3 ways to ensure voluntary business initiatives support climate action

Voluntary business initiatives that tackle climate change cannot bring about urgently needed systemic change fast enough unless they are supported by policymakers and consumers. But it would be wrong to discount them as mere greenwashing exercises or distractions.

First, these initiatives create awareness and shape public opinion and thereby prepare the ground for policy changes. Second, every well-intended and executed initiative counts and every single ton of reduced carbon emissions and every preserved watershed or acre of forest makes a difference, even if the overall outlook continues to deteriorate. Third, green investments and transformations take time to become the new normal. Every investment and firm level commitment counts as they help to build momentum towards a better outlook for the future.

There are reasons to rethink the role of business initiatives and to explore how they can become more effective. Against the background of ongoing political and economic changes, and based on my experience of two decades building global business networks in support of public goods, the following considerations could be relevant:

Incremental improvements matter but time is running out. Large-scale changes require policy measures such as effective carbon pricing. The case for voluntary business initiatives to align with policy measures is becoming even more important as hundreds of businesses have made net-zero pledges. Clearly, without major policy changes to reward carbon reductions, the great majority of these businesses would go bankrupt.

Amazingly, only a few of these businesses made their pledges in the context of such essential co-dependents. Have they built a trap for themselves? Was the intent behind these pledges not serious? Or was it simply fear of missing out that made them join net-zero pledges? Whatever the reason, businesses will benefit from leveraging good intentions with policymaking. Moreover, an increased focus on policymaking would force those businesses who have only joined the ride for improved public opinion to rethink their tactics.

Innovation and technological change doesn’t slow down in times of uncertainty and disruption. On the contrary, crises situations lower the barriers for change. The big transformation towards low-carbon markets is at its core a question of technology shifts. The intersection of technology and environment is already attracting much attention across many sectors and industries.

Major technology shifts in the energy and transport sector are well on their way and at last finance – enabled by technology platforms such as the Arabesque ESG Book – is starting to use valuations that support future-fit business models. It is now key for voluntary business initiatives to focus even more on technology, the most fundamental of the forces that shape human progress.

Today, the lessons of history seem to be forgotten and power rivalry, economic nationalism and protectionism are on the rise. State propaganda and the projection of external enemy images are feeding narratives that could become self-fulfilling prophecies. Sadly, those who control power – often just for the sake of power itself – seem to not realize that humanity has a new enemy: climate change, which does not respect national boundaries or spheres of influence.

At some point in the future, nature will force their hands. But in the meantime, the new role of voluntary business initiatives is to help to prepare the ground for policymakers and societies to take more decisive actions on the climate front. With the help of global organizations such as the World Economic Forum and the UN Global Compact who are well positioned to act as enablers, voluntary business initiatives connect people from different cultures and regions and political divides and help to counter the dark forces of power and thereby contribute to safeguard peace, the most important of all public goods.