Editing IPCC:AR6/WGIII/Chapter-5 (section)

=== 5.4.3 Business and Corporate Drivers ===

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Businesses and corporate organisations play a key role in the mitigation of global warming, through their own commitments to zero-carbon footprints ( [[#Mendiluce--2021|Mendiluce 2021]] ), decisions to invest in researching and implementing new energy technologies and energy-efficient measures, and the supply-side interaction with changing consumer preferences and behaviours, such as via marketing. Business models and strategies work both as a barrier to and an accelerator of decarbonisation. Still existing locked-in infrastructures and business models advantages fossil fuel industry over renewable and energy efficient end use industry ( [[#Klitkou--2015|Klitkou et al. 2015]] ). The fossil fuel energy generation and delivery system therefore epitomises a barrier to the acceptance and implementation of new and cleaner renewable energy technologies ( [[#Kariuki--2018|Kariuki 2018]] ). A good number of corporate agents have attempted to derail climate change mitigation by targeted lobbying and doubt-inducing media strategies ( [[#Oreskes--2011|Oreskes and Conway 2011]] ). A number of corporations that are involved in both upstream and downstream supply chains of fossil fuel companies make up the majority of organisations opposed to climate action ( [[#Dunlap--2015|Dunlap and McCright 2015]] ; [[#Brulle--2019|Brulle 2019]] ; [[#Cory--2021|Cory et al. 2021]] ). Corporate advertisement and brand-building strategies also attempt to deflect corporate responsibility to individuals, and/or to appropriate climate care sentiments in their own brand building; climate change mitigation is uniquely framed through choice of products and consumption, avoiding the notion of the political collective action sphere ( [[#Doyle--2011|Doyle 2011]] ; [[#Doyle--2019|Doyle et al. 2019]] ).

Business and corporations are also agents of change towards decarbonisation, as demonstrated in the case of PV and battery electric cars ( [[#Teece--2018|Teece 2018]] ). Beyond new low-carbon technologies, strong sustainability business models are characterised by identifying nature as the primary stakeholder, strong local anchorage, the creation of diversified income sources, and deliberate limitations on economic growth ( [[#Brozovic--2019|Brozovic 2019]] ). However, such business models are difficult to maintain if generally traditional business models, which require short-term accounting, prevail.

Liability of fossil fuel business models and insurance against climate damages are key concerns of corporations and business. Limitations and regulation on GHG emissions will compel reductions in demand for fossil fuel companies’ products ( [[#Porter--2006|Porter and Kramer 2006]] ). According to a report by the Advisory Scientific Committee of the European Systemic Risk Board, insurance industries are very likely to incur losses due to liability risks ( [[#ESRB--2016|ESRB 2016]] ). The divestment movement adds additional pressure on fossil fuel related investments ( [[#Braungardt--2019|Braungardt et al. 2019]] ), even though fossil fuel financing remains resilient ( [[#Curran--2020|Curran 2020]] ). Companies, businesses and organisations, especially those in the carbon-intensive energy sector, might face liability claims for their contribution to climate change. A late transition to a low-carbon economy would exacerbate the physical costs of climate change on governments, businesses and corporations ( [[#ESRB--2016|ESRB 2016]] ).

Despite the seemingly positive roles that businesses and corporate organisations tend to play towards sustainable transitions, there is a need to highlight the dynamic relationship between sustainable and unsustainable trends ( [[#Antal--2020|Antal et al. 2020]] ), or example, the production of sport utility vehicles (SUVs) in the automobile market at the same time that car manufacturers are producing electric vehicles. An analysis of the role of consumers as drivers of unsustainability for businesses and corporate organisations is very important here as this trend will offset the sustainability progress being made by these businesses and organisations ( [[#Antal--2020|Antal et al. 2020]] ).

Professional actors, such as building managers, landlords, energy efficiency advisers, technology installers and car dealers, influence patterns of mobility and energy consumption ( [[#Shove--2003|Shove 2003]] ) by acting as ‘middle actors’ ( [[#Janda--2013|Janda and Parag 2013]] ; [[#Parag--2014|Parag and Janda 2014]] ) or intermediaries in the provision of building or mobility services ( [[#Grandclément--2015|Grandclément et al. 2015]] ; [[#De%20Rubens--2018|De Rubens et al. 2018]] ). Middle actors can bring about change in several different directions, be it, upstream, downstream or sideways. They can redefine professional ethics around sustainability issues, and, as influencers on the process of diffusion of innovations ( [[#Rogers--2003|Rogers 2003]] ), professionals can enable or obstruct improvements in efficient service provision or shifts towards low-carbon technologies (e.g., air and ground source heat pumps, solar hot water, underfloor heating, programmable thermostats, and mechanical ventilation with heat recovery) and mobility technologies (e.g., electric vehicles).

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