A low carbon economy (LCE) is an economy powered by low carbon energy where a business' mix of the goods and services it delivers is increasingly 'green'. That is, the goods and services they sell are those which, through their use, enable the adaptation, mitigation and/or remediation of the impacts of climate change, resource depletion and/or environmental erosion.
Climate change threatens the basic necessities of human life all around the world - access to water, food production, health, land, biodiversity, peace and stability. Climate change is an unprecedented issue, unique to our civilisation, and action is needed to prevent dangerous anthropogenic (human induced) interference with the climate system.
Without a rapid transition to the low carbon economy, continued emissions of greenhouse gases (GHG) will cause further planetary warming and irreversible damage to ecosystems and society. Buoyed by political agreement in at COP 21 in Paris at the end of 2015, thousands of businesses around the world are designing and implementing their LCE transition strategies, supported by forward thinking investors.
Setting and achieving emissions reductions (see R100's question on reducing GHG emissions), greening the products and services mix, and engaging suppliers and other stakeholders are becoming necessary to enable the LCE transition. Decarbonisation of the energy supply is another powerful tool at the disposal of businesses with an increasing number switching partly or wholly to renewable power.
This question currently relies on FTSE Russell’s defined ‘LCE’ products, goods and services, which are split into eight sections and 60 sub-sections (see glossary). While some businesses may not feel able to participate in any of them and thus that they are unfairly discriminated against, the demand from the investment community to be able to allocate greater funds to the LCE and its reliance on hard, actionable financial data in order to do so creates the rationale for use of these definitions. Whether or not a company markets LCE products, goods and services thus defined, it may nonetheless also contribute to and be part of the low carbon economy by reducing its GHG emissions, using energy from renewable sources, and by developing 2-degree transition plans detailing how it makes informed and strategic decisions in respect of its investments, operations, innovations, collaborations and more. Responding to this question will enable it to describe such activities.