Companies to Pledge Action on Climate Change at UN Summit

September 22, 2014

While U.S. President Barack Obama and more than 100 other world leaders will meet in a summit devoted to climate change, the most tangible action on global warming this week may come from companies.

Mars Inc. and others will announce plans to phase out fossil-fuel use, companies including Unilever NV will endorse a tax on carbon and Statoil ASA and five other oil and gas producers will pledge to plug methane leaks.

“The leadership from companies has been remarkable and welcome,” Carter Roberts, the president of the World Wildlife Fund in Washington, said in an interview. “You will see a swirl of commitments.”

The United Nations Climate Summit runs all day tomorrow at the United Nations in New York, just before the annual meeting of the General Assembly. After the estimated 125 leaders speak, limited to four minutes each, specific pledges from companies will be discussed at an afternoon session Secretary General Ban Ki-Moon is hosting with executives from companies such as Air France-KLM, Siemens AG, Royal Dutch Shell Plc and McDonald’s Corp., as well as author Naomi Klein and former U.S. Vice President Al Gore.

See related story: Insurers Bonding with Climate Change Battle

Companies not participating also will feel heat: The Rockefeller Brothers Fund, which got its initial wealth from Standard Oil, will lead a group of institutions and individuals announcing they will end investments in companies reliant on coal and tar sands. Total divested funds now totals $50 billion.

Climate Negotiations

The aim of the summit, Ban said, is to gather momentum for climate negotiations later this year and conclude them at a meeting in Paris next December. The goal is to curb the release of carbon dioxide and other warming gases so that average global temperatures don’t rise more than 2 degrees Celsius.

“I’m really going to ask world leaders to show their political will and give a clear guidance and directions” to negotiators, Ban said in an interview Sept. 18. “I count on the U.S. and China, who are the biggest greenhouse-emitting countries” to “lead this campaign.”

Ban was among 310,000 who took to the streets of Manhattan yesterday to press for action in what organizers called the largest social demonstration in the city in a decade. New York Mayor Bill de Blasio, who also marched, announced a plan to cut the city’s emissions 80 percent by 2050.

“Since the fossil fuel companies have money, we have to have something on our side, and that’s people,” said Bill McKibben, the head of 350.org, the organizing group.

The UN summit took a symbolic hit after China, the world’s top carbon polluter, and India, third biggest after the U.S., decided not to send their top political leaders. That’s important because the last attempt at a global accord broke down in Copenhagen in 2009, when the talks dissolved into finger- pointing between rich and poor nations over which group should move first on emissions reductions.

Commitments Sought

With the heavy lifting of the negotiations months away, officials aren’t expecting new breakthroughs from the government leaders this week, and the final deal is likely to fall short of the far-reaching legal framework of the 1997 Kyoto Protocol.

“This really is not a negotiating session. It was never intended to be that,” Todd Stern, the lead U.S. State Department negotiator, told reporters last week. “What would be very important is that we have strong indications of seriousness and commitment by the leaders.”

In the meantime, much of the focus is on what companies are doing or should do.

“Policymakers need to hear the voice of business, because there is the conventional wisdom that they don’t want to do anything,” said Nigel Topping, executive director of CDP, a firm that tracks companies’ disclosure of their emissions. That’s not the case, “and we think that could shift the dynamic.”

Carbon Footprint

Some corporate leaders see cutting their carbon footprint as an economic necessity or business opportunity, Topping said. Already more than 150 companies worldwide use an estimated price on carbon to determine which long-term investments make sense, up from 100 just a year ago, CDP said in a report released last week.

To be sure, advocates for curbing carbon emissions — even among the corporations — say that the company actions won’t come close to addressing the problem.

“Absolutely, we can’t do it alone, not as a business, not as businesses and not as individual actors,” Jeff Seabright, head of sustainability at Unilever, said in an interview. “It will require governments to take action.”

Candy-maker Mars pledged in 2010 that it would transition to full renewable power for its factories and offices by 2040, and today it’s signing on with other companies ready to take that same pledge.

“We’re looking to drive more and more people into this way of thinking,” Kevin Rabinovitch, director of sustainability at Mars, said in an interview.

World Bank

The World Bank corralled more than 250 companies in support of a carbon price, which means either a tax on carbon or a cap on carbon and an emissions trading system, including companies such as Unilever and Swiss Re.

“You are getting an affirmation that carbon needs a price,” Rachel Kyte, the World Bank vice president responsible for the effort, said in an interview. “There is more and more attention on the exposure to carbon assets.”

The World Bank statement won’t identify a specific cost or policy, she said. She declined to identify the full scope of the commitment before it’s unveiled tomorrow.

Separately, environmental advocates have pulled together a group of companies that are set to announce their pledge to make sure their purchases of palm oil or soy products don’t lead to deforestation. Forests absorb carbon dioxide, and clearing old forests for farmland or palm trees is a major cause of global warming. Agriculture is responsible for a fifth of total global emissions.

Methane Reductions

And six oil and gas producers, including Statoil and Houston-based Southwestern Energy Co., will join with environmental groups to pledge reductions in the methane they release.

Not all of the attention on companies will be welcome.

Students and activist investors have rallied around the effort spearheaded by 350.org to persuade foundations, corporations, universities and others to divest from the 200 companies with the largest share of coal and oil resources, including India Coal Ltd. and Exxon Mobil Corp. With the Rockefeller Brothers Fund, managing assets of about $860 million, set to pull out of coal and oil sands, and to look at phasing out investments in oil and natural gas, the effort will get a symbolic boost.

“It’s not a huge economic lever, but it does begin to send financial signals and it brings visibility to the issue,” Stephen Heintz, president of the fund that is separate from the larger Rockefeller Foundation, said in an interview. “This is like a snowball, and it’s going to get more and more mass as it rolls forward.”

Desmond Tutu

In another symbolic boost, South African cleric Desmond Tutu, who helped spur calls for divestment that led to the end of apartheid in his home nation in the 1980s, will offer a video in support of the cause during the meetings.

Asked about Exxon being targeted by the divestment effort, a company spokesman referred to a report it released earlier this year.

“Energy use and mix evolve slowly due to the vast size of the global energy system,” the Exxon report said. “We believe the transition to lower carbon energy sources will also take time, despite rapid growth rates for such sources.”

Nagendra Kumar, Coal India’s technical director, said, “We are fully conscious of our responsibility towards the environment and taking every possible step to help the cause of environment.”

The UN’s lead climate negotiator said the meeting was a “unprecedented collaboration” that will boost the negotiations on a global accord.

“Every single sector that has emissions will be here to share what they can do,” said Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change. “This is the moment in which we all should stand up. The shift to low carbon has started and is irreversible.”

And that pressure on companies was on display in the streets of New York City yesterday. Thousands of people chanted, sang and shouted as they marched from Central Park past Times Square and Bryant Park. Organizers said the People’s Climate March was to be the largest such gathering ever, and meant to pressure leaders to address the threat of warming temperatures, rising seas and more intense storms.

–With assistance from Rajesh Kumar Singh in New Delhi and Christopher Martin in New York.

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