Climate Changes: It Won’t Be a Picnic for Businesses

Why would businesses focused on making profit care of climate changes? The fact is, not only scholars but also everyday practices show that climate catastrophes cause direct commercial losses. If in the nearest century the global temperature goes 4 degrees up, and this is exactly the present climatologists’ forecast, typhoons, draughts, and floods will cause such losses that it won’t be a picnic for either big or small businesses.

The report of the University of Cambridge forecasts 45% reduction of costs of shareholders’ portfolios in connection with climate changes related waves of fears rolling through the world markets, Kommersant wrote. Some companies have already experienced this. Last year, a СЕО Unilever official claimed that his company keeps losing about $330 million annually because of cataclysms caused by climate changes.

In the light of these data, there is no surprise that the Global Commission on Business and Sustainable Development was initiated by Unilever President Paul Polman and the former United Nations Deputy Secretary General Mark Malloch-Brown.

"A massive prize awaits business if it successfully ushers in an era of shared prosperity and increased sustainability," Co-Chair of the Commission Mark Malloch-Brown said. "Governments and international organisations alone cannot build the future we need. Business is the key to accelerating the transition."

“There is no business case for enduring poverty. We have an opportunity to unlock trillions of dollars through new markets, investments and innovation. But to do so, we must challenge our current practices and address poverty, inequality and environmental challenges. Every business will benefit from operating in a more equitable, resilient world if we achieve the Sustainable Development Goals,” Unilever President Paul Polman pointed out.

On the eve of the Paris Summit, representatives of the international business and advanced territories expressed their readiness to be at the head of converting the world economy to no-carbon development. They volunteered to set goals on reduction of CO2 emissions, invest in clean technologies, and gradually withdraw money from “dirty” industry branches involved with fossil fuels.

Studies of the CitiGroup referred to by Kommersant showed that warming might “melt” up to $72 trln of global GDP. Another report published by the Nature magazine comes to the conclusion that the global warming might reduce average world revenues by one fourth in the average. Temperature growth for four degrees Celsius will seriously affect such sectors as agriculture, real estate, forestry, and many other. Climate changes will create unfavorable environment for businesses of any scale.

Slowdown of climate changes will not be cheap, experts say. Developing countries will need $100 bln of new investments within the next forty years to provide for sustainability of their economies against climate changes. Cost of mitigation of outcomes of climate changes will cost approximately $140–$175 billion annually up until 2030. The gigantic financial lead will be beyond the strength of national governments.

Representatives of Russian businesses do not want to stay aside any more. Russian billionaire businessman Oleg Deripaska, generally quite skeptical about the international climate process, spoke in favor of introduction of a global tax on greenhouse emissions. He had proposed this on the sidelines of the UN Climate Conference in Paris. As the RSEU Secretariat has already informed, RUSNANO Director General Anatoly Chubais had proposed introduction of carbon nano tubes which should help solve the problem of climate changes on the global scale.

Major Russian companies, such as Gazprom, LUKOIL, Surgutneftegaz, NOVATECH, Uralkaly, EvrAz, and many others take part in the CDP program and voluntarily provide data on their greenhouse gas emissions.

RUSAL, Sberbank, RUSNANO, RusHydro, and Ingosstrakh had announced their participation in the “Russian Partnership for Climate Preservation” Program and on the eve of the Paris Summit appealed for bringing together efforts for reduction of the impact on the environment and prevention of climate changes. The Russian businesses’ appeal says, “We confirm the necessity to bring our activities onto the trajectory of low-carbon ‘green’ economy and we will strive to provide for our production to meet its standards.” Russian companies believe that “reduction of greenhouse gas emissions might be achieved at the account of bringing together efforts of all states and focusing them at implementation of essentially new technologies in the energy efficiency sphere and expansion of renewable energy sources employment.” Businessmen pointed out that it is necessary to provide equal opportunities in the international business competition for all participants of this process and also to implement market mechanisms for stimulating businesses to convert to new manufacturing technologies.

Representatives of public environmental organizations have not once stressed the necessity to withdraw barriers from and expand opportunities for investments for national businesses interested in implementation of green projects. Removal of subsidies from fossil fuels and support to and implementation of renewable energy would allow Russia to develop in the climate trend and give a true new impulse to the development of green technologies.