By Andrew Petersen, CEO, Sustainable Business Australia, 5 June 2017
By 2020, more people will have mobile phones than have electricity or running water in their homes or villages, connecting billions of people in unprecedented ways. The rapid pace of technology is also opening up new ways of tracking resources, increasing efficiencies, and accelerating our unalterable path to a decarbonized world.
Technological disruption is having a major impact on the private sector, forcing and empowering companies to re-evaluate their business models as customer demands change, investors consider environmental externalities, and operations transform. In short businesses increasingly view sustainability as critical to their bottom line. The private sector is already profoundly invested in this future. It makes good business sense. This is the new reality.
So on this World Environment Day, let’s give a shout out to US business. Why?
US companies such as Apple, Disney, facebook, GE, Google, HP, Microsoft and Walmart, who publicly committed to a low-carbon future, are already seeing the benefits of acting on sustainability. Increased innovation, reduced regulatory uncertainty, strengthened investor confidence, improved profitability and greater competitiveness all make the argument compelling. They have also brought the public along on their journey, regularly communicating with customers and giving them even more reasons to like their offering. As I said it makes good business sense.
Three weeks ago in an open letter to US President Trump, CEO from Cargill and 3M joined 28 other US corporate leaders who said the Paris Climate Agreement, the 195-nation agreement to limit man-made climate change, would help American companies become more efficient and competitive. Even coal and other companies in energy provision had lobbied the Trump administration to stay in the Paris Agreement.
On the day Mr Trump announced he was taking steps to withdraw from the agreement, Hewlett Packard Enterprise released a comprehensive supply chain management program based on climate science, which provides suppliers with the tools they need to develop a customized plan to reduce their own emissions. It also drives a global standard for supplier greenhouse gas emission engagement and abatement. The program will require 80 per cent of the company’s manufacturing suppliers to set science-based emissions reduction targets by 2025.
Importantly, this is not an overnight initiative. This is a competitive business initiative. The S&P Index is one of the most widely followed barometers of the US economy and conditions for large-cap’ public companies in the capital markets. Just over five years ago, under 20 per cent of S&P 500 companies reported annually on their sustainability, corporate social responsibility, environmental, social and corporate governance performance and related topics and issues. Last year, over eighty percent of companies reported, signaling a steady embrace by large-cap’ companies of annual sustainability reporting.
In contrast and closer to home, the Australian Government only reports on the State of the Environment every five years. The 2016 report said, “Australia’s built environment, natural and cultural heritage, and marine and Antarctic environments are generally in good condition.” However, this report only looks at the environmental lens of sustainable development agenda and not as a broader issue as business does. The last comprehensive government piece of work was by the National Sustainability Council (established 2012) and its May 2013 report “Sustainable Australia Report 2013: Conversations with the future”. Sadly, the Council was abolished in November 2013 and little has happened since then. SBA considers that it is time for the resumption of a national strategy on sustainability, reinstating this important work.
These private sector acts of dedicated, broad participation, and real leadership from some of the world’s biggest businesses and some governments and parties, along with coalitions like We Mean Business are becoming increasingly significant. Their work is critical as the impacts of climate change begin to affect everyday life and the planet as a whole creating significant economic, health, national security and ecological risk.
Cross-sector and public-private collaboration is imperative to scale up and accelerate environmental solutions, and help shape and support delivery of the Paris Agreement and the Sustainable Development Goals. In order to secure the promise of Paris and to meet the Sustainable Development Goals science has told us we must bend the curve of emissions and now.
So, while some but not all of today’s political class continue to prognosticate and prosecute the problems of the past, it is business, states, cities, communities and civil society that are addressing the rapidly developing, innovative systems of the future and meet the climate turning point. And that’s not just for great for American jobs, investment and economic growth, but also for the entire global community. As things now stand, when America wins – we win. But that won’t stand true for too much longer at the current rate. As the new French President, Emmanuel Macron, said last week – ‘Let’s make our planet great again’.