A global climate deal is crucial to firms looking to go greener

Businesses need a binding global climate deal if they are to develop innovative products and services for a greener future.

Catherine May: group corporate affairs director at SABMiller
Catherine May: group corporate affairs director at SABMiller

Global climate negotiations are back on the agenda, and this time there is a real chance that a binding climate deal can be reached in 2015. But before a deal can be done we will need to see tangible progress at the UN Climate Summit in New York later this month and the multilateral (COP 20) negotiations in Peru this December, meetings that are crucial steps on the path to a transformational commitment on climate change.

From a business perspective, it is important to emphasise two points for the negotiators at these climate talks to consider while dealing with the wide range of technical, political and economic challenges. The first is the need for a clear and predictable global approach to mitigating climate change. The second is that it is equally important to deal with adapting to the current and future climatic impacts on countries, companies and ordinary people.

Long-term plans and investments require predictability in the policy regime and the price of carbon. This predictability enables companies to make investments on reducing emissions in the most economically rational manner. For example, SABMiller has committed to reduce carbon emissions by 25 per cent per hectolitre of beer across its value chain by 2020.

This is akin to the target of The Coca-Cola Company to reduce the emissions of the drink in your hand by 25 per cent over the same period. Similar commitments can be seen in Unilever’s Sustainable Living Plan and Nestlé’s Shared Value drive.

A global climate deal will help companies plan for reductions into the future, with certainty about the cost of carbon and energy in different markets. For smaller companies, this could create opportunities for reducing costs and developing innovative products and services for a better future.

While adapting to climate change requires a multidimensional response, at SABMiller we are particularly concerned about one aspect that has more impact than any other: water scarcity. It is important to consider the potential impact of water shortages on our facilities and to the societies of which we are a part. What could be the impact of drought or floods on the key crops we use to brew our beers?

The company has set a target to improve water efficiency within its breweries by 25 per cent by 2015, compared with 2008, and is proud to have achieved this more than a year early. SABMiller was also one of the first companies to partner with the World Wide Fund for Nature to carry out a water footprint study. A major insight was that more than 90 per cent of the water required for brewing is used in growing ingredients such as barley and hops, identifying the huge upstream challenge for us in the agricultural supply chain. Many small-scale farmers are even more vulnerable to the impact of climate change on their livelihoods.

Given this reality, companies such as SABMiller need a transparent and predictable global climate deal to guide our efforts to mitigate and adapt to climate change.

Catherine May is group corporate affairs director at SABMiller

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