The FINANCIAL — Along with business leaders of 140 global companies Allianz on December 8 published a communiqué to world leaders setting out what they believe should be the key elements of an international deal on climate change.
The initiative represents an impressive coming together of the international business community and includes some of the biggest companies and brands from around the world, including Australia, China, Europe, Japan, the Middle East, South America, the United States and Canada. The Poznan Communiqué was developed by The Prince of Wales's Corporate Leaders Group on Climate Change1 (which is managed by The University of Cambridge Programme for Industry) and its launch coincides with the start of the second week of the UN climate negotiations currently taking place in Poznań, Poland2.
The Communiqué says that "climate change poses global social, environmental and economic risks and demands a transformational change in how we manage our global economy" and that "we must deliver deep and rapid cuts in greenhouse gas emissions". It also states that "any credible comprehensive agreement must include mechanisms to reduce tropical deforestation" as the continuing destruction of these ecosystems accounts for up to a fifth of annual greenhouse gas emissions.
"It's time to act"
Joachim Faber, CEO of Allianz Global Investors and Member of the Board of Management, Allianz SE said: "It's time to act. We support the United Nations to establish a framework for global emissions reduction, that will also help to generate more investments in low-carbon technologies. In the meantime let's ensure some quicker wins – stop tropical deforestation and save energy with measures, every company and everyone of us as a citizen and customer can start with today."
In a reference to the economic downturn, the 140 companies comment that "decisive action will stimulate global economic activity" and that delaying action will increase the costs of stabilizing the climate.
It presents a strong business case for action by stating that a "sufficiently ambitious, international, comprehensive and legally binding United Nations agreement" will "provide business with the certainty and frameworks it needs to scale up global investment in low-carbon technologies".
The business leaders argue that the overall targets for emission reduction must be guided by science and note that even an immediate peaking in global emissions would require a subsequent reduction of 50-85 percent by 2050, according to the Intergovernmental Panel on Climate Change (IPCC).
Revision of the Kyoto Protocol
The Poznań Communiqué offers some thoughts on the "deal" that needs to be reached between the developed countries and developing countries – the debate that lies at the heart of the international negotiations. It suggests that developed countries need to take on "immediate and deep economy-wide emission reduction commitments" while rapidly emerging economies should be looking to adopt commitments by 2020.
The companies also propose a number of mechanisms such as a series of national or regional cap and trade systems linked together, non-price interventions (such as regulations and performance standards), a mechanism to reduce deforestation, and a strategy and additional funding on adaptation to assist the poorest countries which are particularly vulnerable to the effects of climate change.
Crucially, they suggest that the mechanism used in the Kyoto Protocol to fund emission reduction projects in developing countries (known as the 'Clean Development Mechanism') should be revised to enable a much greater transfer of funds and technology from developed to developing countries, and to support climate mitigation strategies at the regional or national level.
An coming together of the international business community
US based companies in support of the Communiqué include Ebay, HP, Johnson and Johnson, Kodak, News Corporation, Nike, Sun Microsystems and Yahoo! The document has also been signed by CalSTRS (the largest US teachers' retirement fund) and the Brazilian based bank Tribanco.
European based companies include Allianz, BT, BP, Deutsche Telekom, Ferrovial, Holcim, Lloyds of London, Philips, Royal Bank of Scotland Group, Reckitt Benckiser, Rolls-Royce, Shell, Swiss Re, Tesco, Unilever, and Virgin.
Australian based companies include Insurance Australia Group, Linfox, National Australia Bank, Westpac.
Significantly, the communiqué has also been signed by a number of Chinese companies including Ryle Technology, Shanghai Electric, and Suntech, and also Cathay Pacific Airways and Swire Pacific based in Hong Kong. The Japanese company Ricoh has also endorsed the document, as has the Saudi based Rezayat Group.
Representatives of The Prince of Wales's Corporate Leaders Group on Climate Change will be present at The United Nations Climate Change Conference in Poznań, Poland this week and copies of The Poznań Communiqué will be delivered to each of the 192 countries at the meeting.