From the cities of Japan to the arctic corners of Sweden, places that are not normally known for oppressive heat have recently reported record-breaking high temperatures. California just experienced the largest wildfire in its history, fueled by hotter, drier weather. While no single weather event can be attributed directly to climate change, these are two of many signs that our climate is changing. It’s a great time for companies to consider how they can step up their response.
Back in March 2017, I recommended high-priority actions that companies should take to fight climate change. Now, ahead of next month's Global Climate Action Summit in California, I offer an updated list of five actions that signal leadership.
1. Be transparent.
All major companies should measure and publicly disclose their greenhouse gas emissions. Thousands of companies already do so, but it bears repeating because some companies, including some with otherwise strong reputations on sustainability, are holding out on the basis that action is more important than words (or in this case, numbers). If a company with a strong reputation does not report, those with weak reputations will follow suit. Transparency provides climate advocates with a crucial frame of reference for what is possible and where improvements need to be made. Yes, emissions accounting and disclosure take some staff hours, but it’s an essential duty for climate-conscious companies. If you are serious about climate change, you have an obligation to society to support this business-wide initiative.
2. Set a science-based target.
Over four hundred and sixty major companies have committed to setting greenhouse gas emissions targets in line with the global goal to keep warming to below 2 degrees C (3.6 degrees F), known as “science-based targets.” The initiative is accelerating, and we expect more companies to get on board as science-based target-setting inches towards expected practice.
If your company hasn’t already committed, now is the moment. Anand Mahindra, chairman and CEO of Mahindra Group, challenged business to reach a goal of 500 companies committed by the Global Climate Action Summit, and we expect the meeting to be a platform for many companies to announce bold new ambitions. If you reported to CDP that you intend to set a science-based target, do it now. Be a leader among the first 500.
Looking further ahead, early movers are exploring a broader approach to science-based sustainability targets, applying the concept to additional resource categories such as water and land. Progress on a target for emissions now will give you a head start when companies are called on to set science-based targets for all major areas of environmental impact.
3. Put a price on carbon (or ask your government to do it).
An internal carbon price is a financial mechanism that favors and helps catalyze the transition to low-carbon business models. We recently surveyed 27 Indian companies on how they priced carbon and published a helpful primer which outlines four approaches: shadow pricing, internal carbon tax, internal cap and trade and implicit carbon price.
Another option: Voice your support for carbon tax legislation. Today, 45 national and 25 subnational jurisdictions have implemented or scheduled for implementation a carbon pricing initiative. American companies have a unique opportunity to support a carbon tax that was proposed by Rep. Carlos Curbelo (R-Fla.) last month.
4. Advocate for win-win public policies.
Countries and companies are racing to outpace the most damaging and disruptive effects of climate change. But they will need to work together to go further, faster. When businesses set ambitious, science-based greenhouse gas (GHG) targets, governments have more political support to pass ambitious climate policies. When governments set effective, clear policies that favor innovations to reduce GHG emissions, businesses have greater certainty and incentives to invest. These are opportunities to create “ambition loops” that fast-track clean, low-carbon economic growth.
We’ve teamed up with We Mean Business Coalition and UN Global Compact (UNGC) on new research that identifies where alignment between public and private sector goals has strengthened these powerful cycles. This research, to be published later this year, will be essential reading for any executive who wants to practice responsible (and smart) policy engagement in a post-Paris Agreement world. Until then, review the 2018 Climate Action Playbook that we published with UNGC late last year for practical policy engagement strategies.
5. Use your brand.
As I’ve argued before, companies have incredible power of public persuasion through their branding and marketing activities. They can also leverage their brand in private conversations with policymakers, investors, suppliers, customers and employees. Speaking out publicly and privately in favor of climate action can feed momentum behind systemic change and contribute to a culture that values the environment. That’s why Sustainable Brands adopted “system-wide brand influence” as one of five key characteristics of its corporate sustainability roadmap.
How does your company measure up against this climate leadership checklist? Now is the time to take stock and devise a plan for raising your ambition. As the recent series of weather extremes reminds us, we must act quickly and work together to protect our climate.