Most people today understand the urgency of climate change. But few are prepared to act.

As economic gloom and government intervention of unprecedented proportions mark a new era, today's key question is whether we can turn crisis into opportunity and lay the foundation for a low-carbon economy that creates jobs, fosters innovation, and advances economic efficiency.

Certainly, this will require much political will. To begin with, governments participating in COP15 must step up to the plate and deliver a comprehensive and effective global climate framework. But business has a vital stake in this process. In fact, it is only with the private sector that we will be able to turn the tide on climate change.

How so? First off, businesses are masters of persuasion – for better or worse. More than anyone else, they have the power to create demand for products and services (through marketing), shape public opinion (through advocacy and public relations), and they influence policy-makers (through lobbying). It is about time they put these capacities to use to support the fights against climate change.

More importantly, business has unparalleled resources and know-how to innovate and create the kind of solutions we need. In many cases, that has already been done: According to a recent McKinsey estimate, almost 40% of future energy demand growth could be abated by improving energy productivity through existing technologies.

These arguments appear compelling, at least at first glance. As climate change is fundamentally transformative, taking early action appears to be in line with business logic. Also, given the long-term life cycles many investment decisions imply, one would assume that many businesses have long begun repositioning themselves, already discounting for future costs and identifying new opportunities.

Moreover, global business growth of the scale seen in the past three decades has been the result of widespread and massive economic integration. What is at stake now is nothing less than the long-term viability of this globally integrated economy. Without a successful outcome of COP15, there is a high likelihood of new trade barriers and competition-distorting fallouts, adding to the frightening specter of protectionism already emerging in response to the economic crisis.

In sum, one would assume that businesses everywhere are fully aware of these stakes, eager to act in order to minimize risk and capitalize on new opportunities. But the reality is a different one. Business is doing alarmingly little of what would be in its best long-term interest.

To be certain, many companies have been developing and marketing products and services for the green economy. And energy efficiency as a powerful driver of cost reductions has been understood for years, if not decades.

Nonetheless, only a small share of companies is making climate change a central strategic and operational priority – setting emission reduction goals and publicly disclosing results, investing in clean technologies and innovating green solutions in critical areas – from energy to transportation and to buildings. According to a 2008 study by the Ethical Investment Research Service (EIRIS), only 10% of companies in high-impact sectors like oil and gas have adopted a good or advanced response to climate change risk.

These sobering figures are supported by the U.N. Global Compact's own experience: While more than 5,000 businesses have made a commitment to its ten principles, showing that corporate responsibility has truly gone global, efforts to win over business for concrete and tangible climate action have been moving rather slowly.

It is hard to pinpoint the exact causes of this reluctance to act. Businesses often point to regulatory uncertainties or lack of clarity about carbon-pricing. A crucial factor appears to be that climate change is a long-term systemic challenge, and – lacking the cyclical nature of downturn and recession – is likely to stay with us for a long time.

Much of the private sector, however, plans and operates in relative short cycles, having to meet the quarterly or annual expectations of capital owners. Managing this paradigm shift from short-term profit maximization to long-term sustainability will thus be one of the most important tasks to set the stage for the low-carbon global economy we have to build.

Now, what is it that business can and must do at this point?

The good news is that at least some companies are leading by example, driving innovation in their sectors and sharing good practices – from ambitious emission reduction programs to innovative approaches to carbon capture and storage. Much of this has been taking place under the umbrella of Caring for Climate, the U.N. Global Compact's own climate engagement platform with now close to 400 signatories from 65 countries.

However, capitalizing on the core strengths outlined earlier, business must flex its advocacy muscle and push even more companies to take action on climate change – within their sectors, their markets, down their supply chains. Likewise, business should use its influence with policy makers to lobby for carbon reductions and workable technical standards. What we really need is new era of business statesmanship driven by the realization that the time to act is now.

On the technological side, we need to stimulate and encourage more innovation and support so that existing solutions are widely shared. This will also require a strong stand on open markets, free trade and global integration – and against protectionism and further barriers – as globally integrated supply chains are our best guarantee to quickly diffuse technological innovation across the globe.

Finally, while focusing on climate action and the reduction of carbon emissions, business will also need to tackle the consequences of climate change. There is a market for adaptation, and already companies are actively addressing that climate change is intimately linked to other challenges, such as water sustainability.

On May 24-26, 2009, business leaders from around the world will come together in Copenhagen for the World Business Summit on Climate Change, the central business gathering in the lead-up to COP15. It is our hope that the positive experiences to be shared there will trigger a truly transformative movement of business taking action on the momentous challenge before us.

*Editor's Note: This commentary originally appeared at the COP15 official website.

Related Reading:
Blue is the New Green: Gen 2 Sustainability Thinking
Todd Stern: Tougher Tactics to Fight Carbon Emissions

Image Credits:
COP15