Tackling climate change from the private sector

November 11, 2020
Natalia Núñez
Published in

Climate change is one of the main challenges to be faced in the coming years. To meet the goals set out in the Paris Agreement and the Sustainable Development Goals, Colombia has committed to undertake the actions and investments necessary to reduce greenhouse gas emissions by 20% by 2030.

In this scenario, the active role of the private sector is essential, since a large part of the national reaction against the threats of climate change depends on its environmental management. This leads to a series of opportunities for a new business vision that articulates the issue with business action.

What are the main instruments in climate change management?

Colombia has several instruments related to climate change, including the National ClimateChange Policy, which contains the bases and guidelines for incorporating its management into private decisions and in the articulation with policies and programs designed in the public sector.

Based on the NCCP, in line with the goals of COP 21 and the SDG, the creation and implementation of actions aimed at reducing GHGs within corporate strategies are one of the most urgent and necessary alternatives to contribute to this purpose, especially in the mining – energy, transport, and construction and infrastructure industries. 

Thus, there are several measures to be incorporated within the plans and actions to reduce GHG emissions based on international standards and ISO 14064, which aims to limit the emission of greenhouse gases in companies, highlighting: investment, innovation, and development of new technologies with low GHG emissions; promotion of energy efficiency through the implementation of renewable energies to replace fossil fuels, regulated by Law 1715/2014; and participation in carbon credit markets, consisting of the purchase and sale of credits for the emission of GHGs and certificates of emission reduction, regulated by Law 1819/2016, which created the carbon tax, and Decree 926/2017, which regulates the procedures and conditions for the non-taxation and certification of carbon neutral.

What are the benefits of implementing these mechanisms? 

The UN has highlighted that the reduction of GHGs as a consequence of the implementation of climate change management in corporate agendas can imply significant savings in the direct costs of companies and constitute an effective strategy for the management of reputational risk, especially in the mentioned sectors. 

It should be noted that according to the 2014study on the economic impacts of climate change (DNP and IDB), failure to join efforts to mitigate and adapt to climate change could generate losses in the national economy equivalent to 0.94% of annual GDP over the coming decades, so the role assumed by the private sector will be decisive not only for the country's compliance with its international commitments but also for the sustainability of its business activities, through the reduction of GHG emissions.

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