LONDON — Noting that the current collective response to climate change is inadequate, Unilever chief executive officer Paul Polman called for decisive action to tackle the issue.
“Climate change is putting in jeopardy everything we have achieved since the 1960s in respect of poverty, food security, and social stability,” he said April 8 as the keynote speaker at the London Imperial College Graham Institute for Climate Change annual lecture. “The cost of inaction is now greater than the cost of action: In the last decade, the world spent $2.7 trillion more on natural disasters than usual; the same disasters are costing Unilever around €300 million ($414 million) a year.
“Left unchecked, climate change has the potential to become a significant barrier to our growth strategy, and that of just about every other company. As scarcity and volatility continue to increase prices of raw materials, businesses will see increased pressure on profit margins, reducing growth and the ability to invest. Climate change risks not only tipping the poorest into deeper poverty, but pulling the emerging middle classes back into poverty as well. Not only is tackling climate change compatible with economic growth, it is only by tackling climate change in a systemic way that we can deliver growth for the global economy in the 21st century.”
Mr. Polman said many businesses around the world have reached this same conclusion, with 75% of the world’s largest companies now having multiple environmental and social goals in place. He added that many have integrated an “internal” carbon price into their business strategies, in the expectation of an “external” carbon price in the near future.
“A particular priority for us all is ending deforestation, up to 15% of global emissions, according to the I.P.C.C.’s (Intergovernmental Panel on Climate Change’s) latest research,” he said. “It’s a complex area but also an urgent one: To date, about 30% of global forest cover has been cleared by humans, and a further 20% degraded. Rising global demand for key commodities such as palm oil, soy, paper and beef make tackling this a priority.”
Mr. Polman said solutions may be found in policy and investment.
“Policy certainty creates confidence, drives investment, creates jobs, de-risks R.&D., supports new supply chains and lowers costs,” he said. “It delivers savings that can be ploughed back into the de-carbonization agenda, creating a virtuous circle of growth.
“If this is the future we want, then investors have to believe that the shift to a low-carbon economy is not just possible, but inevitable. They have to believe that governments will realize the significant economic benefits from this shift, and that those who pioneer it will reap the biggest rewards. They have to believe that if they continue to invest in high carbon, their investments will not be fully protected when assets are stranded by policy and regulatory change.”Calling for governments to “come off the sidelines,” Mr. Polman concluded by noting, “We must recognize the beginning of the end of the high carbon era and the birth of a new kind of economy; an economy in which the new businesses of the future, and the forward-thinking ones from the past, will come together to create a new industrial landscape, a new prosperity, and a better future for us all.”