Since climate change is the world’s problem the impact of which transcends different industries and environmental consequences, it is only natural that it can be tacked effectively only through the contributions of a variety of stakeholders. In this context, businesses have a paramount role to play. The policy response to climate change does not have to be the foe of corporations. Quite on the contrary, businesses can benefit from innovative technologies, government incentives, and the implementation of low carbon economy principles. Moreover, business can be the driver of low carbon economy and society. Instead of simply complying with the regulations imposed by the government, business has the advantage of being proactive in developing cost-effective solutions and gaining new market shares, be it the production of the wind or solar energy, electric cars, organic agriculture, ecotourism, or sustainable construction materials. (Romm, 2016)
Overall, the list of stakeholders in the action to combat the negative impacts of climate change comprises of diverse but interconnected actors. Without a doubt, different government agencies, the legislature and the government as a whole are key contributors to shaping and guiding policy solutions. The international community, in the form of intergovernmental organizations, such the United Nations or the European Union, is the powerful coordinator and facilitator of these efforts on the global arena. However, the stakeholders also include business, media, NGOs, communities, and research institutions. (Romm, 2016)
Business occupies an unusual dual place in regard to climate change. On the one hand, it is the industrial activities that have been the major source of manmade contribute to climate change. On the other hand, business is seen as an important for offering climate change solutions through technological advancements, corporate social responsibility and increase the efficiency of production. The former position on this spectrum presents, however, a major barrier to climate change action. Corporate power, especially in heavy industries, is a common lobbyist against sensible government regulation. It is largely a result of the currently prevailing neoliberal model of economy that favors business and preaches corporate profits above other values. (Wright & Nyberg, 2015)
The issue of corporate power is strongly connected to another debate shareholder/stakeholder conflict. The shareholders of businesses are first and foremost interested in maximizing their profit, while the stakeholders, including customers and communities, are often calling for the adaption of products and services in an eco-friendly way. It is noteworthy, however, that the interests of stakeholders and shareholders do not necessarily have to be divergent but can find common ground on cost-efficient business solutions. (Wright & Nyberg, 2015)
Business has sought to address the issue of climate change by adaptions in manufacturing, transportation and branding of its products and services. The involvement of businesses in energy efficiency, clean energy, fair trade, recycling, local production of food, and even eco-friendly fashion industry has grown tremendously in the recent years.
The stakeholders provide important incentives to business to change its operation models and become environmentally responsible. One obvious example is tax credits and other fiscal incentives that the government can offer to corporations for reducing their carbon footprint. These incentives can also be targeted at consumers, for instance, by eliminating the sales tax on the purchases of electric cars, which undeniably boosts the readiness of manufacturers to explore new markets. Likewise, NGOs play the role of advocates of climate change solutions by educating consumers and raising awareness in communities. Consequently, the attract consumers to green businesses as well.
Progressive stakeholders, including some governments, NGOs and a few corporations, have come to realize that it is hardly enough to reduce emissions in the manufacturing phase of the business cycle. There is strong research evidence that it is the end use of goods and services that has the most damaging effect on climate change. Therefore, the future of collaborative actions against climate change lies in influencing consumer behavior. Some corporations have actively engaged in awareness campaigns and the creations of incentives for consumers. For example, Unilever has launched Sustainable Living Plan, which helps consumers understand the basics of reducing energy in the end use of Unilever’s major products – shampoos and detergents. Businesses also need to become proactive in labeling their products and especially packaging in the way that would guide consumers to sensible recycling habits. (Lye, 2014)
The government and NGOs have a large role to play in creating and advocating for regulations that target efficient and environmentally friendly end use of consumer products. It can include subsidizing product adaptions with lower carbon footprint triggered at the end use phase. Moreover, more development is needed in the efforts of building a circular economy and an economy of sharing. Finally, businesses should receive incentives for efforts in servicizing their products, that is, substituting purchases by leasing or hiring them. (Lye, 2014)
Lye, G. (2014). Business as low carbon transformation driver. 2014), Carbon governance, Climate change and business transformation, Abingdon, UK: Routledge, 55-79.
Romm, J. (2016). Climate Change (1st ed.). Oxford: Oxford University Press.
Wright, C., & Nyberg, D. (2015). Climate Change, Capitalism, and Corporations. Cambridge University Press.