Before moving my family from Paris to Boston last summer, I was curious about the different attitudes on climate change that I might encounter in the United States—especially given the planned withdrawal from the Paris Climate Accord and the E.P.A.’s proposed repeal of the Clean Power Plan. Like many in our industry, I questioned the real consequences of these announcements. Would carbon reduction remain a priority for leading businesses? Would the lack of federal commitment slow the pace of corporate sustainability efforts?
After monitoring corporate response over the past few months, the answer was clear: rather than being dissuaded, top companies are more committed than ever to reducing greenhouse gas (GHG) emissions and taking bold action on climate change and sustainability. While previous corporate talk could have been read as “greenwashing,” the landscape has evolved—driving stakeholders to look for truly binding commitments and quantifiable results. In fact, the CDP’s global analysis found that 89 percent of the top companies surveyed reported emissions reductions targets in 2017, with more than two thirds of respondents setting targets to at least 2020.
Sustainability is no longer the vision of a revolutionary world without growth requiring all established processes and operations to be changed. Top business leaders are acting forcefully, promoting financially sound projects and pushing their organizations to achieve more growth with less resources. The most important question that remains is: are we going fast enough?
At the highest level, participation in the We Mean Business coalition—influential businesses making ambitious commitments to reduce their carbon footprint—has skyrocketed, growing from just over 500 companies in June to 623 today. This roster spans through every industry and vertical, from hospitality to food service to manufacturing, and has yielded some truly impressive actions. Many participating businesses have made commitments above and beyond those pledged to We Mean Business. Mars, the candy giant behind products such as Snickers and M&Ms, just announced a plan to reduce its carbon footprint by more than 60 percent by 2050—an investment of nearly $1 billion. In April, Walmart committed to reducing supply chain CO2 emissions by one billion tons by 2030. Corporate climate engagement has transitioned from a “feel good” activity to a crucial business strategy in an increasingly competitive marketplace where major investors seek to make their portfolios resilient to climate risks.
These efforts speak to the importance of sustainability far beyond federal regulations. Businesses understand that the new energy economy is just around the corner, and reducing emissions and energy costs now is vital to their future stability. As the energy landscape has matured, industry leaders have moved from adopting the low-hanging fruit of building retrofits to embracing on-site solar projects and energy sourcing and procurement. Battery storage projects, installation of EV chargers and optimizing resource consumption through zero waste initiatives are now on the list. Moving forward, we’re likely to see the following components drive corporate sustainability programs:
- Science-based targets. Using verified data and sophisticated analytics, companies can determine what actions are required to reduce their carbon emissions sufficiently and keep the global temperature increase below 2°C. Setting a science-based target reduces regulatory uncertainty, strengthens stakeholder confidence and improves the company’s profitability and competitiveness—which is why more than 300 organizations have currently done so.
- Scope 3 reductions. While most top companies understand how to address Scope 1 (direct GHG) and Scope 2 (energy indirect GHG) carbon emissions, Scope 3 will be increasingly important in the new energy economy. Scope 3, or other indirect GHG, emissions are defined as “emissions that are a consequence of the operations of an organization, but are not directly owned or controlled by the organization.” These sources may include employee commuting, business travel, supply chain production, and emissions from products sold. The ability to influence the supply chain and further quantify Scope 3 emissions will be an important differentiator in the not-so-distant future.
- Alternative energy investment. Businesses are increasingly motivated to make their biggest emission sources greener. Integrating distributed energy resources (DERs), which includes both renewable sources, such as wind and solar, and smaller power sources like batteries, into corporate procurement strategies remains a hot topic. Purchasing Renewable Energy Certificates (RECs) or green tags can further offset electrical usage. To date, 111 companies have publicly set individual targets to procure 100 percent of their electricity from renewable sources under the RE100 initiative, a collaborative program from We Mean Business.
- Corporate responsibility. For sustainability programs to succeed, they must resonate at every level of a business. A holistic approach to corporate responsibility, rather than a series of siloed activities, maximizes impact—addressing everything from on-site waste reduction to incentives for greener transportation. These efforts also require strong employee engagement, so that each member of the organization understands his or her role in conserving resources. Companies that take corporate responsibility seriously must embrace sustainability at the highest level as part of their purpose, values and day-to-day actions.
I’m genuinely inspired by the business world’s commitment to a low-carbon economy. The global momentum sparked by the Paris Climate Accord is more than a political or diplomatic success: it is about businesses truly deciding to act and combat climate change. Those stepping up to lead the change today are those who give their company the best chance to grow in a sustainable world.
- Video: Corporate Climate Action: The Business Benefits to Forging Ahead
- Blog Post: Finance… Ready for the Next Wave of Climate Action?
- Recorded Webinar: Achieving Waste Diversion through the Art & Science of Behavioral Change
- eBook: Five Key Considerations for Integrating Renewables into Your Procurement Strategy