Climate and Energy
British Embassy Tokyo Seminar
Aligning business to a low‐carbon world: Leadership, strategy and change
The British Embassy in Tokyo and the Institute for Global Environmental Strategies (IGES) jointly organised a “Seminar on Aligning business to a low‐carbon world: Leadership, strategy and change”, on 30 June 2016. In this interactive seminar, Carbon Trust and IGES shared their experience and examined why companies need to take action, what corporate leadership on the carbon agenda looks like, and what is required to succeed in a low‐carbon world. Areas covered included: corporate carbon target‐setting and strategies; business model innovation; and supply chain decarbonisation.
|Date||30 June 2016, 10:30-13:30|
|Venue||British Embassy Tokyo, New Hall|
|Organiser||British Embassy Tokyo|
|Collaborators||The Carbon Trust
Institute for Global Environmental Strategies (IGES)
|Paris Agreement: From Low Carbon to Decarbonization
Kentaro Tamura,Area Leader/Principal Policy Researcher, Climate and Energy Area, IGES
|Aligning business to a low carbon world
Aleyn Smith-Gillespie, Associate Director, Carbon Trust
Kentaro Tamura (Deputy Director of the Kansai Research Centre; Principal Policy Researcher, IGES), made a presentation on the long-term transition from low-carbon to decarbonisation of the economy. He highlighted the fact that the achieving the goal of the Paris Agreement means that a complete decarbonisation of society is necessary, and that to do so, we have a limited carbon budget that can only be used by the current generation. Hence, most fossil fuels need to remain underground. To facilitate the transition, the ratchet-up mechanism of the Paris Agreement contains three main components: the 5-year cycle of Nationally Determined Contribution (NDC) review, the global stocktake, and the transparency framework, which can create peer pressure among Parties. Linking short-term NDCs and long-term strategies is thus of critical importance. In Japan, the government plans to build thermal power plants (gas and coal) are making it impossible to reach the decarbonisation target, unless the plants operate only at around half capacity. Regarding future implementation of NDCs, most investments will go to the energy sector in the mid-term, and to the transport sector in the long-term.
Aleyn Smith-Gillespie (Associate Director, Carbon Trust) presented the Carbon Trust and how it helps the business sector in taking ambitious actions towards decarbonisation. The key period for transition will be between 2020 and 2030, and while governments will take the lead, businesses have a huge role to play. Policies will incentivise renewables and energy efficiency, and we will witness the spread of carbon pricing. For businesses, supply chains are a risk multiplier, and customers are now demanding carbon transparency from companies’ products and supply chains. The Carbon Trust was the first organisation to create a label to help companies tracking their carbon footprint, and we now see widespread movements of labelling around the world. Companies hence need to be prepared to disclose more about their footprint. Moreover, investors and asset managers are also increasingly looking at companies’ footprints and selecting companies that are carbon efficient. He also presented some initiatives supported by the Carbon Trust, such as the Science Based Target Initiative, which gathers 160 companies having adopted such targets, and the Net Positive Initiative, evaluating the balance between carbon footprint and the induced emission reductions from a given sector. In the future, it will become important to promote supply chain collaboration, which implies that evaluation must first be carried out to see where the carbon is, before taking actions to help the supply chain actors to reduce their footprint. Finally, embedding carbon within business strategy is going to be of paramount importance to take business action to the next level. It will require understanding where the risks and opportunities for each company are, before promoting the “value at stake” of the carbon agenda.
The panel discussion was moderated by Kazuhisa Koakutsu, Area Leader and Principal Policy Researcher at IGES.
Aleyn Smith-Gillespie answered some questions regarding the role of businesses in climate action, the driver of business action and the impacts of the exit of the United Kingdom (UK) from the European Union (EU). He stated notably that, regarding the impact of the current political situation in the UK, it is way too early to know exactly what will happen, but that it should not impact the UK’s carbon agenda as it is enshrined in national laws. Regarding the drivers of climate action for business, he answered that it is clearly the perspective of costs (from carbon policies) and benefits (from low-carbon investments). Regulatory costs and reputational benefits from brand-embedded sustainability definitively constitute strong divers for companies. He added that businesses can provide confidence in the NDC decarbonisation pathway. On a question regarding the EU Emission Trading Scheme (ETS), he answered that from a business perspective, a high price of allowances is necessary, and that the current low price fails to influence decision making. Kentaro Tamura made concluding remarks by highlighting the fact that climate action will lead to profound changes in society and create winners and losers. Hence, businesses that take early action to decarbonise their activities will position themselves as winners in the market.