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Business carbon management and the implications for SDGs

Strategic and Quantitative Analysis CentreSunhee Suk and Xin Zhou

TT7 Thematic Track 7Practical Guidance for SDG Integration through Interlinkages Analysis and Visualisation:16:05 - 17:35, Room No.301+302

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Business role and SDGs

Pivotal role of businessIn making a transformational change towards achieving sustainable production, they provide jobs and decent work, and run sound business through green investment to low-carbon technologies and resource efficiency, and green global value-chains.

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Interest and opportunities for SDGs• Buzzword of "SDG" The increasingly frequent occurrence of the "SDGs" among business circles is testament to the growing interest in taking action and forming strategic responses to the SDGs as part of business operations.• Business opportunitiesAchieving the Global Goals could generate an estimated 12 trillion USD in market opportunities in four economic systems: food and agriculture, cities, energy and materials, and health and well-being (BSDC, 2017)..

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Companies’ performance of non-financial aspects related to SDGs is getting important and emphasized to be incorporated throughout entire business operations and management.

Business process and relevant SDGs

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Climate change under the SDGs and carbon pricing

The 2030 Agenda identifies, in its paragraph 14, climate change as

“one of the greatest challenges of our time”

As a key measure, attached a price to greenhouse gas

emissions, Carbon pricing, has been

introduced.

- China: Announced a National ETS (2017)- Japan: Implementing city

level cap and trading schemes (2010~), Imposed tax for Climate Change Mitigation (JPY 289/t-CO2)

SDG 13 aims to “take urgent action to combat climate change and its

impact”

Private sector better understands the risks of climate impact as well as

pressures of related government policies such as carbon pricing on their

business

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(1) Corporate carbon managementItem Management Activities

CMA01 Collecting information on policy related to energy savings and GHG emission reduction CMA02 Regular in-house training program for energy saving and GHG emission reduction CMA03 Encouraging daily energy saving activities in office (ex. turning off lights)

CMA04 Participating in training programs for energy saving and GHG emission reduction held by the government/local government CMA05 Short & long-term targets for energy savings and GHG emission reduction in place

CMA06 Conducting analysis on energy use and GHG emissions to identify potential areas for energy savings and emission reduction CMA07 Installing monitoring equipment on energy consuming facilities CMA08 Enhancing daily facility maintenance for energy saving and GHG emission reduction

CMA09 Setting up an internal standard for energy savings and GHG emission reduction management CMA10 Establishing a unit or department for emission tradingCMA11 Purchase new production facilities to save energy and reduce GHG emissions

CMA12 Investing in R&D to improve production processes for energy savings and emission reduction CMA13 Enhancing optimization in transporting materials and goodsCMA14 Making adjustments in energy mix to use more clean energy sources

CMA15 Releasing sustainability reports regularly that contain data for energy consumption and GHG emissions CMA16 Set up a strategic carbon management (plan-do-check-act)CMA17 Setting up a plan and allocating budget for purchasing permits and trading

CMA18 Establishing decision making process in relation to carbon trading (e.g., purchase, sell, price projection, etc.)CMA19 Establishing carbon management strategy based on regular analysis of carbon maCMA20 Adopting a green or carbon management accounting system

Reactive strategy

Passive strategy

Carbon manage

mentDefensive strategy

Accommodativ

e strategy

Proactive strategy

daily energy saving activities

Short & long-term targets

Installing monitoring

internal standard

a unit or department new production facilities

Investing in R&D to improve production processes

more clean energy sourcessustainability reports

strategic carbon management

regular analysis of carbon market carbon management accounting system

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(2) Relevant SDGs to corporate carbon management7.2 Increase renewable energy7.3 Double energy efficiency7.b Expand energy infrastructure

8.4 Improve resource efficiency

9.4 Resource-efficient and clean technology-based industrial retrofit9.5 Enhance R&D for industrial sectors

11.6 Reduce urban environmental impacts

12.6 Promote social and environmental reporting by companies12.a Support R&D capacity of developing countries for SCP

13.2 Integrate climate change measures into national policies13.3 Raise awareness on mitigation and adaptation

17.7 Promote environmental technology transfer to developing countries

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4. SDGs interlinkage analysis: analytical framework

13.2 13.3

How companies respond to stringent climate policy such as carbon pricing policy and the implications for overall SDGs?

Examine the causal relation between the identified SDGs and targets and their interlinkages with other targets.

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5. SDGs interlinkage analysis results: (1) Japan

Source: Snapshot from IGES SDGs Interlinkages Web Tool

7.3

8.1 Improve resource efficiency8.4 Decent work for all8.5 Improve youth employment8.6 Implement the ILO Global Jobs Pact

10.1 Income growth of bottom 40% population10.4 Policy for greater equality

Policy for greater equality

12.4 Sound management of chemicals and wastes12.5 Reduce waste generation

Synegistic with Target 7.3

6.4 6.6 8.1 8.4 8.5

8.6 8.b 9.1 9.c 10.1

10.4 12.4 12.5

Conflicting with Target 7.3

2.3 2.4 8.2 9.2 12.3

LegendStrong

+veStrong

-ve

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Interlinkage between relevant Targets and other SDGs in JapanSDG 1:Eradicatepoverty

SDG 2: EndHunger

SDG 3: Goodhealth & well-being

Goal 4:Qualityeducation

Goal 5:Genderequality

Goal 6: Cleanwater &sanitation

Goal 7:Affordable &clean energy

Goal 10:Reducedinequalities

Goal 11:Sustainablecities &communities

Goal 13:Climate action

Goal 14: Lifebelow water

Goal 15: Lifeon land

Goal 16:Peace, Justice& stronginstitutions

Goal 17:Partnershipsfor the goals

7.3 2.3, 2.4 6.4, 6.6

8.1,8.4,8.5,

8.6, 8.b

8.2 9.1, 9.c 9.2 10.1, 10.4 12.4,12.5 12.3

7.b 4.a 5.4 6.4, 6.5 7.1 11.1

8.4 2.3, 2.4 6.4, 6.5, 6.6 12.4,12.5 12.3 14.1 15.1

9.4 3.9 11.6 13.2

9.5 14.a 17.6

11.6 3.9 6.1, 6.6 9.2, 9.4 9.1 12.3 12.5

12.a 14.a 17.6

13.2 13.3, 13.a,

13.b 14.3 16.7

13.3 4.1, 4.4, 4.7 13.2, 13.a,13.b 14.3

Goal 9:Industry,

innovation &infrastructure

9.1

9.5

9.4

12.a

Goal 8: Decentwork &economicgrowth

Goal 12:Responsibleconsumption &production

8.2

8.1

Sheet1

7.37.b8.49.49.511.612.a13.213.3SDG 1: Eradicate povertySDG 2: End HungerSDG 3: Good health & well-beingGoal 4: Quality educationGoal 5: Gender equalityGoal 6: Clean water & sanitationGoal 7: Affordable & clean energyGoal 8: Decent work & economic growthGoal 9: Industry, innovation & infrastructureGoal 10: Reduced inequalitiesGoal 11: Sustainable cities & communitiesGoal 12: Responsible consumption & productionGoal 13: Climate actionGoal 14: Life below waterGoal 15: Life on landGoal 16: Peace, Justice & strong institutionsGoal 17: Partnerships for the goals

(double energy efficiency)(expand energy infrastructure)(improve resource efficiency in consumption and production)(resource-efficient and clean technology-based industrial retrofit)(enhance R&D for industrial sectors)(reduce urban environmental impacts)(support R&D capacity of developing countries for SCP)(Integrate climate change measures into national policies)(raise awareness on mitigation and adaptation)7.32.3, 2.46.4, 6.68.1, 8.4, 8.5, 8.6, 8.b8.29.1, 9.c9.210.1, 10.412.4, 12.512.3

SDG 1: Eradicate poverty7.b4.a5.46.4, 6.57.18.29.111.1

SDG 2: End Hunger2.3, 2.42.3, 2.48.42.3, 2.46.4, 6.5, 6.68.112.4, 12.512.314.115.1

SDG 3: Good health & well-being3.93.99.43.911.613.2

Goal 4: Quality education4.a4.1, 4.4, 4.79.512.a14.a17.6

Goal 5: Gender equality5.411.63.96.1, 6.69.2, 9.49.112.312.5

Goal 6: Clean water & sanitation6.4, 6.66.4, 6.56.4, 6.5, 6.66.1, 6.612.a9.514.a17.6

Goal 7: Affordable & clean energy7.113.29.413.3, 13.a, 13.b14.316.7

Goal 8: Decent work & economic growth8.1, 8.4, 8.5, 8.6, 8.b8.28.113.34.1, 4.4, 4.713.2, 13.a, 13.b14.3

8.2

Goal 9: Industry, innovation & infrastructure9.1, 9.c9.19.2, 9.49.59.4

9.2

9.1

Goal 10: Reduced inequalities10.1, 10.4

Goal 11: Sustainable cities & communities11.111.6

Goal 12: Responsible consumption & production12.4, 12.512.4, 12.512.a12.3

12.312.312.5

Goal 13: Climate action13.213.3, 13.a, 13.b13.2, 13.a, 13.b

Goal 14: Life below water14.114.a14.a14.314.3

Goal 15: Life on land15.1

Goal 16: Peace, Justice & strong institutions16.7

Goal 17: Partnerships for the goals17.617.6

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5. SDGs interlinkage analysis results: (2) China

Source: Snapshot from IGES SDGs Interlinkages Web Tool

7.3

8.1 Improve resource efficiency8.4 Decent work for all

10.1 Income growth of bottom 40% population10.4 Policy for greater equality

2.3 Double agriculture productivity2.4 Build sustainable food production systems

7.1 Universal access to energy

Synegistic with Target 7.32.3 2.4 6.6 7.1 8.1

8.4 9.1 9.5 9.c 10.2

10.3 10.4 10.7 12.4 12.5

12.a

Conflicting with Target 7.36.4 7.a 8.2 8.5 8.6

8.b 9.2 9.4 9.a 10.b

12.3

LegendStrong

+veStrong

-ve

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SDG 1:Eradicatepoverty

SDG 2: EndHunger

SDG 3: Goodhealth & well-being

Goal 4:Qualityeducation

Goal 5:Genderequality

Goal 13:Climate action

Goal 14: Lifebelow water

Goal 15: Lifeon land

Goal 16:Peace, Justice& stronginstitutions

Goal 17:Partnershipsfor the goals

7.3 2.3, 2.4 6.6 6.4 7.1 7.a 8.1, 8.4

8.2,8.5,

8.6, 8.b

9.1,9.5, 9.c

9.2,9.4, 9.a

10.2,10.3,10.4,10.7

10.b12.4,12.5,12.a

12.3

7.b 4.a 5.4 6.6 6.4, 6.5 8.4 8.2 9.1 9.4 17.6

8.4 2.3, 2.4 6.1, 6.6 6.4, 6.5

12.412.5,12.a

12.3 14.1 15.1

9.4 3.9 4.a 5.4 6.4, 6.5,6.a

6.1, 6.2,6.6 7.a

7.1,7.3, 7.b

8.2,8.5,

8.6, 8.b8.1, 8.4 12.3

12.4,12.5,12.a

17.6

9.5 14.a 17.6

11.6 3.9 9.4 9.1 12.3

12.4,12.5,12.a

12.a 9.5 9.4, 9.a 11.2 11.6 14.1, 14.7,14.a 17.6

13.2 13.3, 13.a,

13.b 14.3

13.3 4.1, 4,2, 4.3,4.4, 4.5, 4.7,

4.a

13.2, 13.a,13.b 14.36.5

6.4 7.1 8.4

6.4, 6.5 9.1

12.a

6.1, 6.6

6.4 9.a

7.1, 7.b 8.1 9.4

9.1, 9.c 11.6

Goal 11:Sustainablecities &communities

Goal 12:Responsibleconsumption &production

7.1, 7.3 11.1

Goal 6: Cleanwater &sanitation

Goal 7:Affordable &clean energy

Goal 8: Decentwork &economicgrowth

Goal 9:Industry,innovation &infrastructure

Goal 10:Reducedinequalities

Interlinkage between relevant Targets and other SDGs in China

9.4 Resource-efficient and clean technology-based industrial retrofit

6.4 Increase water-use efficiency

7.1 Universal access to energy

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6. Policy recommendations(1) This study employed SDG interlinkage tool for sectoral specific analysis and the results shows that SDGs associated

with company carbon management interplay strongly and beneficially with others SDGs, which provides policy implications for government and business potential for corporate.

(2) In Japan, beside Goal 13 (climate action), strengthened policy of carbon pricing and corresponding corporate carbon strategies are strongly positively related the Goal 8 (decent work and economic growth) as well as Goal 9 (industry innovation and infrastructure).

(3) Corporate carbon engagement in China exhibits some characteristics that differ from those of Japan, specifically in improvements in agricultural productivity and food production systems (Target 2.3 and 2.4), enhancement of universal access to safe drinking water (Target 6.1) and international cooperation on water-and sanitation (Target 6.a), upgraded social, economic and political inclusion of all (Target 10.2) through education and job opportunities (Target 4.3 and 4.4) and equality (Target 10.3) were remarkable, meaning the SDGs associated with the activities of corporate carbon strategies are intermixed with social development. Energy service expansion comes together energy efficiency improvement that may generate potential of business and employment.

(4) How policy on climate change is implemented greatly affects institutional awareness, capacity and technology adoption in industrial processes. Encouraging the private sector to take part in carbon management strategies that go beyond conventional standards and norms will require the government to provide ongoing policy support to improve market functionality of carbon pricing and effectiveness.

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Thank you very much.

Business carbon management and the implications for SDGsBusiness role and SDGsInterest and opportunities for SDGsBusiness process and relevant SDGsClimate change under the SDGs and carbon pricing(1) Corporate carbon management(2) Relevant SDGs to corporate carbon management4. SDGs interlinkage analysis: analytical framework�5. SDGs interlinkage analysis results: (1) JapanInterlinkage between relevant Targets and other SDGs in Japan5. SDGs interlinkage analysis results: (2) ChinaInterlinkage between relevant Targets and other SDGs in China6. Policy recommendationsThank you very much.