Many Chief Executives and Chief Financial Officers have recognized that sustainability is becoming a core part of their business strategy, similarly, more Prime Ministers and Finance Ministers need to build these issues into their overall economic policies.
Juan Costa Climent
Global leader, Climate Change and Sustainability Services, Ernst & Young
The UN process has demonstrated the challenges of formulating multilateral policy on climate change.
Although progress has been made, a global deal to replace the Kyoto Protocol has proved elusive. But even if the process has been frustrating at a policy level, it has succeeded in raising the profile and importance of climate change among society and the business community.
Besides climate change, increased natural resource scarcity, consumer pressure and a recognition that improved energy efficiency is good for business have encouraged many companies to ramp up their commitment to sustainability and emission reduction.
By streamlining their operations and cutting energy usage, companies have an opportunity to generate bottom-line savings and improve their competitiveness. Among our survey respondents, 44% say that their investment in sustainability has increased over the past year, while another 44% say that it has remained the same.
Recognizing climate change as an opportunity
More than half (54%) of the respondent surveyed said that addressing climate change was an opportunity for their business. Participants from the manufacturing sector and from the Middle East and Africa were particularly enthusiastic.
Does your company see
climate change(and the
steps being taken to address
it) more asa threat or an
opportunity for your business?
Increased demand for energy efficiency, renewable energy sources, energy efficient buildings and related services such as consulting, advertising and legal were identified as the main opportunities arising from climate change. The rapid development of the cleantech industry offers one example of this. According to our fourth annual global cleantech report, Seizing transformational opportunities, US$243bn was invested in clean energy worldwide during 2010.
Despite these opportunities, many companies remain unsure about how to take advantage of them. Although 58% of respondents were personally very concerned about climate change, only 34% say that their companies feel the same way.
This suggests that companies have a long way to go before they are taking advantage of the opportunities and responding to the threats of climate change in an appropriate way.
Do you think your company
is takingmaximum advantage
of the business opportunities
from climate change?
The role of government
Governments can help by educating business and making it easier for them to take advantage of opportunities and incentives. This is partly a matter of funding, but it is also about setting out clear structures and creating “turnkey” solutions for companies to follow.
It is important to have a clear, predictable regulatory framework that can provide certainty for business and encourage the right behavior. However, this process should not be entirely one-way.
Governments can also learn much from the experience of business in trying to incorporate climate change into their strategies.
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