In September, the Intergovernmental Panel on Climate Change published the first part of its review of the latest climate science, the AR5 report. What makes the IPCC unique is that it is not the voice of a single scientist, or even that of a group. It represents a combined view of in this case 209 lead authors and a further 600 contributing authors. That is 809 scientists from all around the world, calmly setting out the data as they observe it. They observe that since the 1950s, many of the changes to our climate are unprecedented over the previous decades and in some cases millennia. They observe that the atmosphere and ocean have warmed, the amounts of snow and ice have diminished, sea level has risen, and the concentrations of greenhouse gases have increased. They observe that each of the last three decades has been successively warmer at the Earth's surface than any preceding decade since 1850. In the Northern Hemisphere, 1983-2012 was likely the warmest 30-year period of the last 1400 years. Just after the report came out many business leaders urged immediate action from governments, businesses and society to reduce carbon emissions and increase resilience. They were right to do so.
Climate change is sometimes misunderstood as being about changes in the weather. In reality it is about changes in our very way of life. Climatic shifts on the scale suggested by our current emissions trajectory could wreak havoc with the global agricultural system. 2 degrees of average warming could still mean several times that in the world's temperate regions, where much of the world's food is grown. Changing patterns of rainfall could increase the volatility of global crop yields as more countries experience droughts and floods that can wipe out whole harvests in the blink of an eye. All this during a period in which we expect the world to welcome an additional 2 billion people. The arithmetic doesn't add up. The gains in prosperity that many in the world have enjoyed over the past century of growth and industrialization could be severely curtailed if we do not change path urgently towards a more sustainable future. That is to say nothing of the more devastating effects of rising sea levels on the millions of people who live in low lying coastal regions and the prospect of hundreds of millions of environmental refugees that may be created if we do not act now.
Governments' ambitions to limit warming to 2°C now appear increasingly more difficult: in 2012 PWC estimated that the required improvement in global carbon intensity to meet a 2°C warming target had risen to 5.1% a year from now to 2050 - a rate of decarbonization not achieved since World War Two. But every year of delay will increase emissions, lock the economy into a high carbon future and make future emissions reductions more costly. The world must therefore act in a swift and coordinated way to avoid the more pessimistic scenarios of 4°C or even 6 °C average warming above pre industrial levels.
But faced with all this we have no choice but to be optimistic. It is often when most challenged that the human species can surprise us most. As we head towards the UN climate negotiations (UNFCCC COP19) that kick off on 11 November in Warsaw we have to focus on three things; Understating what is possible, showing what is possible and doing what is possible.
Understanding what is possible
Understanding what is possible is simple. We already have a global process for world leaders to agree an international framework for addressing climate change. We have excellent leadership being shown by many nations around the world in their own domestic policy frameworks and their support for international action. Just in the last month I participated in the Global Green Growth Forum in Copenhagen, with prime ministers and cabinet secretaries from countries as diverse as Denmark, Ethiopia, France, Mexico and Indonesia working together, and with others to advance a greener path to growth. Just a week later, the launch of the European Green Growth ministerial summit in Brussels setting a clear direction for the European Union. We must be mindful of the fact that the reality of positive action is changing much faster now than ever before in response to the challenges we face. Sometimes it feels as though the record of media rhetoric is stuck in a defeatist loop, while outside the sun is rising on a new dawn of a low carbon, energy efficient world as more and more countries and companies wake up to the new economic reality that is green and inclusive growth. The reality is that we have a clear road map from the UN meeting in Warsaw to future meetings in Lima and then Paris in 2015 where the global deal will be signed. The reality is that growing coalitions of progressive and responsible businesses, youth and civil society movements are calling for action and the reality is that our political leaders are beginning to respond. Our political leaders have great responsibilities, but as with many situations in life, people often rise or fall to meet your expectations. Our responsibility as citizens, is to expect our leaders to lead, and to give them enough support so that they may do so.
Showing what is possible
Showing what is possible is a particular responsibility for all of us. Leading countries and leading companies can do something magical. They can create the future. They can create it not everywhere but in pockets, they can set the ball rolling towards a better future. In doing so they can show to others in their industries, or their peer groups of countries what it is possible to achieve by thinking differently about the situation. They can inspire changes much greater than they could make alone, and they can act as catalysts for a wider movement of people that want to change direction but can't always see how to do it.
About a decade ago Greenpeace came to Unilever and a number of other companies to point out that our ice cream cabinets used HFC refrigerants. HFCs are a potent greenhouse gas, in some cases with a global warming potential several thousand time that of CO2. They had developed an alternative refrigerant, a natural refrigerant, and asked us whether we would consider using that instead. It wasn't commercially available, it wasn't something we had considered, but in that simple action, Greenpeace succeeded in showing us all what was possible. Fast forward to today and Refrigerants, Naturally! the coalition formed through that process has transformed the market for ice cream freezers and soft drink fridges. Unilever has over a million natural refrigerant powered units in the market place, others have similar numbers, and the issue has been taken up by the Global Consumer Goods Forum - the global association for retailers and consumer goods companies, with work underway to transition the whole global retail and consumer industry to HFC free refrigeration solutions.
Policy makers also need to be able to see what is possible, that's why the recent project launched by former president of Mexico, President Felipe Calderon is so important. The Global Commission on the Economy and Climate, commissioned by the governments of Colombia, Ethiopia, Indonesia, Korea, Norway, Sweden and the UK, and launched in the margins of the UN General Assembly in New York in September, aims to provide a road map for countries seeking to navigate a pathway to a more sustainable future, recognizing the complexity of the challenge and the need to understand the economic case for action as well as the increasingly obvious moral one. With greater research into the trade offs facing governments in how they manage the relationship between tackling climate change and running their economies the project will again show what is possible in a way that should encourage leaders to take their own steps towards a brighter, more resilient and sustainable future.
Doing what is possible
Of course ultimately this is all about action, and that's why wherever we are, whoever we are it is doing what is possible that counts the most. At Unilever we've been trying to do what's possible focusing on the really big areas where we think we can have an impact.
For us the business case for action now is clear. Nearly every month, Unilever is exposed to another natural disaster, from floods in Greece and Turkey to droughts in the Midwest or Hurricane Sandy. The cost to our business can be over €300 million a year. AT Kearny and WRI report even 5 years ago estimated a reduction of 19 to 47 percent in 2018 in earnings before interest and taxes (EBIT) for FMCG companies that do not develop strategies to mitigate the risks posed by environmental pressures. This fact alone should move climate chance higher up the scale of investors as well.
Taking proactive action on climate change is essential to ensuring that Unilever remains a viable business in the future. We will also reap the benefits in innovation, new product development and cost efficiencies. As part of Unilever's Sustainable Living Plan, we have set a target to halve the greenhouse gas impact of our products across their lifecycle by 2020. We are making progress towards this commitment, reducing greenhouse gas emissions from transport and manufacturing and using more renewable energy in our own operations. Since 2008 we have reduced our environmental footprint while avoiding cumulative supply chain costs of over Euro 350 million.
By 2020 CO2 emissions from energy from our factories will be at or below 2008 levels despite significantly higher production volumes. This represents a reduction of around 40% per tonne of production. We will more than double our use of renewable energy to 40% of our total energy requirement by 2020. We recognize that this is only a first step towards a long-term goal of 100% renewable energy. All this is possible now, and we are doing it. With a little more help and encouragement, we believe others could too.
However, our biggest greenhouse gas impact is associated with the use of our products - for example when energy is used to heat water for showering and laundry. Tackling this will require a wider transformation to a low carbon economy. This will require courageous government policies, effective carbon pricing and the wide-scale decarbonizing of energy grids. The conversations at the Global Green Growth Forum in Denmark and elsewhere make it clear that we increasingly know how to do this, we just need to turn up the heat to make it happen at an accelerated pace.
But we have one other significant impact and one other significant opportunity where we have prioritized doing everything that is possible, and that is in the fight against illegal deforestation.
Deforestation accounts for around 18% of global greenhouse gas emissions. Half of that deforestation is linked to just four commodity chains - palm oil, paper & pulp, soy and beef and a very small number of big industry players control over 50% of those commodities. While that might sound complex, it means in reality that a small group of committed companies can work together to drive change not just in their own supply chains but through the market as a whole. This is what Jason Clay of the WWF calls "Market Transformation". Unilever has already set targets for sourcing 100% of our agricultural raw materials sustainably by 2020. In palm oil we are already doing what is possible, buying sustainable palm oil through a certificated route, and we will go further to full traceability by 2020. As more companies come on board this movement will grow. And here we come back to the Consumer Goods Forum (CGF) where at the Cancun Climate Summit in 2010 we announced that CGF members were committing to eliminate illegal deforestation from their supply chains by 2020, sending an incredible signal to the marketplace that the rules of the game were changing.
This action has inspired widespread support from NGOs and Governments, to the point that a new movement - the Tropical Forest Alliance has come together to ensure public private and voluntary sectors can combine forces in new models to support forested countries looking for ways to ensure the sustainability of their agricultural and forest systems.
We need to see more initiatives like this, natural groups coming together led by business but involving all stakeholders to collaborate on the issues where they have disproportional influence over the sustainability performance of a value chain, an industry or a type of emissions. By creating focal points for action we can create platforms in which we can engage policy makers to help them see how by creating the right enabling frameworks these initiatives can be scaled even faster.
COP19 in Warsaw provides the opportunity to transform words into real action and commitments by all involved, especially raising the critical role for business to play. To me it is clear that to cost of not taking action exceeds the cost of action, so there is no time to waste.
Again, the challenge will be for leaders in public and private sectors to demonstrate how they are part of the solution, not the problem, We need to remind ourselves that as the challenges become clearer so do the opportunities and that as the coalitions form and so the commitment to doing what is possible grows. In that way what was once seen as impossible comes quickly within our grasp.
These are important weeks for the politicians and negotiators that will prepare for the climate talks, but these are also important weeks for all of us. Our individual and collective leadership can and must act as a galvanizing force to all those who travel to Poland to agree a brighter future for us all.