A few ideas for how companies can help make 2017 better and brighter for all.
It is that time of year again where we look back at the year gone by and collectively resolve to do better in the year ahead. And when it comes to corporate climate action, 2016 had indeed been a milestone year. The Paris Agreement which was ratified this year sent a clear message: we need to transition to a low-carbon economy and do what it takes to keep global temperature rise well below 2°C. Support by US businesses was instrumental in reaching the agreement, and will be critical to implementing it.
Much work lies ahead to achieve the long-term vision of a low carbon economy that stimulates clean energy growth and builds the resilience of poor and vulnerable communities who are most impacted by climate change. Now more than ever, business leadership is pivotal in achieving the ambitious goals set out in the Paris agreement.
While the incoming president of the United States and some of his key appointees have questioned the need for climate action and the reality of well-established climate science, we know that climate change is already a fact of life for thousands of communities across the world – especially the poor who are bearing the brunt of the impacts from more severe storms, intense droughts and unpredictable weather.
Many US companies already recognize the business case for investing in clean energy and climate action. Several food and beverage companies, for instance, recognize that extreme weather is threatening food supply chains and food security around the world, and last year, in the run up to Paris, the CEOs of 14 leading US food companies came together to pledge to accelerate business action on climate change and urged governments to do the same
So here are three resolutions US businesses can make to further accelerate climate action in 2017.
- Disclose how you measure and manage climate risks: Measurement and transparency are where meaningful climate action starts, and is an important lever in speeding the transition to a resilient, low-carbon economy. Companies need to not only disclose how they are measuring and managing their carbon footprints but also the financial risks associated with climate change for their business. One of the most significant, and perhaps most misunderstood, risks that companies face today relates to the expected transition to a low-carbon economy. For example, oil and gas companies need to disclose how current business strategies reflect the changing nature of demand, emerging technologies and policy interventions which will impact the sector. Earlier this week, the Task Force on Climate-related Financial Disclosures (TCFD), which was established by request of the G20, released recommendations for helping businesses disclose climate-related financial risks. With consistent disclosure, both the business and investor community will be able to make more informed decisions to take steps to reduce their emissions and create greater business resilience.
- Set long-term targets guided by science: While an increasing number of companies are setting greenhouse gas (GHG) reduction targets, most of these targets are not in line with the level of effort needed to keep temperatures below 2°C . The most recent GHG data from CDP indicates that if the companies in the sample were to achieve their current targets, they would still reach just a quarter of the emissions reductions needed. The good news is that many companies are stepping up with ambitious long-term GHG reduction goals guided by science. Last year, after more than 200,000 Oxfam supporters urged the world’s biggest food and beverage companies to do more on climate, General Mills and Kellogg announced science-based targets to cut emissions across their supply chains. Just recently, Pepsico joined the list of companies with science-based targets and announced a goal to reduce absolute GHG emissions by 20 percent by 2025.
- Speak up in support of ambitious climate action: Companies must use their voice to shape responsible climate policy and ask governments to meet the emissions reduction targets and provide the financing needed to help vulnerable countries mitigate and adapt to climate change. Last month, 365 companies, including General Mills, Kellogg, Mars and Mondelez signed an open letter urging President-elect Donald Trump not to back out of the Paris climate agreement. Companies that have committed to addressing climate change must continue to urge the incoming administration to follow through on US commitments to combat it as well.
Over the coming months and years, it will take continued business leadership to ensure that the US stays on track on delivering on the promise of Paris. We will only succeed if we work together.