Climate Strategy Proactivity (CSP): The Perspective of Stakeholders

Introduction

The risks associated with climate change need adaptation of multilateral mechanisms by the stakeholders. The business community however has shown positive signal, in recent times, through their growing commitment towards the urgent priorities looking beyond their balance sheets, considering the urgent need for a multi-stakeholder approach to negate the impact of these risks (WEF, 2020). This is in contrast of the general tendency amongst corporations to take the least care of the fast depleting natural resources when they pursue their aspirations of attaining competitive advantage. This tendency has irreversibly been damaging the natural climate making our planet highly unlivable so much so that climate change has taken the centre stage amongst the most significant issues across the world in recent times (Kant & Anjali, 2020). The substantiating evidence for the significant contributions in increasing the global carbon emissions by the corporations are visible in the outcome of the Global Risk Report, 2020 (WEF, 2020) which showcases very gloomy picture of the reality. The report identifies all the 05 top risks related to climatic degradations amongst the top 05 global risks on the basis of ‘Likelihood’ in its ‘Global Risks Perception Survey 2019-20’ (Figure 1) while there were none a decade ago. The corporations themselves are not insulated from their impact and risks (Kant, 2020a).

Figure 1.

Top five global risks in terms of likelihood (WEF, 2020)

Climate change with its impact on the entire planet is a cruel demonstration of the global inequality showcased by the possessions of the higher incomes by the richest countries/people with much more contributions to climate change than their poor counterparts with lower incomes historically. These poorer counterparts, however, have less resilience and more vulnerability towards the socioeconomic costs of climate change (UN ECLAC, 2020). Here, it is important to remember what the father of the nation of India Mahatma Gandhi had once expressed, “Earth provides enough to satisfy every man’s needs, but not every man’s greed”1, and also what the Brundtland Commission, constituted by the United Nations in 1983, highlighted later in its seminal report ‘Our Common Future’ published in 1987 giving the official and most widely accepted definition of sustainable development as the “...development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987). Knowing, in brief, about the major events in the last few decades in connection with the efforts towards sustainability would also be helpful in understanding the background of this chapter which is presented in the Figure 2.

Figure 2.

Major Events in connection with the efforts towards sustainability

A World Bank arm IFC has estimated that developing countries including India can meet the goals undertaken through their submission of the Nationally Determined Commitments (NDCs) to the United Nations Framework Convention on Climate Change (UNFCCC) under the obligations of Paris Climate Accord with the help of policy reforms, suitable conditions & innovative practices of business thereby underscoring the significance of the corporations by virtue of their possession of innovation, finances and other helpful tools (Kant, 2020c). more than a decade ago, Intergovernmental Panel on Climate Change (IPCC) had underscored the significance of adopting appropriate strategies by different parties urging them to take action for bringing about mitigation and adaptation, technological development and research so that the impact of the climate change risks could be minimized (IPCC, 2007). IPCC has continuously been drawing the attention of the polluting corporations to leverage the carbon markets and products innovations with the supporting initiatives of their respective governments facilitating them with efficient operational strategies, and their investors seeking strong commitments (Kant & Anjali, 2020). It is notable that substantial increase in the number of companies reporting initiatives intended to reduce carbon emission as a sign of their growing inclination towards climate consciousness, reported CDP (formerly known as Carbon Disclosure Project) in its report (CDP, 2017).