The earth has moved: Big business's radical climate shift is now unstoppable | RenewEconomy

The earth has moved: Big business’s radical climate shift is now unstoppable

There is now unprecedented momentum towards participating in the transition to a low-carbon economy. It’s unstoppable now.

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US Secretary of State John Kerry delivers a speech during the COP 21 United Nations conference on climate change in Le Bourget, on the outskirts of Paris, France December 9, 2015. REUTERS/Mandel Ngan/Pool - RTX1XWST

The Conversation

US Secretary of State John Kerry delivers a speech during the COP 21 United Nations conference on climate change in Le Bourget, on the outskirts of Paris, France December 9, 2015. REUTERS/Mandel Ngan/Pool - RTX1XWST
US Secretary of State John Kerry delivers a speech during the COP 21 United Nations conference on climate change in Le Bourget, on the outskirts of Paris, France December 9, 2015. REUTERS/Mandel Ngan/Pool – RTX1XWST

The most surprising revelation here at the Paris climate conference has been the astonishing shift in the world of investors over the past 12 months. There is now unprecedented momentum towards participating in the transition to a low-carbon economy, and the view at the “big end” of the conference is that a strong agreement will provide an extra shove. It’s unstoppable now.

It’s not that investors and chief executives have had an ethical epiphany about climate change; it’s just that they can see where the world is headed, and it makes sense to be part of it rather than being stuck in the economy of the 20th century. As US Secretary of State John Kerry said yesterday: “While we’ve been debating, … the clean energy sector has been growing at an incredible rate.”

Contrast that with Australia, for instance, where the attitude of the business community has always been “we don’t want to be at the forefront of global action”. The old fossil fuel companies still have the dominant voice in the public debate and in the policy process. It may take another year for what’s happening across the world to sink in, but the complaint will increasingly become “we don’t want to be left behind”.

So what are the dimensions of this shift in business and investor sentiment? I wrote last week about how investors are running ahead of governments, as shown for example by the quiet revolution in the growth of green bonds, and by the Montreal Carbon Pledge under which large investors have committed to measuring and reporting on the carbon footprint of their portfolios. In a little over a year, this pledge has been signed by investors controlling more than US$10 trillion in assets.

More immediate abatement action is to be found in the so-called Science Based Targets initiative, under which 114 large corporations have pledged to reduce their emissions in a way consistent with the 2℃ objective. Big corporations including Ikea, Coca-Cola, Dell, General Mills, Kellogg, NRG Energy, Procter & Gamble, Sony and Wal-Mart have already signed up and are implementing plans.

Dell, for example, has pledged to reduce emissions from its facilities and logistics operations by 50% by 2020 (relative to 2011 levels), and to reduce the energy intensity of its product portfolio by 80% by 2020.

These corporations have not decided that principles should outweigh profits; they have decided that, looking over the next several years, sustaining profitability requires that they shift to low-emission energy. One factor weighing on corporate minds is exposure to risk in energy markets, which are likely to be more volatile and uncertain partly because of the growing challenge posed to fossil energy.



Central bankers are now anxious that a rapid, structural shift in energy markets and the destruction of asset-value in some of the world’s biggest companies may disrupt the global financial system. As I reported, the governor of the Bank of England Mark Carney speaks of the need for an “orderly transition” to a zero-carbon economy.

This unprecedented business commitment feeds into, and is partially stimulated by, the Lima-Paris Action Agenda, which wound up yesterday and must be considered one of the standout successes of COP21. The number of mayors, governors, chief executives and investment managers who have arrived here to declare publicly their commitment has been unparalleled.

Yes, the message of this conference is that something big has shifted in the world.

Source: The Conversation. Reproduced with permission. 

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11 Comments
  1. sbean 5 years ago

    And that “something big [that] has shifted” is the rhetoric. You might check the track records of those corporate executives and politicians on sticking to their promises (if these can even be considered that).

    • suthnsun 5 years ago

      I doubt that the rhetoric is ‘shifty’ sbean. It’s taken a lot to get here, I’ll try to enjoy it and see what comes for now..

    • john 5 years ago

      The CEO of BHPB said he “wants a price on carbon” that is the biggest miner so it is rather a bold statement which has to be taken notice of.

      • Kevin Williams 5 years ago

        BHP-B means it. They are spending A$100m/year towards R&D in low-zero carbon technologies and thats now. Moving forward it is undoubtedly going to be more.

  2. greenmail 5 years ago

    I can imagine the banks are nervous and advocating an orderly transition. They are likely to be the last coal shareholders left holding the worthless bag. The rush to the exit for many shareholders has started and the banks are trapped. If they exit now at a good price they will be accused of starting a stampede and being irresponsible, if they delay they will burn their shareholders.

    Unfortunately their normal political representative in Australia is the LNP and they are about to shaft the banks because of their climate denialist stupidity. This will damage coal and bank shareholders and deny any chance for orderly movement.

    • Kevin Williams 5 years ago

      Good perspective. Many people stand to get burned when ‘good men do nothing’.

  3. Ian 5 years ago

    I take it that miners like Peabody, Anglo American and Glencore have lost so much value that they cannot continue their coal mining operations. Is that the case? What would happen if there is a sudden turn around ( hypothetically speaking) in the demand for coal and the coal price recovers? Would these mining operations recover and continue business as usual? Or have they lost so much value that they cannot recover in this scenario.

    • patb2009 5 years ago

      if demand spikes, and prices spike sure, their stock value goes up,
      but that’s not happening, the megatrend is now for a growth in small scale PV and large scale wind. There is almost psycho growth in small PV, 5-10KW systems and Large Wind farms at 150 MW or more… This along with demand destruction is killing coal… I have a rather ordinary house, we swapped most of the Light fixtures for LED lights. instead of 1-3 100 watt bulbs running much of the night, now we have 1-3 100 Watt equivalent LED bulbs running, that’s about 13-40 watts running. Multiply that by 100 million households in the US and that’s a demand destruction of some 25 GW… That’s 25 Nuke plants or 100 coal plants that don’t need to run at night. Rinse lather repeat for china, india, japan, Germany, EU, and that’s probably close to 1000 coal plants going offline because of light bulbs. Coal power to a first order died about 2 years ago and now the corpse is twitching…Give it about 5 years and we will see a massive shutdown of coal power plants.

      • Kevin Williams 5 years ago

        Add in the solar-wind weakness breaker – storage and you have a compelling case to head for the hills if you are holding interests in carbon based energy.

        • Jens Stubbe 5 years ago

          No storage is needed for renewables. Humanity has so far produced batteries that all combined if they were grid connected could store 10 minutes of average electric output.

          Forget grid scale storage of electrons in batteries because even if you in windy regions such as in Denmark supplied the entire electricity need with state of the art wind turbines you would still need to store about 48 hours of average electricity consumption. Denmark is almost a best case scenario and even if you could use those numbers on a global scale you would need to produce 288 times the battery capacity that has ever been produced by humanity.

          Grid scale battery storage is not the answer and will never be.

          80% of energy consumption is not for producing electricity so batteries can only ever contribute to solving a limited part of the mess with fossils.

          The proper choice is to combine all sorts of renewables and to over provision and to begin storage of energy as heat and moreover to challenge crude oil as the primary source for the petrochemical industry.

          Synfuel based upon CO2 and cheap excess renewable energy is not that far from being directly price competitive even with the current oil price that is unsustainable for the oil industries and the oil countries.

  4. patb2009 5 years ago

    1) The global multi-nationals are convinced Green Energy is cheaper then Brown Energy, so they have moved over hard… If you own 10,000 retail stores, why not put PV panels on the roof, it’s a fixed part of the capital investment budget and will save a lot of utility bills… Now that the ROI on these is big, they are roaring to get into that.
    A nice steady 20-30% ROI, right now makes every other investment look stupid, so why not get into at least as much as you consume.

    2) The central bankers are worried about disruption… Funny, they don’t care when your 401K or your employer tosses you…

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