There is a growing movement that seeks the reduction of emissions by corporations, emerging from the resistance to the growing power and influence that corporations have over the products that the world consumes. In particular, the energy sector has billions of dollars in investments and capital and has the potential to stop the use of fossil fuels.
The Nyenrode Business University in Breukelen, The Netherlands hosted a conference Climate Responsibilities of Business that discussed the role of business in addressing climate change. Corporations and organizations that work to engage and support companies were brought together with civil, corporate, and educational institutions.
This activity was also undertaken with the visit of the Commission of Human Rights of the Philippines in relation to the National Inquiry on Climate Change (NICC) . The NICC conducted a series of hearings and inquiries in Manila, New York, and London last year to determine the impact of climate change on the human rights of the Filipino people and if the top fossil fuel producers of the world, or the so-called Carbon Majors, are fueling climate change.
According to Jan van de Venis, conference coordinator and a lawyer, “the role businesses play and the responsibilities they have in the story of climate change and human rights has two sides. There are ethical and legal aspects, but the subjects offer many chances as well.”
At the end of the conference, there was mutual recognition of the contradictions in society and what institutions needed to do. There is commitment from these institutions to a better world and they are working towards a common goal. However, these are not sufficient in getting the desired impact.
The business side of the climate change equation presented the actions investors are taking in order to mitigate climate impacts such as putting pressure on companies to disclose and to align business models to the Paris Agreement. Climate Action 100+ is an example of a group of investors actively diverting corporate actions and investments for the reduction of emissions. The group includes investors from major oil companies such as Chevron, Glencore, ConocoPhillips, Royal Dutch Shell, Exxon Mobil, among others.
This pressure has resulted in actions by corporations such as Shell to create transition plans and even tying the bonuses of executives to investments in renewable energy. Expectedly, criticisms were raised on this approach, as there are many who favor pulling funds out from oil and gas companies such as in the divestment movement. This is viewed more effective especially for companies with questionable approaches to human rights, such as the case of Shell and the human rights violations linked to their activities in Nigeria.
In the recent Vatican Dialogues on Energy Transition and Care for Our Common Home, Pope Francis met with chief executive officers of energy and investment fund corporations and declared a climate emergency, calling for a just and radical transition to clean energy.
The primary consideration for this transformation is to put a stop to investments on unopened fossil fuel resources. Closing the door on climate change begins with not opening the resource. Keeping fossil fuel reserves in the ground is an assurance that these products will no longer be sold and hence not burned up into the atmosphere. Investors, governments, and social advocates are putting pressure towards setting a cap on investments on exploration in the next few years. Can corporations move to divert their capital from exploration and into renewable energy?
There are “huge opportunities for some businesses,” emphasizes Van de Venis. “They can dive into markets that have not yet been conquered by other companies and sustainable companies have less trouble attracting and keeping young employees. Two useful advantages. In order to get businesses to take their responsibility for climate change, two things are needed: I call it the carrot and the stick. The carrot is the incentive for them to take action and work towards sustainability. The stick is there to reprimand, by taking legal action for example.”
There are five key processes that pressure corporations to transform:
At this point, fossil fuel companies are still the main drivers of climate change due to their activities. Impacts will occur and continue to worsen unless the transformation is realized. Corporations need to respond to these processes adequately, move towards transparency and disclosure, and use their resources to contribute to the much needed change to arrest the crisis that this and future generations are facing.