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UN Sustainable Development Goals - Goal 13

15 August 2018


 

In September 2015, the 193 countries of the UN General Assembly adopted the 2030 Development Agenda "Transforming our world: the 2030 Agenda for Sustainable Development". Known as the Sustainable Development Goals (SDGs), the 169 targets which make up the 17 goals provide a framework for countries to guide their path towards a more sustainable future. Ethical Screening is investigating how companies can contribute to The Goals. This blogpost focuses on Goal 13 - Climate Action.

What is Goal 13?

Sustainable Development Goal 13 is dedicated to addressing the challenge of climate change and its impacts. It acknowledges the United Nations Framework Convention on Climate Change as the primary international, intergovernmental forum for negotiating the global response to climate change; the underlying goal targets reflect this by focusing on government action.

From an analysis point of view the goal creates a dilemma - while many companies can rightly claim to be fulfilling the sub-text of the Goal, to "take urgent action to combat climate change and its impacts", the targets are not company focused. These include committing governments to strengthening resilience and adaptive capacity to climate-related hazards and natural disasters (Target 13.1); integrating climate change measures into national policies, strategies and planning (Target 13.2); and improving education, awareness-raising and capacity on climate change mitigation, adaptation, impact reduction and early warning (Target 13.3).

How can companies contribute to Goal 13?

Practical actions that companies can take to combat climate change are commonly found under other goals, for example, renewable energy and energy efficiency (Goal 7), sustainable cities (Goal 11), and retrofitting industries to make them more sustainable (Goal 9). That said, there are actions companies can take that align to the targets of Goal 13 more specifically, focusing on contributions to policy making, supporting agreements and providing finance that supports these initiatives.

Historically, responses to climate change has been framed under three categories: mitigation, adaptation and resilience. It will therefore be useful to frame the analysis in a similar manner.

Mitigation focuses on the direct causes of climate change, such as greenhouse gas emissions, through actions aimed at reducing these sources, or at increasing the capability of carbon sinks. Companies should set ambitious, science-based targets to reduce their GHG emissions, but as we have seen such initiatives are generally covered under other SDG targets. Companies can contribute through the provision of Climate Finance, which can be defined as 'a structured movement of assets from developed economies... to development projects in developing economies... which encourage carbon neutrality, sustainable development, or other practices that will mitigate climate change'. In this area, the participation of finance providers such as HSBC and Deutsche Asset Management, but also companies involved in other sectors such as Ricardo Energy & Environment and PWC, to projects such as the Climate Finance Accelerator.

Other relevant initiatives such as the Paris Pledge for Action, by which businesses, cities, civil society groups, investors, regions, trade unions and other signatories promised to ensure that the ambition set out by the Paris Agreement is met or exceeded, to limit global temperature rise to less than 2 degrees Celsius. While the pledge is now closed to signatories, this does not mean that companies don't have opportunities to make their voice (and their support) heard. Other initiatives open to the private sector include UNEP's Principles for Sustainable Insurance.

Adaptation, whose goal is to adjust to actual or expected climate and its effects, with the goal of moderating or avoiding harm or exploiting beneficial opportunities, can be achieved through construction works that limit the effects of (ever less) extraordinary climate events such as floods or hurricanes. For example, in 2016 Balfour Beatty released a paper titled Infrastructure 2050: Future Infrastructure Need in which the company suggests increased public spending in infrastructure designed to withstand the effects of climate change. Over its 20 years of activity in the flood and coastal sector, Balfour Beatty has realised more than 70 schemes across the UK, amounting to more than GBP 600 million, in collaboration with customers such as the Environment Agency and local councils. In a different sector, Beazley's reinsurance segment specialises in underwriting property catastrophe risks. The company has been active in dealing with claims in response to major natural disasters, including Hurricane Irma and the California Wildfires. At the end of 2017, the company had distributed $41.2m to help clients begin repairs.

Lastly, resilience is the capacity of social, economic, and environmental systems to cope with a hazardous event or trend or disturbance, responding or reorganizing in ways that maintain their essential function, identity, and structure, while also maintaining the capacity for adaptation, learning, and transformation.. Examples of company's activities in this area are Swiss Re's Horn of Africa Risk Transfer for Adaptation and R4 Rural Resilience Initiative, that allow cash-poor farmers to work for their insurance premiums by engaging in community-identified projects to build climate resilience. The partnership between Safaricom and GE to support the expansion of solar powered mobile station base units in Kenya, that allow rural communities in the north of the country in the case of power cuts is another example.

While every sector will be hit by the effects of climate change, some are more exposed than others. Insurance providers, for example. While a number of insurance companies have started including references to climate change in the Risks section of their Annual Report, some of their competitors are still failing to take this into account. In addition to a lack of preparation to a phenomenon that, in 2017 alone, caused more than $140 billion in losses, these companies are now facing public criticism and, potentially, economically damaging lawsuits.

Why is Goal 13 Important?

The consensus that action is needed to combat climate change needs no further debate here, and it is clear that all actors need to play their part. Although Goal 13 does not specifically address companies their role and contribution is still a vital component.

While mitigation will contribute to measures to avoid the direct negative effects of the changing climate, adapting their business models can help companies acquire new business and reap the new opportunities that might present themselves.

In addition, action on climate change will reinforce, and be reinforced by, actions on other Goals. As noted above, a clear example of this is the connection between Goals 13 and 7 (Affordable and Clean Energy). Limiting the effects of climate change, however, will also help prevent more people falling into poverty (Goal 1); suffering from hunger (Goal 2) and diseases (Goal 3), and many more.

Conclusion

Countless studies have given conclusive proof that the average rise in temperature is already causing shifts in our climate, and that humans must act if they do not want to see the most destructive effects of this phenomenon. Unfortunately, some of these effects are already taking place, as shown by the rise in frequency and power of tropical storms, increasing droughts and floods that have been affecting both the rich and the poor parts of the world, or the wildfires that recently hit Greece, the UK and California.

While Goal 13 can be considered mostly "state-centred" (much more so than other Goals), companies still have a role to play in the fight against climate change. This can be done both through contributing to other Goals, and through helping develop and implement the policies elaborated at State level.

Davide Cerrato - ESG Research Co-ordinator

15/08/2018


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