Climate changes hands: how the private sector is leading climate action
Companies are taking climate matters into their own hands. While last week President Trump stood firm in the administration’s decision to withdraw from the Paris climate agreement at the G20 meeting in Argentina, we went to Miami where representatives from both US and global companies met at the Companies vs Climate Change Conference (CVCC). The conference has two events a year, one in Europe and one in the United States. The majority of the companies present have signed the “We Are Still In” pledge which states that they will continue to support climate action to meet the Paris Agreement. There was a variety of companies present, from manufacturing to airlines and cruise lines.
When it comes to revamping our economy to be more sustainable, the players are varied and the plays range from simple to complex. Thus, the conference consisted of a broad range of stakeholders within sustainability in the private sector. Managers, directors and chief officers of sustainability (CSOs) of Fortune 1000 companies were present. Present too were a variety of sustainability consultants, sustainability guidance bodies, marketers, and of course, carbon offset aggregators.
Each of these groups creates an ecosystem of collaborators who may just lead the charge on redefining what it means to do business in an economy where climate can no longer be ignored as part of the equation. Consumers are demanding sustainability as part of the businesses they choose to support, and this has lead to the recent rise in the number of “director of sustainability” and CSOs hired by corporations.
United we stand, divided we fall.
The CVCC conference set a forum of open communication and collaboration. It was a united front on climate change. United Airlines took the stage on Wednesday, then Alaska Airlines on Thursday. Virgin Voyages, which announced plans for a new terminal at PortMiami just hours before, was also there to hear from and connect with Royal Caribbean Cruise Line to discuss how the two companies could inform each other on sustainability leadership in the cruise industry.
And this type of open, non-competitive communication between big businesses, aka big emitters, is vital. In order for the private sector to make significant headway on climate change, it needs to functions as an ecosystem of collaborators.
“We believe that when it comes to energy and environment, there is no competition,” said Royal Caribbean’s Director of Energy Management Anshul Tuteja.
During a time when the rift between values of nationalism and globalism have torn apart friends, families, and nations, and when the existential crisis of climate change is such a divisive issue politically and a consensus on climate action seems nearly impossible, leadership that inspires the combining of forces is needed more than ever. And based on what we saw at CVCC, it might just be that the leadership we’re looking for lies within the hands of the private sector, and in our hands as consumers to demand environmental excellence from these companies.
Jason Youner founded Companies VS Climate Change with support from TD Bank, in order to bring together companies to communicate and catalyze continued climate progress.
“We’re here to meet each other, teach each other, and inspire each other.” — Jason Youner, Founder & CEO
The conference brought together an impressive group of sustainability leaders who were not only the right people to bring to the stage because of their titles and roles but also because of their quality public speaking skills. There were no monotone speakers. No one using the stage to boost their own ego. Speakers were there to have a conversation with the audience and to share what they’ve learned on the journey of improving the sustainability and integrating climate solutions into their businesses.
The urgency is real.
The conference couldn’t have been more well-timed. Just days before, the Trump Administration released a report on Black Friday that outlines the great impact that climate change will have on all aspects of our lives, including economy, communities, agriculture, tourism, water, and health. This report as the IPCC report released a few weeks were mentioned countless times during the conference. If I had a dollar for every time I heard one of these reports mentioned during the event…
Below are some of our key takeaways from the conference.
First, you need a goal & a plan
What we’re seeing right now is new. Companies are voluntarily signing up to meet sustainability targets and are not waiting for politicians to tell them to. And each company has to discover its own path forward. Thus, the first step is for companies to set sustainability targets. Next, companies need to have a plan for measuring progress and meeting their target on time.
You can’t manage what you can’t measure.
Measuring and monitoring is key to informing strategy of where a business should focus efforts in order to meet its sustainability goals. Companies are therefore conducting what are called materiality assessments in order to determine what should be reported and where opportunities lie. Because every organization is different, these assessments are, again, not one size fits all. Hence, the large number of sustainability consultants present at the conference. These third parties play a key role in helping businesses keep track of progress and meeting their end goals.
The first wave of goals focuses on reduction and cost savings
Most, if not all, of these businesses, have set sustainability goals. Most take the form of emissions reductions. For example, Ingersoll Rand, an industrial company that produces HVAC systems, have set goals for emissions reductions in both their operations (35% reduction by 2020) as well as the lifespan of the product-use (50% reduction by 2020). Ingersoll Rand is a great example of companies taking things a step further. They set sustainability goals not just for their operations, but also for the product-use, which is 20 times greater than their operations and production. The lazy days of greenwashing are coming to an end as we see large companies such as this taking it upon themselves to restructure and redesign their product offerings and providing measurable proof of their decreased footprint.
Goals for emissions reductions are some of the lowest hanging fruit when it comes to giving your company a sustainability make-over, because you can take direct action to address emissions reductions by using less energy, purchasing renewable energy, increasing the energy efficiency of operations and offices, etc. These type of reductions in scope 1 and 2 emissions can typically yield to greater cost savings, i.e. use less fuel, pay for less fuel; use less electricity, pay for less electricity.
And there’s more to the cost savings equation than just energy. Reducing energy can also directly lead to water savings, which also leads to reduced costs. Water is highly localized, and how companies should address water conservation is not one size fits all. Emilio Tenuta of EcoLab announced the new Water Risk Monetizer that businesses can use in order to better understand the tangible and intangible value of water.
Don’t strategize in a vacuum
Business is business. There has to be a business value to anything a company does. Whereas before companies were making decisions based on profitability, now with the awareness of social and environmental values on corporate success, the concept of a triple bottom line is incorporated more and more in business planning. It is up to sustainability managers to work either independently or with the help of consultants to discover and clearly define where conventional economic opportunities and sustainability initiatives overlap.
President of DSM, Hugh Welsh, addressed the room full of directors of sustainability and stated that they must put forward strategies with clearly defined benefits business. Those who can find these opportunities and harness the value of sustainability to grow the value of companies are those who will lead the next generation of business leaders.
“Climate change is going to become a proxy war on capitalism… I really believe that the future CEOs are going to come out of the sustainability groups.” — Hugh Welsh.
What’s next: Carbon “positive”
One of the speakers (who requested not to be quoted on this) was asked “What’s next?” and responded that the only way to make significant action on climate change is to address carbon removal and that they would soon push their company to consider how it can be “carbon positive”. Carbon positive means that the company would be responsible for drawing down more carbon than it is emitting.
The fact that large companies are even considering a future of paying down their carbon debt is exactly why Nori is doing what we’re doing. We want to enable these businesses to reach not just their carbon neutral goals, but future goals of carbon positivity. A long-term solution to climate change must include scaling up carbon removal to be greater than the total carbon emitted in the atmosphere.
Disclaimer: as an engineer by study, I personally cringe at this term. Carbon “positive” was created as an alternative to the idea of “carbon negative” which people have said has a “negative” connotation. I, on the other hand, think “carbon positive” is silly and makes no mathematical sense and just gets under my skin.