How can businesses best fight climate change?

At the start of 2014, it is clear that the next two years will be crucial in the battle to slow down the pace of climate change. Much of what the year ahead will bring is in fact part of a two-year story leading to the hoped-for agreement on climate at COP 21 in Paris, as well as the development of a set of Sustainable Development Goals to replace the Millennium Goals, also to be agreed in 2015.

Progress depends in no small part on how fully engaged, ambitious and innovative the private sector will be. It is clear that, even several years after the financial crisis, ongoing economic sluggishness has eroded the ambition of governments. They remain focused on what they perceive to be the more immediate concerns of their constituents. As such, when it comes to decisive action on climate change, business cannot do it all, but without business, it will not be done.

As we look ahead to 2015, the climate strategy for business should have multiple dimensions.  Climate action 2.0 has to go beyond the simple focus on resource efficiency. Businesses will succeed best by thinking about how systemic change can be achieved, and what their role is in making that happen.

The blueprint for business action has three key dimensions: 1. business innovation; 2. consumer engagement; 3. policy influence. Taken together, these three elements hold great potential for unlocking new business opportunities, market creation for low-carbon products and policy frameworks that align incentives with the urgent need for progress.

Innovation: The starting point for business is innovation. New technologies, consumer opportunities and business models are what business does best. Applied to the challenge of the low-carbon economy, innovation must be part of the solution. Indeed, there are massive opportunities for businesses that define what it means to operate in a climate-constrained world, just as the rise of the connected economy and the globalized economy have unleashed waves of transformative innovation. Companies that embrace the challenge will be the winners; those that don’t will be left behind.

Consumer engagement: It is increasingly clear that business has an essential role to play in energizing people to integrate sustainability into their daily lives. Businesses have not yet unleashed their marketing prowess to communicate the urgency of climate action. In the past, the private sector has played a crucial role in reducing litter and in changing mindsets about body image, for example with Dove’s campaign for real beauty. There is no reason why business cannot use its voice to help consumers embrace climate-smart actions. Indeed, this is linked to the innovation agenda, where business can help to reframe the climate challenge as a new and exciting way to build the 21st century economy.

Policy influence: Finally, business also has a crucial role to play in encouraging governments to act more decisively on climate. In my experience, many chief executives are keenly aware of the need for strong policy frameworks that reward climate-friendly companies. However, too often they are either silent or working through trade associations that block wise policy on energy and climate. The time has come to build new coalitions that result in decisive climate action. Without that, success in 2015 is highly unlikely.

There has been clear progress on many fronts over the last few years. But it has been too incremental to deliver the action that is needed. The stakes for business are very high: the economic progress that for the past 30 years has expanded human wellbeing and business opportunity hangs in the balance.

Climate is a novel challenge, but the business solutions draw on the private sector’s traditional strengths. Companies that apply their prowess by innovating, communicating and influencing will lead the way – and create the conditions necessary for their ongoing success by securing and widening the circle of prosperity for all.

Author: Aron Cramer is President and Chief Executive Officer at Business for Social Responsibility and is participating at the World Economic Forum’s Annual Meeting in Davos 2014.