Historic Climate Summit Opens New Chapter in Global Efforts to Tackle Climate Change

New York, 23 September – New commitments, new ideas, and new financing for significant actions to address the challenge of climate change dominated the announcements made by more than 100 Heads of State and Government and leaders from the private sector and civil society at the Climate Summit hosted Tuesday by United Nations Secretary-General Ban Ki-moon.

World leaders reaffirmed the need to take urgent action to limit global temperature rise to less than two degrees Celsius. Acknowledging that the world was not on a pathway to reach that goal, they also committed to significantly ramp up climate action. Many speakers made it clear that taking action to reduce emissions could be achieved without damaging prospects for economic development and efforts to fight poverty.

Closing the Summit, the Secretary-General said, “I asked for bold announcements from Governments, business, finance and civil society in five key areas. The Summit delivered.”

“This Summit was not about talk. History is made by action. And now we have seen that the world is ready to act.”

At the Summit, heads of government, business and civil society announced actions in areas that would have the greatest impact on reducing emissions, including climate finance, energy, transport, industry, agriculture, cities, forests, and building resilience.

Government leaders also committed to reach an ambitious and universal climate agreement in Paris in 2015 and pledged to work under the UN Framework Convention on Climate Change to reach it.

And many countries announced climate goals, targets and initiatives, including announcements of contributions to the Green Climate Fund by both developing and developed nations.

Several European countries announced that they would pursue the target of 40 per cent greenhouse gas reductions over 1990 levels. The United States announced an initiative to bolster resilience efforts and China announced that will reduce carbon intensity, increase the share of non-fossil fuels and raise the forest stock, and see its total total carbon dioxide emissions peak as early as possible. India announced it will double its wind and solar power production by 2020.

Developing countries stressed their own efforts to address climate change. Many emphasized initiatives to protect and expand their forests. Georgia said it was working to become carbon neutral by 2050; Costa Rica said it would use 100 per cent clean energy by 2016; and Chile said it was aiming to green 45 per cent of its energy by 2025.

Many countries stressed efforts to build carbon-trading mechanisms and the need to put a price on carbon emissions.

More than 70 countries and 1,000 companies endorsed the development of  mechanisms that would reflect the true costs of emissions and other forms of pollution.

More than 30 companies endorsed the Caring for Climate Business Leadership Criteria on Carbon Pricing, which include setting an internal carbon price high enough to affect investment decisions to drive down greenhouse gas emissions.

Some of the most ambitious goals were announced by coalitions of governments businesses and civil society. Financial institutions, commercial and national banks, insurance companies and pension funds vowed to mobilize more than $200 billion in finance for climate action by the end of 2015 through a host of new initiatives, such as those aimed at issuing green bonds and shifting assets to clean-energy portfolios.

In an acknowledgment of the special needs of people on the frontlines of climate change, Summit participants placed a heavy emphasis on adaptation and resilience initiatives. These included an announcement from the insurance industry, representing $30 trillion in assets and investments, committed to creating a Climate Risk Investment Framework for industry-wide adoption by the end of next year.

“Looking forward, we must maintain the spirit of compromise and commitment that characterized our discourse,” Mr. Ban concluded.

“We must fulfill and expand on all the pledges and initiatives brought forward today. As we walk together on the road to Paris in December 2015, let us look back on today as the day we decided – as a human family – to put our house in order to make it liveable for future generations.”

The announcements and commitments made at the Climate Summit can be found atwww.un.org/climatechange/summit and on Twitter from @climate2014live #climate2014.

25 September 2014

Sumitomo to Probe $1.8 Billion in Shale And Coal Losses

Sumitomo Corp. (8053) will set up a special investigation into how it lost almost $1.8 billion in Texas shale oil and Australian coal mining.

The probe comes after the company, Japan’s fourth-biggest trading house, cut its annual profit forecast by 96 percent after writing down the value of the two investments. Most of the losses were incurred at the shale oil project it shares with Devon Energy Corp. (DVN) of the U.S.

“I didn’t expect the loss could reach this level at all,” said Jiro Iokibe, a senior analyst at Daiwa Securities in Tokyo, adding that the next threat for shareholders is a possible cut to the company’s dividend.

The Tokyo-based company will form an internal committee to investigate the causes of the impairments at its natural resources operations, Chief Financial Officer Hiroyuki Inohara told reporters in Tokyotoday. The company also scuppered plans to raise the ratio of resources assets in its investments.

Net income is forecast to total 10 billion yen ($91 million) in the year ending March 31, down sharply from the company’s May forecast of 250 billion yen, Sumitomo said in a statement. The bulk of the change comes from a 170 billion yen write down on the value of the shale oil development in the Permian Basin in Texas and a 30 billion yen write down of coal assets in Australia.

Copper Losses

Royal Dutch Shell Plc booked a $2.1 billion charge in August last year, mostly related to liquid shale exploration in the U.S.

Sumitomo’s most high-profile failure came in 1996, when chief copper trader Yasuo Hamanaka lost about $2.6 billion in illicit trades of the metal in one of the biggest commodities trading scandals in history.

Japan’s Rating & Investment Information Inc. lowered Sumitomo’s credit rating outlook to negative from stable after today’s write downs.

“We don’t know if these impairment losses are all,” Daiwa Securities’ Iokibe said. “It’s unclear whether their net profit for this fiscal year can stay at 10 billion yen.”

Sumitomo’s Chief Executive Officer Kuniharu Nakamura told reporters in Tokyo that “unless we see a sharp drop in resources prices, there is no possibility of additional write downs.”

Sumitomo’s board plans to sell the northern part of the oil project it shares with Devon Energy, saying it’s “difficult to extract the oil and gas efficiently.” The company will also write down the value of an iron ore project in Brazil and its tire business in the U.S.

Devon Purchase

The company in August 2012 announced plans to invest about $2 billion in Texas’ shale oilfields via the purchase of a stake in the assets from operator Devon Energy. Sumitomo agreed to pay Oklahoma City-based Devon $340 million cash for 30 percent of the project located in the Permian Basin, the biggest oil resource in North America.

The company plans to stop production at its Isaac Plains coal mine in Australia with Vale SA (VALE5)after an industry downturn, it said in a separate statement today. The companies plan to cease operations at the venture in Queensland state’s Bowen Basin by the end of January, according to the statement.

Slowing demand from China and oversupply pushed the price of steelmaking coal to a six-year low in April, forcing some producers to close or idle mines. BHP Billiton Ltd.’s coal venture with Japan’s Mitsubishi Corp. in Australia will cut about 700 jobs to reduce costs, it said last week.

Sumitomo’s stock ended trading in Tokyo marginally higher at 1,377 yen, before it announced the write downs.

To contact the reporters on this story: Ichiro Suzuki in Tokyo at isuzuki@bloomberg.net; James Paton in Sydney at jpaton4@bloomberg.net

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Will Kennedy

CEOs: the challenge of creating a lasting legacy of sustainability

With the average tenure of a FTSE-100 company CEO at just five years, many business leaders struggle to leave a long-term legacy of sustainability
  • man on mountainIt can be a lonely place at the top, with CEOs under greater public scrutiny than at any other time in history.
What will I be remembered for? With political conference season in full swing, this is no doubt one of the big questions keeping party leaders across the political spectrum up at night. Each of the conferences has seen leaders set out their vision for the future and try to win the hearts and minds of the voting public by articulating the immediate change and lasting legacy they could bring to society if voted into government.
It struck me that the challenge facing party leaders is not dissimilar to those facing business leaders every day. Convincing employees and shareholders of both their compelling long term vision and the ability to meet immediate pressures.
As chief executive of Business in the Community I spend much of my time in conversation with leaders of some of our biggest and most influential companies, exploring the challenges they face.
It can be a lonely place at the top, with CEOs under greater public scrutiny than at any other time in history. They must grapple with the future direction and prosperity of their business, inspire confidence and lead by example. Yet they remain constrained by short term pressures (just three in 10 of the CEOs we surveyed think sufficient time is given to long term strategy).
Business leaders are at the heart of ensuring that sustainability is embedded within a company’s culture and throughout the organisation and that business plays its rightful role as a lasting force for change in society. However the average length of service of a chief executive in the FTSE-350 is a little more than six years, dropping to just five years for leaders of FTSE 100 firms. The truth is modern chief executives have a relatively short time to make an impact and create transformational change within a business. That is why considering a long-term legacy should be at the forefront of how modern business leaders operate.
Certainly if you speak candidly to chief executives who really understand the broader purpose of business, this idea of legacy is never far from mind. What difference are we making? What’s the long term value of my role? What unique contribution will we be remembered for?
Responsible business leaders are increasingly considering these questions, and how they can help their business fulfil its long term contract with society in a way that has lasting resonance beyond their relatively short tenure.
There are a number of business leaders who I think history will judge kindly because of the lasting impact they have made. Although no longer at the helm of M&S, Sir Stuart Rose will forever be remembered for his passionate and sometimes bullish determination to embed Plan A into the core of M&S operations. In doing so he not only turned around the fortunes of a much loved British brand, but also completely turned on its head how businesses consider corporate responsibility.

Sir Stuart RoseSir Stuart Rose Photograph: Bloomberg/via Getty Images

Another example is Patrick Dempsey managing director of Whitbread who is building real momentum within the hospitality sector to collaboratively address youth unemployment. Patrick has spearheaded an initiative bringing hospitality employers face to face with unemployed young people – securing commitment to create 60,000 work and training opportunities for 16-24 year olds in the process. Crucially by bringing in other big businesses from across the sector he is ensuring that the programme has a sustainable legacy beyond his own personal passion and involvement.
Of course, it would be naive not to recognise that a crucial part of a CEOs legacy is the financial health of their business. Sir Ian Cheshire who recently announced he will be stepping down from Kingfisher is good example of a leader who maintained the short v long term balance. His seven year tenure not only left Kingfisher in robust health, but has also left a lasting sustainability legacy.

Ian Cheshire of KingfisherIan Cheshire Photograph: Paul Hackett/Reuters

To create a lasting legacy, CEOs should be thinking about the day they will walk out of their offices for the last time right at the beginning of their role and use their very first 100 days to consider how they can create a legacy that outlives their role. They must prioritise their long term strategic vision and the practical steps they will take to achieve this in the short, medium and long term. Leaders must ask the right questions at board level and be brave enough to put long term thinking and legacy on the boardroom agenda – for example, the way in which Veolia’s executive vice president Estelle Brachlianoff has ensured that the circular economy, green products and services are absolutely central to the business strategy.
Integrating responsible practice into business strategy at senior level will ensure it becomes a shared vision that is broader than an individuals’ personal drive. Equally important is how leaders communicate this vision and the difference it will make for a broader group stakeholders.
Of course, the days of the all-knowing CEO are over. Responsible leadership is about more than the individual at the top, it is about embedding the right values and approach to business throughout the organisation. To leave a positive legacy, CEOs must also think about how they are equipping people at all levels within a business to carry the baton and act as advocates for a responsible approach to business.
Success as a leader has changed. Sustainability is a long game and it is those leaders who understand this whose businesses will be profitable, survive and thrive, while also having a positive impact on people and planet – and this is surely the ultimate legacy.
Stephen Howard is chief executive of Business in the Community


Analysis: Climate talks Tapping the barometer

By Eric Marx, Ethical Corporation | September 2014

Government and business leaders meet this month in preparation for next year’s

global climate negotiations, and much has changed since the last such gathering

A UN-sponsored summit on 23 September in New York will mark the first time in five years

that world leaders have gathered together to chart a new course to limit global warming.

With leaders from business and civil society given the opportunity to work directly with heads

of state, organisers say the event may serve to embolden commitments to act in the run-up to

a new global accord due to be signed in Paris in 2015.

“It’s almost a perfect storm for action,” says Paul Simpson, chief executive of the Carbon

Disclosure Project (CDP), a London-based non-profit group and a co-sponsor of the September

summit. The affordability and availability of clean technologies

is one big reason for optimism. More than 30

countries now have climate change regulations in place,

a key difference from the situation at Copenhagen in

2009, the last time world leaders tried to forge a new

legally binding treaty.

There is also a collective awareness of repeated

climate disasters giving rise to a global consensus on the

need for action. About 1 million climate campaigners are

expected to march through New York on 21 September,

while similar events are expected in London and elsewhere.

This could put added pressure on governments in

what’s being billed as the largest climate rally in history.

A scenario document issued by the UN Secretary-General’s office reveals that about 200

leaders will make simultaneous announcements in the morning session, with deliverable

climate initiatives expected to take the form of financial sweeteners or examples of domestic

carbon-cutting action. This will be followed by a Private Sector Forum lunch, where business

leaders will discuss climate initiatives with government officials.

Carbon pricing

A number of companies are preparing to announce commitments to action on carbon pricing,

in particular through the Business Leadership Criteria on Carbon Pricing, led by the UN Global Compact 

together with UN Environmental Programme and the UN Framework Convention on

Climate Change secretariat, as well as with other partners such as CDP, the Climate Group and

the UN Foundation. More than 250 companies have backed a statement drafted by the World

Bank Group calling on governments to explore carbon pricing methods, including emissions

trading schemes and taxes.

“Carbon pricing is a critical tool to address climate change, and momentum is building to

put in place carbon pricing schemes,” says Georg Kell, executive director of the UN Global

Compact. According to the World Bank, nearly 40 countries and more than 20 cities, states and

provinces now use carbon pricing mechanisms. At the

same time, companies such as Microsoft, Exxon and BP

have begun using an internal ‘shadow’ price on carbon

as a risk assessment tool. “The more companies that

do that, the more governments will feel they can more

smoothly bring in a carbon price,” says Simpson.

Carbon pricing will be one of the main issues discussed

at the summit, but the real commitments to watch for will

be in the use of renewable energy, says Damien Ryan, a

senior policy manager at the Climate Group.“Leading big

companies are looking at these falling costs and doing

the numbers,” Ryan says. “Increasingly they’re finding

that purely on financial terms the figures stack up. So,

perhaps we’ll see … the first big companies to set out

their plans for adopting renewable energy on a large


Former hopes that a global carbon market would grow

around the European Union Emissions Trading Scheme

and the Clean Development Mechanism are now fading.

A patchwork of national markets, some of which may be

linked, is now the likely scenario, as a new generation of

carbon regulations begins to take flight. This demonstrates significant political will, but may fall

short in setting a robust price if ambitious emissions reduction offers don’t soon follow.

Negotiators still have more than a year until the Paris conference in late 2015, significantly

more time than the three months allotted to governments in the run-up to Copenhagen in

2009. “There will be a significant agreement at COP21 [in Paris],” says Simpson, “but what we

don’t want to do is create an over-expectation.”

Rather, the intent of the September summit is to signal the direction of travel, with the UN

Secretary-General’s office saying it does not expect there to be any grand outcome. Still, with

both US president Barack Obama and Chinese premier Xi Jinping rumoured to be in attendance,

anything could happen.

Strategic Sustainability

Ethical Corporation, September 2014

Sustainability goals are aligning with business.

The number of chief executives who consider sustainability a high priority for their company has jumped significantly,

but is still less than half of CEOs, according to a McKinsey report. The consultants found that 13% of CEOs now

say sustainability is their number one priority, compared with 5% in 2012, while 36% place it in the top three, compared

to 37% in 2012. The McKinsey survey also tracks a change in attitude about sustainability – CEOs are now less

likely to see it as primarily an exercise in cost-cutting and energy efficiency,

and are more likely to believe that the challenge is to align their company’s

business goals with sustainability goals. Companies should be clearer about their

sustainability strategies, understand resource constraints and extend their

product lifecycles, and make maximum use of technology to boost sustainability, McKinsey says.


Translate »