Ambition to Action: Three Lessons From Climate Week NYC 2020

This year’s Climate Week NYC looked vastly different from previous years. Instead of gathering in person in a bustling city, we gathered virtually from our own homes and offices from around the world. And while we may have missed out on the usual impromptu colleague introductions and informal chats over coffee, this virtual format enabled a broader, more global discussion, welcoming more international representation all while cutting down on the carbon footprint of bringing everyone together. COVID-19 redefined this year’s format, just as it has catalyzed new ways of working and doing business.

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It’s no surprise that the pandemic and other major events of 2020 played prominently into this year’s discussions because leaders worldwide have learned valuable lessons about how they must respond to short-term emergency events and how they can apply what they’ve learned to long-term risk.

And in a surprising but very welcome announcement at the UN General Assembly, China’s President Xi Jinping pledged that the country will aim to hit peak emissions before 2030 and achieve carbon neutrality by 2060. As the world’s largest source of carbon dioxide emissions, this is a critical pledge for the planet.

As this year’s sponsor of the Hub Live, ENGIE Impact had the pleasure of hosting two executive roundtable sessions for participants in Asia and Europe and also the Americas. Over 30 senior executives from some of the world’s most influential brands and governments gathered to collaborate on how organizations can frame their sustainability initiatives, rethink strategies, and update their business cases to ensure climate action stays at the top of executive agendas.

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The conversations throughout the week made one point abundantly clear: a sustainability agenda is a resilient agenda. Our global report—based on a survey of more than 200 executives—found that 75% of executives believe that successful execution of a sustainability strategy will provide a competitive advantage, but only 30% feel they are successfully doing so today. How do we continue to translate ambition into action? Here are a few key takeaways:

1. Sustainability Must Be at the Core of Every Organization

Sustainability success is not easy. This is a major transformation and requires a cultural shift within the organization. When ENGIE Impact examined why some organizations are more successful than others at implementing a sustainability strategy, we found that those companies were better at embracing the agenda at the C-level, building a business case and engaging their suppliers.

Sustainability transformation must be rooted in the company culture. It must be driven, communicated and championed from the executive level, but the entire company should feel a sense of ownership for it to succeed. Companies with early success have invested in tools to measure emissions and understand risks, engaged with stakeholders, enacted change across the organization, and are willing to take chances to innovate.

• As one example, earlier this year Dell Technologies announced its commitment to The Climate Decade with the company’s most ambitious goals for 2030. Dell actively engages with many different stakeholders to rethink its business model to be more circular, hoping to one day make electronics waste entirely obsolete. This goal involves collaboration not only internally but across the supply chain and even with other industries, and engaging employees to create and submit a business case for new innovations that can advance environmentally sound business practices.

• In Mexico City, sustainability is a top agenda item for the city. In 2019, Chief of Government of Mexico City, Claudia Sheinbaum (who also participated in our Hub Live roundtable session), announced an ambitious environmental sustainability plan in seven areas: greening urban and rural areas, recovering rivers and water bodies, sustainable water management, zero waste, integrated and sustainable mobilities, air quality and creating a solar city. During the COVID-19 crisis, the government collaborated with key transportation stakeholders to plan 130 kilometers of temporary bike infrastructure to alleviate risks of public transportation and facilitate mobility, which also offers a glimpse of what more sustainable mobility in the future could look like.

Most importantly, organizations must work to realign capital investments to Environmental, Social and Corporate Governance (ESG) and bring CFOs and the greater finance organization to the table to deploy it the correct way. This year, the Institutional Investors Group on Climate Change (IIGCC), an investor group managing more than $16 trillion, launched “The Net Zero Investment Framework” to give investors practical guidance on how to decarbonize portfolios and boost investments in solutions to climate change.

2. Your Business Will Be Measured by How You Impact Society

We’ve heard this frequently over the last few months: employees, customers and the financial community are increasingly calling for companies to show action on sustainability. Expectations for companies to prioritize people, communities and the environment are growing. A survey conducted earlier this year by Glassdoor found that 75% of employees ages 18-34 expect their employer to take a stand on important issues, including climate change—more than any other group.

A deliberate and accelerated sustainability strategy—championed by the C-level—empowers employees and connects them to their environment and communities in a meaningful way. Sustainability gives way to healthier, happier communities including job creation, improved air and water quality, and better health.

Over the next decade, organizations must work to reframe their KPIs to align with the UN Sustainable Development Goals. In this way, businesses are working alongside governments and communities to achieve common targets, allowing for greater accountability and transparency while improving the overall health and prosperity of communities and the environment.

This year, we saw great momentum on commitments to carbon neutrality. However, to truly be successful in combating climate change and achieving our collective need to reach 1.5 degrees, we must transition from aiming for neutrality to regenerative. This is defined as a process that restores, renews or revitalizes an organization’s own sources of energy or materials and integrates business needs with the integrity of nature. This is encouraging news that demonstrates how sustainability is becoming strategically integrated not only into a company’s operations but extending into its products and services in a way that benefits communities. And some early adopters have made great strides:

• Walmart leveraged Climate Week NYC 2020 to announce not only its goal to have zero emissions globally by 2040, without carbon offsets, but to also commit to becoming a regenerative company. CEO Doug McMillon shared that Walmart will preserve at least one acre of natural habitat for every acre developed by the company in the U.S., drive adoption of regenerative agriculture practices, sustainable fisheries management, and forest protection and restoration, and partner with its supply chain to source from place-based efforts that help preserve ecosystems and improve supplier livelihoods.
• This past July, Unilever announced €1 billion in new commitments and investments to fight climate change and protect and regenerate nature. The company has committed to halving the GHG footprint of products across the value chain by 2030 as well as Net Zero emissions from all its products by 2039. Unilever also has promised to achieve a deforestation-free supply chain by 2023, empower farmers and smallholders, introduce a pioneering Regenerative Agriculture Code for its suppliers, and implement water stewardship programs in 100 local communities by 2030, among others.

3. Corporations Must Lead Collaboration To Innovate

To accelerate sustainability transformation to meet the goals of the Paris Agreement, we need the businesses who are leading on climate action—with both solutions and capital—to be the “brain trust” for organizations that are further behind. This involves a different mindset because most organizations—especially businesses—are built to be more competitive rather than collaborative. But when it comes to climate action, we need to rethink this mindset and not work in ‘city’ or ‘business’ silos.

Here are some examples of different collaborations and models happening in the market:

• Corporate-Provider: One example of a cross-dimensional partnership is Procter & Gamble’s 50L Home Initiative to address water scarcity. According to WBCSD, 14 of the world’s 20 largest cities are already experiencing water scarcity. In Cape Town, South Africa, in response to a drought that saw three consecutive dry winters, the government required that all four million citizens reduce their water use at home to only 50 liters per person, per day, which resulted in a 60% reduction in consumption. The trick was utilizing technology and business innovation to make 50L “feel” like 500L (the average consumption in some cities) with water reclamation, energy efficiency, and smart fixtures and intelligent devices. A global water crisis cannot be solved by governments or corporations alone. This is where companies, policymakers and communities can all work together to develop and scale innovative products and technologies that will secure access to water.
• Sector Alliance: Since 2018, the Katowice Banks—including international banks BBVA, BNP Paribas, ING, Société Générale and Standard Chartered—have been collaborating to make the Paris Agreement Capital Transition Assessment, or PACTA methodology, applicable to bank lending. During Climate Week NYC 2020, the group announced the release of its first report on the application of this methodology, designed to steer banks’ portfolios towards financing a lower-carbon society. The methodology is one of the first of its kind and is completely open-source, with the goal to share insights and learnings and inspire other banks to use PACTA and contribute further to its development.
• Corporate-NGO: The UN Global Compact recently announced a task force of CFOs who will, over the next 24 months, convene to share ideas, develop new capital investment frameworks, and provide recommendations to CFOs and finance organizations to unlock private capital and create a market for SDG investments.
• Circular / Community Ecosystem: In hard-to-decarbonize sectors, such as heavy industrial parks, it is challenging to build industrial synergies across resources, but innovative circular partnerships—in which the wasted resource of one provider becomes the fuel for another—are emerging over time. Data visualization and systems modeling can identify the hidden potential for value creation and collaboration across market actors. In 2018, at the Port of Dunkirk, local businesses came together to map the energy, water and material streams generated by their local ecosystem. With this transparency, businesses were able to identify strategic synergies and partnerships strengthened by robust business models. By modeling the cost savings and environmental benefits, the business cluster was able to quickly define a symbiotic relationship in which businesses were able to exchange resources, reducing environmental impact at a fraction of the price. These symbiotic partnerships not only secure more localized and resilient resource reserves but also unlock new value streams for participants.

As we progress further into The Climate Decade, more partnerships and new operating standards will emerge, generating more pressure among peer organizations and across sectors that will accelerate sustainability transformation.

Mobilize for Sustainability Transformation

Climate Week NYC 2020 was once again an inspiring and encouraging event. In 2019, public and private leaders who gathered for the event agreed that we needed more deliberate and accelerated momentum from sustainability strategies to actions to respond to climate change. This year, the conversations instantly focused on sharing how hard the real work is of translating intentions into reality. It was evident, from the examples above and others, that organizations have been really working over the last 12 months on putting ambition into action. They came to the table this year with feedback engrained in real experience and will be critical to guiding organizations that are further behind through their challenges.

COVID-19 has shown that governments and businesses can respond quickly to a crisis. Now we have a great opportunity to redefine our planet’s future by setting more ambitious sustainability goals and shortening the timeframe in which we deliver on those commitments. Climate Week NYC 2020 was a moment to come together and reassess the current state of sustainability in The Climate Decade. And while the events of 2020 so far have been unarming and unexpected, they have accelerated the need for deliberate action against climate change.

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