Climate change is considered as one of the world's most significant development challenges. It is regarded as a systematic issue that serves as a typical example of a “wicked problem’’ with a visible ripple effect. The scientists of the Sixth assessment report by the Intergovernmental Panel on Climate Change (IPCC) voiced that climate change is “unequivocally caused by human activities” and that “human influence has warmed the atmosphere, ocean, and land.” (IPCC, 2021). The anthropogenic causes and effects of climate change are well-defined in most climate studies. This brings forth the issue of responsibility and the actions taken by various stakeholders to act upon the scientific evidence of climate change. The corporate sector is responsible for a significant portion of global emissions.
This makes the climate action measures by the corporates vital to the success of the Paris Climate Agreement and other global goals related to climate change adaptation and mitigation. The message of this article is that a society’s vulnerability to any climate change scenario puts the businesses embedded in that society at risk. Corporations, Governments, and local communities should work in tandem to develop their capability for adapting to climate change events. The local-level social contracts, dialogues, and interventions are potential ways to adapt and mitigate climate change.
Business Action for Climate Change
The Paris Agreement and Sustainable Development Goals both reaffirm that environmental sustainability must be improved and that all stakeholders must address climate change. One of the most significant gains since COP26 in Glasgow last year is that businesses now disclose specific figures on their investments, emissions reductions, and impacts. It will take a holistic approach and, most notably, a difference in how governments and businesses make decisions to move from the current vulnerable state to one more robust to climate change. Various multistakeholder climate action initiatives are going on. Still, there is an argument that, compared to the government and civil society, business is slow to respond to climate change and is frequently blamed for contributing to it. However, recent developments and trends have also pushed climate action higher on the corporate agenda.
Meeting fundamentally ambitious carbon reduction targets locally, nationally, and worldwide will depend on the active participation of businesses and the community. Players of development cooperation work with the business sector to mobilize expertise and knowledge to tackle environmental concerns through discourse, policy discussions, and established partnerships. Using the Swedish Leadership for Sustainable Development network, as an illustration, the Swedish International Development Cooperation Agency manages 20 Swedish or Swedish-based businesses that meet regularly to discuss ways to advance global leadership in addressing sustainability issues.
One social, economic, and environmental issue that has spurred business interest in India in the post-reform era is climate change. Governments and other stakeholders have started to focus more on the potentially severe implications of climate change. The Indian government unveiled a National Action Plan for Climate Change in 2008. (NAPCC).The corporate sector reacted to the NAPCC with tremendous enthusiasm. It played its part in its implementation amidst the criticism from other stakeholders that it did not aid the vulnerable population and the environment. The current situation can be seen as one where the government's intentions for climate change action have the enthusiastic support of the corporate sector.
Possible ways for businesses’ climate change action
The loss and damage from climate change that goes beyond adaptation might cost developing nations a total of US$290–580 billion in 2030 and US$1–1.8 trillion in 2050, depending on the scope of global efforts to reduce and adapt to climate change. Reducing vulnerability by identifying the exposure and drivers of vulnerability is perhaps the first step toward climate change adaptation. Companies can identify and categorize the most vulnerable populations and sectors to climate change and recognize the significant drivers of vulnerability. Consolidated assessments by the companies, including biophysical and socioeconomic vulnerability, can augment the efforts towards identification and understanding “who is vulnerable and why?''. This will help to plan and implement targeted adaptative capacity-building measures. The repercussions of climate change could be severe, and how businesses react today in the potentially vulnerable hotspots will impact their sensitivity and adaptive capacity.
Climate change affects the socio-economic setting of the regions in which companies operate. There is a need to strengthen the climate data collection in those areas as the data for climate change research is inadequate and gathered locally. This can help to fulfil the need for a successful climate adaptation through “location performance vulnerability” based adaptation. The “first climate change conflict,”- the war of Darfur, is known to have resulted from climate change which badly devastated local infrastructure and many enterprises. Business enterprises can be part of the solution to avert future climate change-induced harm and conflict. Business enterprises should respect human rights throughout their operations and prevent and mitigate adverse human rights impacts related to climate change. To do so, States should hear business community members and embrace a blend of laws, regulations, and policies that encourage businesses to prevent adverse human rights impacts from climate change.
(Author works with Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business Hyderabad. Email: email@example.com)