Climate change mitigation and role of private sector

With global temperatures rising, along with changing weather patterns, sea-level rise, increases in droughts and floods, the world’s most vulnerable populations are facing ever-increasing risks, food insecurity and have fewer chances to break out of poverty and build better lives, according to ICCB quarterly News Bulletin (April-June’21) published Monday. 

While the International Chamber of Commerce (ICC), The world business organization welcomes announcements at the US Leaders’ Climate Summit and G7 meetings of increased pledges for climate change mitigation and finance, these pledges do not yet place the world on track to achieve committed UN Climate Change Conference (UNFCCC) Paris Agreement actions. According to Climate Action Tracker, the sum of all the targets submitted so far would limit global warming to an estimated 2.4°C by the century’s end. This is still short of limiting global temperature rise by 2°C – ideally 1.5°C – by the end of the century as per the Paris Agreement. 

More than a decade ago, developed countries committed to jointly mobilize $100 billion per year by 2020 in support of climate action in developing countries. But according to UN, the $100 billion target is not being met (the latest available data for 2018 is $79bn), even though climate finance is on an “upward trajectory.” So, there is still a big gap in finance. 

The annual $100bn commitment, “is a floor and not a ceiling” for climate finance, according to the UN. The UN Environment Programme (UNEP) estimates that adaptation costs alone faced by just developing countries will be between $140 billion to $300 billion per year by 2030, and $280 billion to $500 billion annually by 2050.  

This troubling gap should give the international community impetus to consider how to unleash and engage further action both now and over the longer-term across society. In the run-up to the next, UNFCCC COP26 in Glasgow, and over the course of the Paris Agreement five-year review cycle, governments have the unique opportunity to widen the circle of implementation for inclusive ambition, with a particular focus on countries’ Nationally Determined Contributions (NDCs) as a vehicle. 

ICC – representing more than 45 million companies in over 100 countries and in its roles as Permanent Observer to the UN General Assembly and official UNFCCC Focal Point for Business and Industry – believes that UNFCCC and Paris Agreement Parties should revisit the scope and implementation of their climate policy strategies to assess how to enhance involvement of businesses of every sector, size and jurisdiction, in particular in NDC development, implementation and tracking at both national and international levels.

The pandemic and its disruptive impact on societies, economies and businesses have compounded the difficulty of developing and delivering on NDCs, which makes it even more important to design practical and inclusive NDCs. Overcoming these challenges will require mobilization and agreement to commit to redoubled efforts across society and in particular from governments and businesses. 

While the involvement of multinational corporations and major international business groups in international climate action efforts has grown substantially, they are still an incomplete picture of what the broader business community, including MSMEs is capable of contributing at national and global levels. 

MSMEs are the foundation of global economic system– they make up 90 per cent of businesses worldwide, comprise an estimated 80 per cent of employment in many countries, collectively employ two billion people. Yet, they are not a dominant voice and presence in the UNFCCC process. 

It is suggested, governments to encourage MSMEs to take on appropriate climate mitigation and adaptation measures; develop good practices that are flexible to innovation across NDCs, in particular for MSMEs tackling the social and economic impacts of the pandemic and create a dedicated and recognized space inside the UNFCCC for enhanced consultation and dialogue with business and employers, inclusive of MSMEs. 

This private sector platform could also provide for practical and realistic dialogue on converging climate and recovery agendas.