Will Companies Solve Climate Change Before Countries?

I just spent a week at the 15th Annual Delhi Sustainable Development Summit in India, a four-day eco-extravaganza for hundreds of participants from government, business, academics, and community organizations. 

India, the world’s third largest emitter of greenhouse gases, may hold the key to a global climate change deal in Paris later this year (China and the U.S., the world’s two biggest emitters of greenhouse gases or “GHGs,” have already made bilateral commitments). It was therefore a fitting location for a global reality check on whether economic growth for 9.6 billion people worldwide by 2050 can be “sustainable.”[1] The takeaways were both sobering and exciting.

First, as a backdrop to this Summit, Indian Prime Minister Narendra Modi has set forth a distinctly mixed agenda for sustainability in his first nine months in office. On the one hand, based on his visionary track record as Chief Minister of the state of Gujarat (where he championed solar power and energy efficiency) he has set out a national goal of 100,000 megawatts of solar energy by 2022.[2] Make no mistake, that’s a lot of clean energy (a typical nuclear power plant is 1,000-2,000 megawatts). On the other hand, India gets almost 70% of its power today from fossil fuels and he has loosened rules for exploitation of domestic coal and made deals with Australia for importing still more.[3]
So the Summit provided an opportunity for numerous officials to clarify which path India will follow. Mr. Susheel Kumar, Secretary of India’s Ministry of Environment, Forest & Climate Change, said his country’s policy depends entirely on developed nations first meeting their commitments under the Kyoto Protocol (part of the UN Framework Convention on Climate Change that has largely failed so far). Continuing the “developed countries must go first because they created the problem” approach implies that India won’t get serious about GHG reductions for quite some time.

In response, U.S. Ambassador to India, Mr. Richard Verma, prefaced his remarks about America’s commitments by saying “we all know that developing countries are responsible for 60% of the world’s GHGs,” making it clear that the U.S. policy will also remain stuck in outdated Kyoto-thinking, requiring the emerging economies to make serious pledges to cut GHGs first. In other words, despite both speakers bragging about measures in their countries to go green, the old divides remain firmly entrenched.

Many other speakers from all over the globe reiterated a similar mantra, highlighting great achievements in low-carbon development projects and technologies while standing clearly on one side of that developed-developing nation divide. Mr. Lars Andreas Lunde, Deputy Minister of Climate and Environment for Norway, emphasized the need to align UN Sustainable Development Goals with the any new climate change agreement, but failed to mention whether his oil-rich nation might reduce its sale of fossil fuels or support the transition to cleaner alternatives. Sort of like the local drug pusher handing out brochures on breaking addiction with one hand while selling you heroin with the other.

So what was said that might offer more hope of solving this massive problem in our lifetime?

Unilever CEO Paul Polman gave a speech that would have been promising and inspirational coming from a member of Greenpeace, but the fact that the CEO of a company ranked #110 on the Forbes Global 2000 list of biggest companies in the world, was astonishing. In sum, he tied the success of his company today, and well into the future, on Unilever being an active partner in reducing GHGs, calling on all governments to put a price on carbon to ensure sufficient reductions before it’s too late, saying “what business can not measure, it can not treasure, so don’t be shy [about pricing carbon].” He also demanded truly sustainable use of natural resources, such as water and trees, because “companies who invest in sustainability have a lower cost of capital and that translates into higher profits.”

Other speakers from business repeated similar calls to action; a willingness to pay a price on carbon; and similar success stories from finding new ways to make their companies more sustainable. If the Summit was a microcosm of policy and action on climate change and global sustainability challenges, it was clear that the solutions might lie with smart CEOs and not with hesitant politicians.


[1] http://www.un.org/en/development/desa/news/population/un-report-world-population-projected-to-reach-9-6-billion-by-2050.html and http://theweek.com/articles/535221/obama-wont-able-repeat-china-climate-change-deal-india-heres-next-best-thing

[2] http://op-talk.blogs.nytimes.com/2014/09/15/its-a-season-of-deadly-rains-in-india-does-the-new-prime-minister-believe-in-climate-change/?_r=0 and “Renewables are Making India the New Investment Destination”, by K.S. Popli, Chairman & Managing Director, Indian Renewable Energy Development Agency, as presented at the UNIDO Forum on FDI in Green Sectors in Developing Countries, Busan, S. Korea October 23, 2014.

[3] http://www.smh.com.au/federal-politics/political-news/indian-prime-minister-narendra-modi-to-back-coal-renewables-in-address-to-parliament-20141117-11og0o.html