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All week long, on the Net Impact blog, we will be showcasing pieces written by our #ClimateContributors, who exemplify the work our community does all year long to drive climate action.

COP27: A reflection on the Role of Business and Environmental Justice in International Climate Policy

Surpreya Kesavan, Net Impact Climate Contributor 

This article was originally published in the University of Michigan’s blog for the delegates who attend the UNFCCC Conference of Parties, Climate Blue. 

“The People United Will Never Be Defeated”

“El pueblo unido jamás será vencido”

These words were constantly ringing as a unifying call by civil society at COP27 during the “People’s Plenary”. Indeed, despite the intricacies of the Conference of the Parties (COP), international climate policy and everything else, those words will ring in my head forever like liberty itself. For my focus as part of the Climate Blue delegation at the University of Michigan, I aimed to understand the intersection of business, justice and sustainability. Specifically, I came up with the question – what role does business play in providing just solutions towards a more sustainable future? 

In the environmental justice world, there is often a reckoning of what is necessary, what is fair and what is consensual. That is to say, what is necessary, may not be fair or consensual. When we think about a just transition for climate change, the reality of life is that a just transition may not be very just in the traditional ways one thinks about justice. But, we do have an opportunity to make it consensual and thoughtful. We are sitting at the crossroads of one of the most pivotal periods of our history. What will we business leaders do?

Although business and justice can feel juxtaposed, I argue that to drive towards a more sustainable and just transition, businesses should exercise corporate political responsibility. Leaders need to transcend the traditional material and moral boundaries to move a corporate responsibility agenda rooted in a desire to elevate marginalized voices and flatten power dynamics.

Acknowledgment of Privilege

Before I jump in, I want to acknowledge how truly fortunate I have been to even be in attendance at this COP. On one of the days, I attended a youth networking event hosted by a couple of nonprofits.  One of the youth leaders aptly pointed out that our representation at COP is not just a reflection of us being there to represent our various causes, but also a reflection of the voices not represented in the room that could not be there for different reasons.

As such, I am proud to represent the voices that could not be in the room and take the responsibility of being a delegate very seriously.

How are we defining business in this case?

Business can be a broad and overarching word. It is critical to understand that when referring to business, it is not only the big corporations. While in theory, almost any organization or institution could be considered a business. However, when discussing business in the context of COP27, I am referring to any organization, whether small or large, that seeks to create value through capital creation and growth. We could refer to this kind of operation  as the “private sector”.

What was the role of business at COP27?

The role of business at COP27 was relatively quiet, in my opinion. Although there were some panels and booths with private sector representation, the prevalence of business was not apparent outwardly. Behind the scenes, I imagine quite a few lobbyists and corporations were trying to push country delegates. However, business had no official seat at the table, despite delegates often mentioning business  as the “vehicle of implementation” .

In fact, Secretary of State John Kerry spoke of the intricate dance between the government and private sector, saying, “There is not enough money in any country in the world to actually solve this problem,” Kerry . “It takes trillions, and no government that I know of is ready to put trillions into this on an annual basis.” He called on the private sector, specifically saying, “the private sector has the ability to win this battle for us.” The cover decision of COP27 – the high-level political decisions made at the COP – was to establish and operationalize a loss and damage or “L&D” fund, a fund dedicated to responding to the climate injustices and damage in the Global South, paid for by countries in the Global North. COP27 effectively passed the establishment of a committee of 24 countries to determine the details of the funding facility for Loss and Damage Financing and will determine how to operationalize it at COP28. The roadblock, of course, is how and who will fund it.

Enter the private sector.

What should be the role of business at COP27 (or beyond)?

I believe that the role of the private sector should be to serve as the vehicle of implementation for government and policy through:

• Providing financing for both adaptation and mitigation facilities

• Driving sustainable solutions that can create business value and consumer value

• Enhancing capacity-building mechanisms

There is no shortage of companies currently exemplifying these values. While at COP27, I had the honor of attending several sessions put on through the Future Economy Forum, sponsored by the Egyptian sustainable agriculture company Sekem. Sekem provides an incredible service model across culture, economy, society and ecology. They provide opportunities for Egyptians to fight food security through biodynamic farming and support alternate economic models through cooperative and community efforts, to name a few things. However, I also heard from large companies such as Volvo, which is pushing the fold of demanding government regulation; 3M which is providing advancements in green hydrogen to make it more cost-effective; and even Gas powerhouse TAQA, which launched the largest solar power plant in Sharm El-Sheikh, Egypt, even with the region’s large economic dependency on oil and gas.

We are at a critical time as the biggest advocates for the L&D funding facility are countries that serve as strong allies and maintain important geo-political allyships for the United States. As such, business needs to align with the broader policy and initiative to best serve both the needs of the country and the world. Business leaders must think holistically and view climate as the geo-political issue that it is. After all, geo-political elements govern the system in which business works (for example, consider the implications of the Russia-Ukraine war on the global energy crisis or food system). According to the Accenture UNGC CEO study, 83% of CEOs feel that current levels of geopolitical instability limit the world’s ability to achieve the SDGs. Climate change is not just a cost center for a firm; climate change is an inherently geo-political issue that companies’ leadership need to  centralize into the core of a business. How  we conduct business and educate business leaders must align with this.

So, what do we do with this as business leaders?

Reflecting on COP28, we are at an extremely pivotal moment in international climate policy. The establishment of the committee to explore the Loss and Damage Financing facility puts business leaders in a critical position. Businesses can take a stance and declare to the world that, yes, the fight for our world and against climate change is important and intrinsically related to social justice. After all, there is no social justice without environmental justice. And no matter who we are, we can use our voice. We, as leaders, can:

1. Redefine business school education: Business school often teaches us that  we create value  solely  through capital, and the purpose of a firm is to continue to grow to create value. However, to achieve sustainable outcomes, we need to drive education that is focused on broader implications. This means creating a pipeline of applicants that are beyond the typical applicants interested in business school to continue to drive diversity, both in thought and demographic characteristics, reducing the barrier to entry both to school and to re-entry postgraduate school, and de-coupling educational aspects in the curriculum from consumption-driven assumptions to thinking about broader impact and potential models. Could we have a business where success is not defined purely by continual growth and profitability? And what would it look like to be a leader of such a business?

2. Center business decisions thinking about who is most vulnerable: Although Loss & Damage financing is being discussed at a global scale and in terms of nations, there are plenty of local communities that are constantly impacted by decisions made. Millions of examples of communities, especially marginalized communities, are paying the price for economic development. Perhaps we should think of Loss & Damage  financing  at a more micro-scale. In Michigan alone, there are indigenous communities and historically Black communities, such as Flint, that are suffering from the impacts of climate change. A significant portion of Texas is expected to be climate refugees due to unbearable heat. We’re already seeing the impacts, and business leaders can choose to allocate capital toward innovation and carbon reduction initiatives that protect and provide support for the most vulnerable communities.

3. Advocate for policy with a long-term time horizon: It is a tale as old as time…what is the role of government vs. business in climate policy? We could  constantly debate about how much government intervention should exist, but I hope we can all agree that businesses can push by advocating and lobbying for policies that are broader than short-term gains. Business leaders can drive long-term incentivization  by providing indicators and measurements that align with social and environmental capital, not just economic gain. We need businesses to think about models and solutions that drive consumer behavior to constantly push policymakers towards sustainable and just solutions as equally as consumers can drive change in business. We need businesses to partner with government, NGO’s and the development sector to appropriately allocate capital towards financing initiatives that drive both sustainable outcomes for people, planet and profit. This initiative starts with creating policy frameworks that provide appropriate incentives for businesses to invest and consumers to buy.

Leaving COP27 left me more invigorated than ever that using our voice can and does matter. It is easy to feel pessimistic about the prognosis of climate change, especially driving international consensus amongst policy. But let’s not forget --  a lot of power was driven from small island nations such as Barbados. As countries like that will likely be hardest hit by the impacts of climate change, they are truly moving the needle despite the obvious power imbalances between developing and developed nations. Because, as pointed out in the People’s Plenary at COP27, the word feared most is solidarity. If we stand together, as civil society, government, and business alike, we will never be defeated.

About the Author 

Supreya Kesavan is pursuing a Master of Business Administration and Master of Science in Environmental Science and Sustainability with a focus in environmental justice issues at the University of Michigan through the Erb Institute. Feel free to connect with her on Linkedin.