There’s no denying the current climate change concerns, as negative repercussions demonstrate in detrimental ways across the globe. These events have propelled huge global pushes for initiatives and solutions from government leaders, scientists and business owners to eradicate the problem we face and compel others to follow suit in the pursuit of a greener world.
The latest monumental update in the fight against climate change comes in the form of the World Bank, who announced in Paris that they ‘will no longer finance upstream oil and gas’ after 2019 because of the growing environmental concerns. The World Bank had been lending around £750 million annually (around 2% of the Bank’s portfolio) into the extraction of oil and gas, all of which will stop next year. The Bank has noted that they would only consider lending to oil and gas projects in the poorest of countries where the investment would help the needy receive access to energy, and only as long as the project did not conflict with the drive to reduce greenhouse gases in line with the 2015 Paris climate change accord.
Pressure from lobby groups saw the World Bank take action against the hazardous materials, similarly to what happened in 2010 when the World Bank ended their support towards coal-fired power stations. Now, coal power stations are set to be extinct by 2025 as the government lay out new rules that will force such types of plants to close. One of the UK’s eight remaining coal power stations is even set to stop generating electricity this year.
Campaigner Gyorgy Dallos for the Greenpeace International believes this demonstrates that “[t]he end is clearly coming for the oil and gas industry as the pace of change accelerates,” particularly as the Bank’s decision shows no confidence in the future of fossil fuels that could potentially put off businesses from utilising these materials.
Commenting on their decision, the Bank remarked they needed to change the way they operated in our “rapidly changing world” – advice that all organisations should take heed of as climate change leads the way in which businesses should morally and strategically operate. In addition to ceasing funding environmentally hazardous business, the Bank is set to see 28% of its lending going toward climate action by 2020.
The announcement was presented at the One Planet Summit in front of Emmanuel Macron, the French president and UN secretary general, Antonio Guterres. This news comes at the same time as the revelations of the governor of the Bank of England who discussed the international support for a low-carbon economy and the persuasion towards organisations being open about their impact on climate change and the potential risks they present.
Six of the leading British banks – Santander, Standard Chartered, Royal Bank of Scotland, HSBC, Barclays and Lloyds – have all emphasised their support for the Task Force on Climate-Related Financial Disclosures, along with leading companies from a range of environmentally-related industries. Under the plan, organisations are responsible for disclosing their direct and indirect impact on global warming in their financial reports. Additionally, the banks are liable to reveal how much they have lent to companies that have climate-related issues which subsequently reflects on their own corporate responsibility.
The chair of the Task Force, Michael Bloomberg, stated: “Climate change poses both economic risks and opportunities, but right now, companies don’t have the data they need to accurately measure the risks and evaluate the opportunities”. This is perhaps a scary thought for many organisations who rely on the energy from oil and gas for their own operations. If you’re a business decision-maker who is worried about the implications of such decision on your supply chain, fear not; the global shift away from fossil fuels presents a huge opportunity to review this vital part of your business operations.
Ask yourself – could your business utilise greener energy sources in place of fossil fuels? Would your business save money in the long-run with the use of renewable energy sources? What are the other benefits of utilising renewable energy in your business? How would you incorporate renewables into your business operations? If these questions are throwing up more questions than answers, it’s time to seek out the advice of the professionals.
Our experts dedicated to this area of business operations can also highlight the steps required to ensure you are reducing your energy consumption. The benefits of professional energy management not only include reduced costs over time but greener business operations that benefit the environment and positive corporate image to your customers which is great for your bottom lines. Not to mention, the more energy your organisation consumes, the greater the risk of falling victim to high energy price increases or short supplies – both of which can adversely affect the organisation’s profitability.
To discuss greener energy sources in more detail, as well as your business costs management, contact our specialists today. Collectively, they boast years of experience in their specialisms and have the skills and expertise to ensure your business is prepared for the inevitable push into greener business operations, as well as showing you how your business can save money!
Article by: Richard Clayton