This blog post originally appeared on WRI.org.
Anand Mahindra, chairman of the India-based $19 billion Mahindra Rise conglomerate, told a World Economic Forum crowd that climate action is “the next century’s biggest business and financial opportunity.”
“Everything that our group of companies has done to try to improve energy to reduce greenhouse gas emissions has given us a return,” Mahindra Rise chairman said at an event on “Stepping Up Climate Action.” “In the last five years, we’ve saved 58 million kilowatt-hours of energy, which could fire up 15,000 homes in India. That saved us money.”
To that end, Mahindra committed all of Mahindra Rise’s companies to setting science-based emissions-reduction targets, which aim to limit global temperature rise to 1.5-2 degrees C (2.7-3.6 degrees F), the level scientists say is necessary for preventing the most disastrous of climate impacts.
“It’s the one way in which every company in the world can find a quantitative roadmap in how they’re going to contribute to meeting the Paris Agreement goals,” Mahindra said.
So far, more than 330 companies have committed to science-based emissions-reduction targets as part of the Science Based Targets initiative.
Climate Action Is Good for Business
Other panelists shared Mahindra’s belief that what’s good for the climate is good for business.
Insurance company AXA has already divested from coal and oil sands due to climate change’s threats, including increasingly frequent and severe extreme weather. “It’s already a reality and it makes our pricing more difficult, but today, it’s still insurable,” AXA CEO Thomas Buberl said. “But we can say that under a scenario of 3 or 4 degrees C [of temperature rise], you’re not insurable anymore. Your basement shop in New York, your basement shop in Mumbai will not be insurable anymore.”
The company is now increasingly prioritizing green investments. “When we put up the first chunk of green investments—$3 billion—we calculated it over six years because we thought nobody would take it,” Buberl said. “It was gone in two years, so the demand is there.”
“This is the greatest business opportunity in history,” said former U.S. Vice President Al Gore. “We’re at the early stages of a global sustainable revolution that is based on hyper-efficiency. It has the magnitude of the Industrial Revolution, but the speed of the Digital Revolution.”
A Need for Greater Political Will
Still, business leaders agreed that what’s really needed to shift the world firmly toward a low-carbon economy is government action. Policy can push investment into greener infrastructure, the same way policies of the past, such as fossil fuel subsidies, helped create the high-carbon economy of the present.
We’re already seeing what this looks like at the local level. Washington state Governor Jay Inslee recently proposed what could become the first U.S. state carbon tax. “It would create an investment pool to help [clean tech] businesses develop,” he said. “That’s a common-sense measure and a moral responsibility.”
This year is also a prime one to watch for policy action at the national level. As part of the Paris Agreement on climate change, every country in the world committed to review and ratchet up their national climate policies every five years, beginning in 2020. Gore said that at the UN climate summit in Poland this December, world leaders should commit to strengthen their national climate targets.
“2018 is the beginning of this cycle,” Gore said. “We need to convince every country in the world to renew and increase their commitments … and convince them to save humanity’s future. We can do it because the will to change is a renewable resource itself.”