The so-called 'Paris effect' means more than half of leading global industrial corporations now support progressive climate policy, but some cross-sector trade associations are still obstructing reform
COP 21 was remarkable for many reasons - the unprecedented level of political consensus for climate action, the smooth handling of the negotiation process, the revelation that Arnold Schwarznegger knows some vegetarian body builders.
But perhaps the most remarkable aspect of the negotiations was the extraordinary level of engagement from business leaders around the world, who travelled to the French capital to unequivocally declare their backing for ambitious climate action and unveil major new initiatives to drive investment in green economic development.
Now new research published today by UK-based non-profit Influence Map suggests this business presence at COP 21 has produced a "tipping point" in corporate climate policy, with more than half of the world's most powerful industrial companies now backing climate action to curb dangerous levels of global warming.
Influence Map analyses the activities of the top 100 companies from the Forbes Global 2000 index, excluding state-owned or financial firms. It looks at a company's own promotional information, information from third parties, disclosures to government, and external data to score firms on their support for specific policy action on climate change.
The report suggests COP 21 "triggered a significant change in corporate behaviour" throughout much of the index, while the average score for climate policy engagement for companies in the top 10 of the index rising from a C+ to a B.
Dylan Tanner, executive director of Influence Map which conducted the analysis, said this jump in support was largely due to the success of major climate campaigns that saw hundreds of businesses pledge their support for specific climate policies through initiatives such as the American Business Act on Climate Pledge and the We Mean Business text proposals.
"These all combine to create the 'Paris Effect' in terms of policy support," he told BusinessGreen.
The growing level of support for climate action is a result of firms starting to realise that progressive climate policy will actually be crucial to future business plans, he adds, noting that this realisation is particularly apparent amongst companies transitioning to renewable energy, electric vehicles, or other clean technologies.
"Traditionally in the US companies do not want to be regulated," Tanner admits, but this default position is shifting as firms realise obstructing climate policies will make it much harder for them to fulfil environmental pledges now expected by consumers. "If you don't have the policy support for renewable energy it's going to be more expensive to roll it out," he warns.
However, while Paris has proved a catalyst for shifting many companies' stance on climate action, a very real threat remains in the form of cross-sector trade organisations, according to Tanner. He says Influence Maps analysis shows 95 per cent of the firms included in the rankings belong to a trade association that continues to obstruct climate action.
This is because fossil fuel companies continue to wield a disproportionate influence in many trade organisations, according to Tanner. "The trade associations - especially the ones that cover many sectors like BusinessEurope and US Chamber of Commerce - the companies who are obstructing [climate action] dedicate more resources within those trade associations, and so have a disproportionate voice," he says.
The bodies - and their stance on climate action - pose a major threat to the success of crucial climate policies such as the Obama administration's Clean Power Plan, he suggests. He also predicts fossil fuel firms and associated businesses will be working hard over the next 18 months to manoeuvre trade associations into blocking or delaying such legislation, and calls on other firms to fight back and seize greater control of trade association's climate policy agenda.
"The other companies have to step up and say 'we fund the majority of these trade associations budgets and therefore we should determine the agenda'," he says. "And they can then specifically state what that is in terms of climate policy."
A number of progressive firms have privately indicated a desire to mount such a fightback, although a number of high profile firms have also exited trade bodies in recent years arguing they cannot support organisations that adopt an obstructionist position on climate policy.
It seems that while Paris was a breakthrough moment across the political and business spectrum, there is still a hard road ahead before the world can transition to the agreed 2C pathway. Firms now need to focus some of the post-COP energy into ensuring the 'tipping point' in favour of climate action reaches beyond their boardroom and infiltrates the trade bodies that purport to represent them.
This article is part of BusinessGreen's Road to Paris hub, hosted in association with PwC.
