KPMG: Business to progress climate change agenda

Wednesday, 2 June 2010 1 Comment

Business will be a leading driver for climate change as the effects of the Copenhagen Accord begin to impact world economies, finds a KPMG white paper launched in New Zealand today.

The paper, The Copenhagen Accord: A view of the work in progress contains statements that will impact global business operations, trade and investment. It also outlines the basic pathway for a transition to a low carbon global economy.

KPMG New Zealand director of sustainability services Jamie Sinclair says the Copenhagen Accord, which New Zealand joined in February 2010, has been largely underestimated by business as it failed to deliver agreement over specified emission reduction targets.

"However, it resulted in a powerful agreement by the world's leaders, including developing and developed nations, that there must be a global, long term response to climate change."

He says that the developments likely to have the most significant impact on New Zealand business are the Accord statements that address peaking national emissions and the emergence of mitigation mechanisms that create specific challenges for our agrarian-focused economy.

Some of the challenges for New Zealand companies include:

• Managing your business where carbon is a cost of production;
• Understanding the flow on impacts for consumers and their perceptions and decision making; and
• Operating in a world where carbon emissions create new and variable levels of border protection.

Sinclair says economies reliant on manufacturing, resources and services will each be affected by the Accord uniquely; with these nations and individual companies now challenged to assess their impact and response.

He says the key mechanism of the Copenhagen Accord includes Public Private Partnerships (PPPs) that will allow for private investors in green initiatives to share financial risks with governments.

"Going forward the Accord opens up many possibilities for facilitating the flow of capital required to fund green opportunities and should have a strong impact on the green investment trend."

Sinclair says the Copenhagen commitment from the international community to support developing nations minimise their carbon output has put US$100 billion of investment opportunity on the table.

"Understanding and preparing for the different scenarios that might arise from the Accord and subsequent policies are a business imperative. Businesses that fail to understand this will be left behind," says Sinclair.

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