How do we restart stalled corporate climate action?
This article is sponsored by Climate Impact Partners.
We know this is a critical decade for the climate. In the next seven years, we must halve global emissions to stand any chance of keeping global warming within 1.5 degrees Celsius and lowering the risk of runaway climate change. We also know that government commitments alone will not get us there; in fact, they would put us on track for 2.5 degrees of warming. It is this gap that we need companies to plug — investing in scalable solutions that will drastically cut emissions.
But corporate climate ambition among the world’s largest companies is waning. At a time when we need to see urgent action and raised ambitions, companies are kicking the climate can down the road, sending it decades beyond the critical 2030 Paris Agreement goal.
Our latest research into the climate commitments of the Fortune Global 500 found that almost 60 percent of the world’s largest companies have not delivered or set a meaningful 2030 climate goal, despite being responsible for 15 percent of global emissions, and those that have made commitments in the last year are more likely to target 2050 milestones.
Perhaps companies are unsure of where to begin or are fearful of potential criticism, but in the wake of the IPCC’s final warning on climate, we need to change this trajectory immediately.
We’ve had the final warning, so what are the solutions?
There is no silver bullet to tackle climate change; it requires a multifaceted approach to ensure that solutions address the complexities arising from the crisis. However, looking beyond the “final warning” message, the IPCC has highlighted a way forward and the solutions, available today, that will have the biggest impact on reducing emissions. It is time for rapid implementation and investment to scale these solutions with the urgency required.
Jumping out so clearly from the IPCC’s report is that we need to focus on growing the tools that both reduce or avoid emissions, whilst providing wider benefits — including conserving and restoring biodiversity, providing health benefits, supporting sustainable development and working with the communities most affected by climate change yet least responsible for it. It’s been calculated that two of the most impactful solutions to rapidly reduce emissions by 2030 include stopping the destruction of forests and other wild places, and restoring degraded forests.
While internal carbon reductions remain a non-negotiable, channelling private sector finance to carbon reduction projects today is one solution that will drive the transition to a low-carbon economy whilst providing other benefits — from forest conservation projects working with local communities to provide training on sustainable land management and biodiversity conservation, to developing small-scale solar power solutions that assist businesses and households with heating and lighting.
Investing profits in the planet
If the Fortune Global 500 committed just 1.5 percent of their $3.1 trillion profits — $33.5 billion — to climate action through the voluntary carbon market, the impact would be substantial. Exemplifying this, if these companies supported a portfolio of strategies including forest conservation, reforestation, clean cooking and micro-renewables, the $33.5 billion could:
- Reduce 2.6-plus billion tonnes of carbon emissions, the annual emissions of India.
- Improve 1.1 billion lives, the populations of Europe and the U.S. combined.
- Protect 99-plus million acres of forest, equivalent to the size of Japan.
Even if the most profitable company alone committed 1.5 percent of its profits it could improve 47.5 million lives, reduce 124-plus million tonnes of carbon emissions and protect 5 million acres of forests.
One-point-five percent is a fraction of the average amount spent on other critical areas. Some companies, for example, spend 12 percent on research and development. Ultimately, the cost of inaction will be greater financially, reputationally, competitively and environmentally.
These solutions are not a panacea and alone they will not get us to net zero, but collectively they could help keep us on track toward our 1.5 degrees Celsius goal, deliver meaningful results and encourage other organizations to step up — galvanizing the action that we need to see.
Leaving a legacy
Leaders often talk of the desire to leave a legacy. What greater legacy could there be than ensuring the future of the planet? This is the last time we will hear from the IPCC while we still have a chance to limit global temperature rises to 1.5C. Solutions are available today: Explore them, learn from your peers, talk to experts and commit to action. This is not the dress rehearsal; it is time to act.