On Our Radar: Energy at a Crossroads

17 Feb 2014Rida Bilgrami

Flickr image by NAMU-Cube

Between traditional news channels, blogs, and social media, it can be hard to keep up with what’s making waves in the field of sustainable development. In this roundup we aim to cut through the noise with a handful of highlights that have caught our eye.

In his 2014 State of the Union address Barack Obama underscored the urgent action required on climate change but made no mention of controversial and divisive energy policy matters such as approving the TransCanada’s Keystone XL pipeline. Environmental groups and energy experts question how long it is possible to sustain an ‘all of the above’ energy strategy, which backs investment in clean energy alternatives on one hand but also promotes rampant drilling and mining of fossil fuels on the other.

The Obama administration is not the only one finding itself at this energy crossroads. The uncomfortable transition from fossil fuels to renewables is playing out in a tug of war between the high-carbon lobby and more progressive companies placing their bets on the transition to a low-carbon economy.

The latest announcement by the EU that it’s reducing its GHG emissions by 40%, (with 1990 as the baseline) and will be producing 27% of its energy from renewable sources by 2030 demonstrates this growing divide within the business world. Leading companies, including Unilever, BT and Kingfisher, have welcomed the proposed target and expressed that is the minimum level of ambition required to deal with climate change. Philips was more vocal in its dissatisfaction expressing disappointment that the European Commission had not included a clear energy efficiency policy framework in its new 2030 package. Some environmental NGOs believe the split in the business world on energy policy is one of the reasons that the targets are not as ambitious or as comprehensive as expected.

Whilst on the surface the divide in the business world between pro- and anti-carbon policy may be clear, many companies have yet to get internal alignment on what side of the climate fence they sit. As the Union of Concerned Scientists (UCS) observed in a 2012 report, a number of companies made statements in support of climate policy in some public venues while continuing to spread misinformation or obstructing science-based policy elsewhere.

UCS recently released a report examining company responses to the Carbon Disclosure Project questionnaire and found that less than half of the companies disclosed their membership in organisations opposed to climate policy. It is therefore timely that the UNGC, UNEP in partnership with WWF and CDP and others, have developed The Guide for Responsible Corporate Engagement in Climate Policy, which launched in Fall 2013, to provide companies with practical guidance on how to consistently manage and be transparent on their direct and indirect influences on climate policy. The guide also shows companies how they can understand and manage risks and most importantly, profit from actively pushing for a transition to a low carbon economy.

IKEA CSO Steve Howard urged his peers to engage more effectively with policymakers and warned his peers of the consequences if they don’t: “You can either be at the table or be part of the menu.” He believes it is time for companies to be much clearer about which side of the climate debate they are on.

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