Achieving climate and development goals without the full backing of business and investors is not possible. Fortunately, evidence shows that more and more businesses and investors are taking a lead—and saving costs and making money in the process. At the same time, the emergence of new technologies and the growth of climate policy around the world have created a global market in low-carbon goods and services with a value of around US$5.5 trillion—larger than the global pharmaceutical industry. Thus, although many businesses remain powerful opponents of climate-related policies, it is unsurprising that many others are now leading the charge for climate action.
This paper argues that by collaborating with other private sector partners and with public sector bodies, businesses can significantly increase their impact. By working together to set and achieve commitments, businesses can share best practices, prompt positive competition, and improve their confidence that ambitious targets are credible and achievable. By pooling resources to engage with policymakers, businesses can develop stronger arguments and more efficient engagement strategies. They also make their voice more credible by demonstrating greater backing. Finally, to address systemic challenges such as deforestation, or rapid technology substitution, which requires simultaneous action from multiple fronts, businesses are increasingly realising they need to be part of broad public-private partnerships (PPPs) that can change the terms of a whole market.
This paper reviews different types of business and investor actions on climate, and highlights areas in which international cooperation has the potential to enhance ambition and lead to greater impact and accountability. It is divided into seven sections:
- The role of business in addressing climate change and the types of actions companies are taking.
- The drivers of action, including the benefits that accrue to businesses.
- Sectoral and regional trends.
- The need to increase ambition.
- The potential of international cooperation.
- Conclusions and recommendations.