World leaders are into the second week at COP 22 in Marrakech, ‘writing the rule book’ on how to achieve the commitments to climate action laid out at Paris in 2015. As it stands, 110 parties out of 197 have ratified their commitment, showing world unification at a time where collation seems sparse.
The global transition towards a low carbon economy is expected to accelerate as a result of the Paris Agreement and multiple initiatives have developed over the past two years to support private companies in specific sectors to move away from the carbon intensive industry or to simply reduce their greenhouse gas emissions. Examples include:
- the airline industry recently adopting a resolution through the International Civil Aviation Organisation (ICAO) to achieve carbon neutral growth from 2020
- institutional investors increasingly required to disclose the carbon footprint of their investment and manage their risk exposure from carbon-intensive industries
- many global corporations advocating for a clear, long-term policy signal such as carbon prices
The low carbon transition
Research in 2016 found that 14 FTSE 100 companies offset their carbon emissions. This is interesting when considering offsetting as a complementary activity to reducing emissions and the useful role it can play in a wider emissions management strategy. For example, carbon offsets can be used as a benchmark for setting an internal price for carbon when a company is looking to use a price for their own reductions or to stimulate future investments and anticipate future regulation.
Offsetting can also help companies engage with their employees around the project, especially if the project also generates net positive social impacts. This is becoming increasingly important when companies consider the role they can play in meeting the UN Sustainable Development Goals.
It’s not just about emissions
EcoAct’s award-winning Darfur Low-Smoke Stoves project generates numerous positive social impacts. The project enables women, in the post-conflict area of Darfur, to transition away from cooking with unsustainably sourced and harvested wood and charcoal, instead using LPG as a cooking fuel. The project, implemented by local women-led NGOs, reduces carbon emissions through the more efficient stoves and has countless impacts on beneficiaries:
- Indoor air pollution is reduced, improving health. This is critical when considering the fact that cooking on open fires in the home causes 13,900 deaths annually in Sudan.
- The project reduces energy poverty due to the greater affordability of LPG. Families can make savings of up of to 40% of household income on energy expenditure.
- LPG cookstoves require less time, enabling more time to be spent with their children or on additional income generating activities.
- The project trains and builds the entrepreneurial capacity of the women who manage the micro-finance scheme.
By signing the Paris Agreement, governments have signaled their willingness to address the impacts we face from a warming world and changing climate. Companies will have to play a role in meeting GHG reduction targets and this will require a strategic approach to managing emissions and reducing impacts. Projects such as Darfur Low-Smoke Stoves can help drive forward engagement and environmental strategy, whilst making a meaningful impact on the communities where they are based.
This blog was first posted on the Aburi website