Biden victory gives new impetus to engagement on climate change
Ben Cooper assesses the impact of Joe Biden's election victory in the US on drinks companies' efforts to address climate change.
t's rather poignant that the day after the presidential election also marked the official withdrawal of the US from the 2015 Paris climate accord. The coincidence would have been immeasurably more poignant, however, had President Trump been re-elected.
As it turned out, by the end of the day, Joe Biden was able not only to begin celebrating victory, but also to announce he would make good on his pledge to re-join the accord as soon as possible by doing so on 20 January – the day of his inauguration.
For the same reasons multinational CEOs had petitioned Trump not to withdraw the US from the climate accord four years earlier, Biden's early announcement on Paris will be welcomed by business leaders, not only in the US but across the world.
A return from French leave
In its effusive endorsement of the move, We Mean Business, a coalition bringing together seven NGOs driving corporate engagement on climate change with the companies that have signed up to their initiatives, underlines why the US re-joining the Paris treaty is as important to corporations as it is to governments.
"The Paris framework and ambitious national targets provide the clarity and confidence that companies need to make long-term investments that reduce emissions, drive innovation, competitiveness, risk management, and growth – while raising the confidence of investors, customers and employees alike," the coalition said.
Among the 1,394 companies that have joined the We Mean Business coalition are around 30 drinks manufacturers, including category leaders such as The Coca-Cola Co, PepsiCo, Anheuser-Busch InBev, Asahi, Carlsberg, Heineken, Diageo, Pernod Ricard, and Concha y Toro, as well food companies with substantial beverage interests, including Nestlé, Danone, and Mars.
For leading drinks companies to achieve the ambitious goals they have set, raise their aspirations further, or foster greater engagement by less progressive peers, the Paris accord will have to function as it was intended.
In spite of the disruption Trump has caused to both domestic and global efforts to address climate change, leading beverage companies have continued to commit to initiatives such as 'RE100', the 100% renewable energy initiative led by NGOs The Climate Group and CDP, and the 'Science-Based Targets Initiative' (SBTI), which certifies that a company's emissions targets are aligned with the Paris climate goals.
As yet, however, no drinks company has joined the elite group of companies committed to 'Net-Zero by 2050', the SBTI's most ambitious programme.
For leading drinks companies to achieve the ambitious goals they have set, raise their aspirations further, or foster greater engagement by less progressive peers, the Paris accord will have to function as it was intended. This looked extremely challenging without the committed participation of the world's most powerful economy.
Making up lost ground
Encouragingly, there are signs that President Biden intends not simply to resume where the Obama administration left off but to step up US leadership in the UN's climate change efforts, encouraging countries to increase emissions reduction targets while targeting "climate outlaws" that are falling short of their commitments.
Climate change was reported to have featured prominently in several of the phone calls Biden made to heads of government in the days following the election. The contrast with the Trump administration, which had continued to send delegates to UN climate conferences to advocate the continued use of fossil fuels, could not be more marked.
The potential for the creation of more enabling regulatory and policy environments for drinks companies across more countries has increased significantly, as have the prospects for meaningful progress at the crucial COP 26 climate conference, scheduled to take place in the UK this time next year.
Biden is also aiming to go well beyond the aspirations of the Obama administration with regard to US climate policy specifically. To recover the ground lost during the last four years would be a hefty enough challenge in itself, particularly given the revelation during the period that the climate crisis is significantly graver than was previously thought.
In that context, Biden's goal of reaching net-zero carbon emissions by 2050 is extremely ambitious. Any climate-related legislation negotiated on a bipartisan basis would be very unlikely to offer the sort of emissions reductions Biden is seeking.
It is expected, then, that he will be largely relying on achieving regulatory reform through issuing executive orders, which will duly face legal challenge.
As President Trump rolled back as many as 100 environmental regulations during his four years in office, Biden is expected to focus on five key areas where the most significant emissions reductions are likely to be achieved.
Climate policy reboot
For drinks companies operating in the US, the most relevant of these is the promotion of clean power. Biden is aiming to set the US on a path to carbon-free electricity by 2035. Such a trajectory would bolster the emissions reduction aims of drinks firms, but the political and legal obstacles that lie in Biden's way are extremely daunting.
That said, more optimistic observers believe increased awareness of climate change and popular support for addressing and mitigating its impacts may give Biden a better chance than has been suggested of gaining Congressional support for meaningful new environmental legislation, in spite of the divided government.
In his campaign, Biden consistently characterised climate change as one of four crises facing the nation, along with the coronavirus pandemic, the weakened economy, and racial justice. However, it didn't appear to be that prominent an issue in the campaign. Indeed, a survey by the Pew Research Center in August revealed it was not even among the top ten voter concerns, ranking 11th behind issues such as the economy, healthcare, and the pandemic.
The incoming president's determination to re-energise and accelerate efforts to address climate change, both in the US and the wider world, should lead to a more favourable environment for drinks companies to step up their own actions.
The fact Biden made the issue a key plank in his campaign nevertheless is testament to his commitment but could also suggest he anticipates greater ongoing public support for regulatory or legislative measures in relation to climate change than may have been evident during the campaign.
Interestingly, a previous Pew survey in 2019 suggested 67% of Americans believe the federal government is not doing enough to protect the environment or to reduce the impact of climate change.
Crucially, from January, it will not be a case of one of the presidential candidates talking about climate change far more than the other, but the President setting out the threat it represents and the remedies he believes are necessary to address it.
The incoming president's determination to re-energise and accelerate efforts to address climate change, both in the US and the wider world, should lead to a more favourable environment for drinks companies to step up their own actions. After the disruption and chaos of the last four years, any opportunity to make up lost ground must be eagerly grasped.