How firms can reap from climate change

COP26 is coming to a close and it is business unusual based on the commitments being made by nations. There is a high level of urgency and focus, which is what we need on matters climate change and truly, real commitments are being made with real money backing them.

For instance, the Biden administration has committed $11.4 billion for climate financing, while Tokyo has pledged $10 billion over the next five years. My expectation is that commitments from COP26 will go well beyond $100 billion for 2022.

The key objective is for countries to implement their Nationally Determined Contributions (NDCs) as per the requirements of the Paris Agreement whose key objective is to keep the temperature below 1.5 degrees Celsius over preindustrial levels.

It should be noted that a week before COP26, the world's 20 richest nations, The G-20, met in Rome to come up with plans on how they could go beyond containing global temperature rise.

If deliberations from the G-20 meetings as well as the commitments we are seeing coming from COP are implemented, this will be a game-changer and will go beyond what we had expected of the Glasgow meeting.

Closer home, the Corporate Commitment on Climate Change - Kenya (4CK) conference organised by KCIC Group brought together the Kenya corporates under the banner of Kepsa and KAM to deliberate and make commitments when it comes to the role of businesses on climate change.

Kenyan companies will need to reduce their greenhouse gases emissions by at least 2.5 per cent per annum with a baseline of 2020 in the hope of helping Kenya achieve its NDC ambition which is to abate 32 per cent by 2030.

To achieve this, companies will need interventions such as increased use of renewable energy, energy efficiency, low-carbon technologies and use of clean, efficient and sustainable energy technologies to reduce over-reliance on fossil and non-sustainable biomass fuels as well as sustainable waste management, climate-smart agriculture, growing trees and managing forests, and curbing deforestation.

Integration of climate change mitigation and adaptation actions into companies’ strategic business plans is a key intervention that businesses should consider. This will include reduction of water consumption, increase in water use efficiency and wastewater management, early warning and emergency response systems and overall production and consumption efficiency in line with the priorities espoused in the Kenya National Adaptation Plan.

Raising awareness among staff and designing and developing training modules on climate change to build technical capacities in an area that will require investment from the private sector is also key. Companies will need to train their staff on climate change risks as well as opportunities presented by climate change. This will go a long way when it comes to the implementation of climate-related initiatives as the staff will be aware of what needs to be done, why and how.

Companies will need to participate in various forums to provide inputs on critical issues of climate change and share technical know-how and at the same time, be exposed to the best practices.

Climate change will also bring about innovations, resulting in the development of much-needed green products and services to aid access to more climate-sensitive products and services.

This will only happen to the companies that will look at climate change as an opportunity for them to reinvent their operations. Such innovations will call for collaborations between local, regional and international private sector actors aimed at strengthening climate resilience in Kenya and beyond.

The message coming out of COP26 is that there is a high expectation that women and youth will play a big role when it comes to climate change mitigation and adaptation.

It is, therefore, important for Kenyan corporates to consider gender and youth-related considerations within the climate change planning processes. This will include the provision of finance and capacities targeting youth and women for them to be able to take more actions when it comes to climate change.

When it comes to reporting the actions being undertaken by companies, there is a need for more firms to engage in reporting their carbon footprint. Far too few companies in Kenya are providing their sustainability report, a situation that needs to improve if we are to gain the dividends provided by sustainability reporting.

It is, therefore, imperative that companies make commitments to have reporting mechanisms that will enable them to measure their carbon footprint.

Clearly, there are many ways in which the Kenyan corporates can engage with climate change from a strategic perspective and the above just presents some of the ways that can be of value when companies consider climate change as an opportunity.