While President Barack Obama and more than 100 other world leaders will meet in a summit devoted to climate change, the most tangible action on global warming this week may come from investors and companies.
A foundation tied to the Rockefeller family, heirs to the Standard Oil Co. fortune, Monday announced it’s joining other groups in exiting coal and tar sands investments. Mars Inc. and 11 other companies unveiled plans to phase out fossil-fuel use. And Statoil and five other oil and gas are set to pledge to plug methane leaks.
“The leadership from companies has been remarkable and welcome,” Carter Roberts, the president of the World Wildlife Fund in Washington, said in an interview. “You will see a swirl of commitments.”
The United Nations Climate Summit runs all day Tuesday at the United Nations in New York, just before the annual meeting of the General Assembly. After the estimated 125 leaders speak, limited to four minutes each, specific pledges from companies will be discussed at an afternoon session Secretary General Ban Ki-moon is hosting with executives from companies such as Air France-KLM, Siemens, Royal Dutch Shell and McDonald’s., as well as author Naomi Klein and former Vice President Al Gore.
Companies not participating also will feel heat: The Rockefeller Brothers Fund is now one of 180 institutions and local governments and 654 individuals who have so far pledged to cut investments in 200 coal, oil and gas producers from their asset holdings. Total divested funds are $50 billion, as commitments to sell have doubled so far this year, according to Arabella Advisors, which works with philanthropic groups on their investments.
With the Rockefeller Brothers Fund, managing assets of about $860 million, set to pull out of coal and oil sands, and to look at phasing out investments in oil and natural gas, the effort will get a symbolic boost.
“It’s not a huge economic lever, but it does begin to send financial signals and it brings visibility to the issue,” Stephen Heintz, president of the fund that is separate from the larger Rockefeller Foundation, said in an interview. “This is like a snowball, and it’s going to get more and more mass as it rolls forward.”
The aim of the summit, Ban said, is to gather momentum for climate negotiations that are set to conclude at a meeting in Paris next December. The goal is to curb the release of carbon dioxide and other warming gases so that average global temperatures don’t rise more than 2 degrees Celsius.
In a report Monday, scientists said carbon dioxide emissions from burning fossil fuel are set to rise 2.5 percent this year to a record 40 billion tons.
“I’m really going to ask world leaders to show their political will and give a clear guidance and directions” to negotiators, Ban said in an interview Sept. 18. “I count on the U.S. and China, who are the biggest greenhouse-emitting countries” to “lead this campaign.”
Ban was among 310,000 who took to the streets of Manhattan Sunday to press for action in what organizers called the largest social demonstration in the city in a decade. New York Mayor Bill de Blasio, who also marched, announced a plan to cut the city’s emissions 80 percent by 2050.
“Since the fossil fuel companies have money, we have to have something on our side, and that’s people,” said Bill McKibben, the head of 350.org, the organizing group.
The U.N. summit took a symbolic hit after China, the world’s top carbon polluter, and India, third biggest after the U.S., decided not to send their top political leaders. That’s important because the last attempt at a global accord broke down in Copenhagen in 2009, when the talks dissolved into finger- pointing between rich and poor nations over which group should move first on emissions reductions.
With the heavy lifting of the negotiations months away, officials aren’t expecting new breakthroughs from the government leaders this week, and the final deal is likely to fall short of the far-reaching legal framework of the 1997 Kyoto Protocol.
“This really is not a negotiating session. It was never intended to be that,” Todd Stern, the lead State Department negotiator, told reporters last week. “What would be very important is that we have strong indications of seriousness and commitment by the leaders.”
In the meantime, much of the focus is on what companies are doing or should do.
“Policymakers need to hear the voice of business, because there is the conventional wisdom that they don’t want to do anything,” said Nigel Topping, executive director of CDP, a firm that tracks companies’ disclosure of their emissions. That’s not the case, “and we think that could shift the dynamic.”
Some corporate leaders see cutting their carbon footprint as an economic necessity or business opportunity, Topping said. Already more than 150 companies worldwide use an estimated price on carbon to determine which long-term investments make sense, up from 100 just a year ago, CDP said in a report released last week.
To be sure, advocates for curbing carbon emissions – even among the corporations – say that the company actions won’t come close to addressing the problem.
“Absolutely, we can’t do it alone, not as a business, not as businesses and not as individual actors,” Jeff Seabright, head of sustainability at Unilever, said in an interview. “It will require governments to take action.”
Candy maker Mars pledged in 2010 that it would transition to full renewable power for its factories and offices by 2040, and today it’s signing on with other companies ready to take that same pledge.
“We’re looking to drive more and more people into this way of thinking,” Kevin Rabinovitch, director of sustainability at Mars, said in an interview.
The World Bank corralled more than 1,000 companies and investors in support of a carbon price, which means either a tax on carbon or a cap on carbon and an emissions trading system, including companies such as Unilever and Swiss Re. Countries such as Russia and China also signed on to the pledge.
“You are getting an affirmation that carbon needs a price,” Rachel Kyte, the World Bank vice president responsible for the effort, said in an interview. “There is more and more attention on the exposure to carbon assets.”
Separately, environmental advocates have pulled together a group of companies that are set to announce tomorrow their pledge to make sure their purchases of palm oil or soy products don’t lead to deforestation. Forests absorb carbon dioxide, and clearing old forests for farmland or palm trees is a major cause of global warming. Agriculture is responsible for a fifth of total global emissions.
And six oil and gas producers, including Statoil and Houston-based Southwestern Energy Co., will join with environmental groups to pledge reductions in the methane they release.
Students and activist investors have rallied around the effort spearheaded by 350.org to persuade foundations such as the Rockefeller Brothers Fund, corporations, universities and others to divest from the 200 companies with the largest share of coal and oil resources, including India Coal and Exxon Mobil.
In a symbolic boost, South African cleric Desmond Tutu, who helped spur calls for divestment that led to the end of apartheid in his home nation in the 1980s, will offer a video in support of the cause.
Asked about Exxon being targeted by the divestment effort, a company spokesman referred to a report it released earlier this year.
“Energy use and mix evolve slowly due to the vast size of the global energy system,” the Exxon report said. “We believe the transition to lower carbon energy sources will also take time, despite rapid growth rates for such sources.”
Nagendra Kumar, Coal India’s technical director, said, “We are fully conscious of our responsibility towards the environment and taking every possible step to help the cause of environment.”
The UN’s lead climate negotiator said the pledges from companies and discussion of leaders presented an “unprecedented collaboration” that will boost the negotiations on a global accord.
“Every single sector that has emissions will be here to share what they can do,” said Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change. “This is the moment in which we all should stand up. The shift to low carbon has started and is irreversible.”
– With assistance from Rajesh Kumar Singh in New Delhi and Christopher Martin in New York.