IMD International

Leadership needed at climate talks: society’s hopes shift to the private sector

IMD Professor Reacts: Francisco Szekely on COP21

September 24, 2015

This week, the United Nations climate change conference takes place in Paris, where negotiators from more than 100 countries aim to finalize a new international agreement on the environment. This weekend, before the opening of the climate summit in Pairs, hundreds of thousands of people took to the streets at more than 2,000 events spread across 150 countries to demand that negotiating parties keep fossil fuels in the ground and finance a transition to 100% renewable energy by 2050. The Paris conference, also known as COP 21, comes as a new paradigm is emerging on climate — one in which action is decentralized, driven primarily by national, and even state and provincial governments, rather than by negotiations at the UN. The challenge is deciding how to turn the global economy towards a low-carbon, climate-resilient future.

The Paris negotiations must not fail. If governments fail to agree, the world will be subject to more droughts, increasing hurricanes and storms, and dangerous rising of sea levels which threaten the livelihood of millions of people around the planet.

The science of climate change is now conclusive. Even agnostics on climate issues understand that 2015 has been the hottest year on record, surpassing the records of 2014, 2012 and 2011. These records have increasing economic, environmental and moreover social impacts which translate to environmental degradation, poor economics, and more importantly, human suffering.

Since 1992, the United Nations has been convening meetings to find an agreement to curb greenhouse gas emissions. So far the results have not been tangible.

The prospects for success in Paris diminished significantly this weekend. The French government offered a concession to the US by accepting that a global climate accord will not be called a treaty. This means that the carbon dioxide reduction targets that will be agreed upon in Paris will not be legally binding. The reason is that the US Congress – controlled by the Republicans – have taken the American people hostage – along with the rest of the world. There is no other way to explain why they have firmly expressed that they will not ratify a climate change treaty.

We need to respond to the climate change challenge urgently. We need to move beyond the position of one single country. So, if negotiators fail to agree to serious and legally binding commitments, where should the world look for leadership now? Here is where the leadership of the private sector should come into place.

Leadership focusing on sustainability and that is committed to creating a better world is needed. It is time for private sector leaders to step in and contribute real leadership to fill the vacuum that politicians have left in their wake. The private sector needs to act with a sense of urgency and adopt the concept of the circular economy and a carbon neutral mode of providing products and services. A number of global corporations – such as Unilever, Tata, Grupo Bimbo, and Natura – have already committed themselves to phasing out their reliance on fossil fuels by 2050 and to increasingly incorporate the use of renewable energy. We need to see more of this type of leadership. We cannot wait for government negotiators to agree on binding commitments.

People are taking to the streets in many parts of the world to express both their hopes and frustration about the current lack of leadership. It is time that the private sector takes this challenge seriously and acts now. This is what we call responsible leadership.

Francisco Szekely is Sandoz Professor of Sustainability Leadership at IMD and Director of IMD's Global Center for Sustainability Leadership (CSL).

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