In the fight against climate change, the United Nations conference in Paris in December 2015 was a watershed moment. The current conference in Bonn, Germany, is an opportunity to reflect on progress – but also on the scale of the challenges ahead.
Perhaps the most encouraging change over the past two years has been a tangible shift in attitudes among big business.
Companies have an important role to play in the move to a low-carbon economy. Some help governments build new infrastructure, such as low-carbon energy generation and transport, while others research green technologies with the potential to revolutionise the response to climate change in the years ahead. And, as major consumers of energy and resources, companies can help reduce carbon emissions globally by making responsible choices themselves.
Many corporate leaders now recognise that it is an economic imperative to reduce their exposure to high-carbon, high-polluting activities. They are playing a more and more prominent role in public debate. More than 100 expressed public support for the recommendations from the Taskforce on Climate-Related Disclosure earlier this year, for example, calling for clear rules requiring companies to explain their strategies for adapting to climate change.
Businesses are also setting themselves stringent targets to make their operations greener. HSBC is now aiming to source 100 per cent of its electricity from renewable sources by 2030, with an interim target of 90 per cent by 2025. We are one among many companies aiming to go all-renewable: the RE100 initiative brings together more than 100 other businesses committed to using 100 per cent green energy.
At the same time, institutional investors are also increasingly sensitive to the risks and opportunities associated with a shift to low-carbon. Two-thirds are planning to increase their green investments, according to a recent HSBC survey. This means that the economic case for businesses to respond to climate change is increasingly compelling.
The shift in attitudes is welcome, but there remains a huge amount of work to do to deliver on the promises made at the Paris conference. It is important to finalise the details of a framework that enables everyone – public sector, private sector, investors and civil society – to play their part.
Countries need consistent guidelines on how to measure and report on their greenhouse gas emissions. Consensus about how companies should report on climate change would help galvanise further action at a corporate level.
Clarifying these rules would also help to unlock the financing needed for green projects. An estimated USD100 trillion of investment in infrastructure, including renewable energy plants, low-carbon transport and energy-efficient buildings will be required over the next 15 years.
Financial institutions can help companies raise funds and direct capital towards low-carbon opportunities. At HSBC, we are aiming to intensify our support for green and sustainable projects, and are committed to providing USD100 billion of financing and investments by 2025. It will take a broader move across the financial industry as a whole, however, to raise capital on the necessary scale, and to give private investors the confidence to make investing in green infrastructure part of their “business as usual”.
The case for climate action is urgent, with substantive change in the next few years vital for heading off irreversible long-term damage. The conference at Bonn is a chance to keep up the momentum, and make further much-needed progress.