What's holding them back?

The coalition admits, though, that progress on actual emission cuts is patchy: 24 signatories reduced their emissions in the past year to a level equivalent to taking 264,000 cars off the road; one signatory was unchanged; and 15 reported increased emissions, for two main reasons – an increase in business and/or improvements in the way they measured emissions.

The coalition’s report on its first year’s work doesn’t shed any light on ways to speed up progress. But it did say that the two biggest constraints are “a lack of commercial value” in such action and “competing business priorities.”

Those are causes of great concern, for two reasons. First the report suggests energy efficiency is the prime focus so far for coalition members as a way of achieving emission reductions. That’s the right place to start because those efficiency gains are almost always easy to make and give a quick financial payback. Thus, it’s surprising they apparently aren’t seeing value in that and or its being crowded out by other priorities.

The Climate Leaders Coalition has to be extremely blunt to National about its utterly irresponsible politicking and the damage it’s doing.

Second, and far more importantly, the absolute corporate leaders on climate around the world are working on profound, long-term changes in their technologies, business models, strategies, cultures, products and services. Their top priority is business transformation to create greater commercial value. We need such corporate examples here to lead the way.

Hopefully some might start to emerge, for example, from the Climate-X programme that Spark’s leading in conjunction with the coalition. It’s a three-stage process to test, incubate and mentor big new ideas for low emissions solutions.

Time to be blunt with National

Meanwhile the coalition has identified a big, urgent priority. It says the Zero Carbon amendment bill working its way through parliament has to be ambitious and have all-party support. Only then will the legislation give the country in general and business in particular the systems such as an independent Climate Commission, targets and policy certainty needed to drive our transformation to a low carbon economy.

But National is backing ever further away from such essential and constructive support, judging by its words and actions.

“The past two weeks have exposed the biggest climate change problem in this country. Cows? Nope. Cars? Nope. It's the National Party,” Simon Wilson wrote recently in his NZ Herald column.

The Climate Leaders Coalition has to be extremely blunt to National about its utterly irresponsible politicking and the damage it’s doing.

If the Coalition succeeds in bringing National onside, it will have done its members and the country an enormous favour. Our transformation to a low emissions economy will accelerate, as will the benefits from doing so.

If the Coalition fails, its members should abandon National and support political parties that take the climate crisis seriously.

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