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How do we get businesses engaged in helping address climate change?

Source: Thomson Reuters Foundation - Fri, 16 Mar 2012 14:53 GMT
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By Thin Lei Win

It's been a dilemma for decades: how to engage the private sector - and the billions of dollars and millions of employees it can bring to the table – to help tackle the problems climate change is expected to bring, including rising sea levels, more intense storms and worsening drought?

It’s long been argued that businesses are interested only in bottom line, not the public good, Will planting a few trees compensate for decades of environmental destruction? Businesses polluted the world in the first place and plenty are clinging to dirty technologies even as science demands change.

There are no easy answers. But, more importantly, there is now little time to trade blame, said experts at a panel discussion at the Second Asia Pacific Climate Change Adaptation Forum in Bangkok this week.

Scientists and activists are focused on sustainable development but the buzzword for companies is corporate social responsibility (CSR), which is still seen as philanthropy or a marketing tool rather than a focus on being accountable to society and the environment.  

Regardless of the semantics, "we have an urgency at hand," said Leena Wokeck, director of the Asian Centre for Corporate Social Responsibility (CSR Asia) in Thailand. "We can't really afford to live with failure” in engaging the private sector to fight climate change.

Scientists say the world needs to keep global temperature increases to below 2 degrees Celsius above pre-industrial levels to avoid the most dangerous impacts of climate change, but talks have failed to significantly reduce the greenhouse emissions blamed for global warming, putting the world on a path toward temperature rises at least double 2 degrees Celsius. 

On paper, action on climate change makes sense for business. Businesses could translate a reputation as good corporate citizens into higher profits. And if they don’t act, climate change has the potential to hurt supply chains and other aspects of business.


A case in point is last year's devastating floods in Thailand, which affected the production of Toyota and Honda cars as well as Seagate's hard disk drives and Canon's cameras. The floods also forced this week’s climate forum – originally scheduled for last year - to be postponed.

Governments and civil society need the private sector to act on climate change because they don’t have the resources to do it alone. Climate Change Adaptation, Engaging Business in Asia, a report CSR Asia produced last year, said "adaptation costs are estimated at levels that will be too high to be covered by public budgets and additional private sources of funding will be essential." 

Developing countries, where climate impacts will be the most severe, are projected to need at least tens of billions if not hundreds of billions of dollars a year to cope.

But it's not just a matter of money. The private sector could also bring in expertise, efficiency and a result-oriented culture.  

Yet partnership remains elusive. The point was driven home by the lack of private sector participation at the Forum - only two hands went up when participants were asked to identify themselves if they came from businesses.

Avijit Gautam, head of operations at carbon and sustainability advisory Emergent Ventures International, said, "What we've experienced working with both authorities and the private sector is that there is no conjunction between them, and that's a worry."

The only time they come together is after "a catastrophic event" like the floods in Thailand last year, he said. 


Part of the problem is the shorter-term focus of the private sector versus the longer-term problem of climate change. 

"CEOs have the same sort of tenure as a Prime Minister, so three to five years maximum," said Gareth Johnston of Sydney-based consultancy Future Ready. But climate projections look into the future 20, 50 or 100 years from now.

Another problem is the lack of "best practice cases" - aid-world speak for successful examples of corporations engaging in and benefitting from activities to adapt to climate change. 

The humanitarian sector is filled with best practices but, as Johnston said, "it makes no sense for businesses to tell its competitors what sort of strategies it got to minimise its risks or increase its profits." 

There's also a need to make climate science meaningful to busy CEOs who don't have the time to read through hundreds of reports or sit through days of presentations.  

Corporate apathy toward climate change could partly be explained by a lack of capacity, panellists said. A way to remedy this, according to Linda Yarr, director of Partnerships for International Strategies in Asia from George Washington University in the United States, is to produce business school graduates who are passionate about reducing social, economic and environmental inequality.

New graduates she’s encountered, she said, are exactly that.

One way of getting to the big companies is through their investors and shareholders, and already some major corporations are shifting their mindsets. For example, Toyota and BMW are looking at producing lithium-ion batteries that are better for the environment. 

But it's not just the big companies that have to contribute, said Mohiuddin Babar of Bangladesh's non-profit group Nature Alliance. Small and medium enterprises play a major role around the world.

The world, however, cannot expect businesses to be pro-active – unless, perhaps, they can see proven examples of success.

He recounted the tale of a village in Bangladesh situated at the edge of a forest being quickly cut down. Without access to gas, the villagers had been using the trees as firewood. They asked for loans from the bank for poultry farming but were turned down, "perhaps because (they banks) don't smell money," Babar said.

So the villagers set up a farm with help from the Nature Alliance.

"With poultry and cow dung, they made biogas and that's how they're cooking now. Now there's poultry, they're selling the eggs and they're no longer cutting the trees and businesses are coming in to look at (the village) for CSR programmes,” he said.


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