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The ‘Surround Sound Effect’: How Businesses Are Again Pulling Governments Forward On Climate Change

November 19, 2019, 12:03 PM UTC

It might have taken a while, but business is getting the message that the environment matters, says Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change and founding partner at environmental advocacy group Global Optimism. Now it’s time for governments to do more.

“We’re beginning to see that governments, which have been rather sluggish in the past two years are beginning to look [at business] and think ‘Wow, I need to catch up,’” says Figueres, speaking at the Fortune Global Forum in Paris today.

According to Figueres, who has been in environmental advocacy for about thirty years, there are often “mutually reinforcing cycles” where “incredible corporate leadership” as well as financial pressure spur governments into action.

The last cycle, Figueres says, kicked in about six years years ago, shortly before governments came together to set goals that were very much in line with scientific guideline and signed the Paris Agreement.

“The governments, when they finally came to Paris, had a look around and perceived a surround-sound effect,” Figueres says, describing the impact of the leadership from enterprises, insurance companies and financial institutions on government leaders.

“That allowed them to actually take not just the necessary decisions they had to take but to actually be much more ambitious than the corporates and the investors thought they were going to be,” Figueres says. Since then, however, some business leaders feel that governments are too slow in implementing environmental standards for industries to follow.

“I technically know how to [be carbon neutral] but I will not be able to do that if there is not a government framework. The most important thing for us is a price signal, and that is going to take time. If there is not a price signal, we cannot [be carbon neutral],” says Pierre-André de Chalendar, CEO of materials manufacturer Saint-Gobain.

That said, greater government leadership might be coming soon. Figueres maintains that the “mutually reinforcing cycle” is in an upswing again and that by next year governments might not only catch up with business leadership but also surpass it.

But despite allowing for an extra year until that happens, Figueres isn’t patient. The deadline for signatories of the Paris Agreement to deliver detailed plans on how to achieve the objectives set out in the accord is next year. Given that the Trump administration is pulling the U.S. out of the agreement, the challenge of meeting the plan’s targets will be even tougher for the remaining signatories.

“We have to put this process on steroids, because it’s been moving at the pace that policy can move,” which is glacial, Figueres says. But time is running out.

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