The 2020s are the decisive decade to combat climate change. Appropriately, this year’s Climate Week focused on mobilizing businesses, governments and organizations to accelerate the decarbonization transition. Approximately 18% of Global Fortune 500 companies have committed to becoming Net Zero and over 1,000 companies have committed to science-based targets. Momentum has never been stronger.
As the returning sponsor of The Hub Live, ENGIE Impact co-produced three C-level workshops for participants from Asia, Europe and the Americas. Over 34 senior executives from some of the world’s most influential brands, governments and non-profits gathered to discuss three main topics:
The conversations were dynamic, motivating and inspiring – here are a few of our key takeaways from each of the workshops:
Leaders from business, policy, civil society and finance came together to discuss what good short-term action looks like, what meaningful long-term pathway plans must include and how different stakeholder groups can work together to create an environment where businesses can fulfil their Net Zero potential. Here are the common refrains we heard from the group:
Catalyzing Business Interests
We can’t regulate our way out of the climate challenge, but a conducive regulatory context remains necessary to catalyze the business sector to capture the opportunities of decarbonization.
Adopting a Business Timeframe
2030 is at the edge of the usual corporate planning horizon (6-8 years) and can serve as a critical milestone year to help further embed climate in managerial decisions.
Addressing Process Heat
One of the biggest challenges for the energy sector is decarbonizing process heat. This is both a technological and a trust challenge. Particularly in the U.S., “green gas” raises significant distrust towards utilities and energy companies.
Activating Small to Medium Sized Suppliers
Incentivizing, onboarding, and building the capabilities of small to medium sized suppliers is critical for long term decarbonization of supply chains. However, the process is time and resource intensive, and raises a challenge of scalability.
Acting on supply chains despite data limitations
At the heart of supply chain decarbonization is a data challenge which must be addressed through better and simpler reporting standards and guidelines. At the same time companies must find creative ways to engage supply chains even in the case of incomplete or unreliable data.
Earning the right to decarbonize disadvantaged communities
Public and private sector actors must account for the cumulative impacts of the past to gain the support of disadvantaged communities for decarbonization actions.
Maintaining talent pools in traditional industries
Top talent is increasingly attracted to companies with strong climate missions. Yet talented workers are also needed in traditional industries to speed the pace of change.
There are clear parallels between managing carbon and managing cash: accounting protocols, communication to stakeholders, setting targets, building forecasts and tracking progress. But until recently, carbon has not faced the same level of scrutiny, economic incentives or regulation. Here’s what we heard from a group of global leaders when we asked them about the processes, risks and governance around managing carbon like their cashflow.
Precision is getting in the way of implementation
Accuracy shouldn’t get in the way of companies implementing solutions to manage carbon emissions. Estimation of carbon data is sufficient for setting preliminary management strategies.
Report for action and not solely for transparency
Transparency through compliance reporting (e.g. CDP) into a company’s carbon emissions is not enough. Reporting should be done frequently and leveraged as a tool for companies to pivot their strategy, provide visibility into their progress and integrating insights into their business roadmap.
An ecosystem of tools is key to managing carbon proactively
Disconnected tools and technology are major challenges for businesses. The ability to reference an ecosystem of connected tools and automate your carbon accounting & reporting can enable you to manage carbon as efficiently as your cash.
Tying incentives to carbon management
To help achieve carbon emission goals companies should integrate carbon management across the organization. Making departments accountable for their carbon emissions budget or having an internal carbon price are just a couple examples sustainability leaders shared.
78% of organizations reporting to CDP claim to engage their supply chain, but to what end? As organizations pursue ambitious Net Zero goals, they will need to shift from annual supplier surveys to strategic interventions that make a material impact. With many struggling on where to focus, we heard the following common takeaways from global leaders:
Scaling engagement to enact change
Requiring suppliers to either purchase renewable energy or commit to a science-based target and asking them to engage with their suppliers is a solution that has potential for exponential growth to reduce emissions across the supply chain.
Collaboration between industry peers to reduce value chain emissions
Creating a coalition for industry peers to develop a supplier engagement model that addresses how to manage shared suppliers and reduce overall value chain emissions and providing visibility into shared supplier data.
Activating incentives up and down the value chain
Developing strategies and solutions on how to incentivize suppliers (especially farmers) is a challenge companies face today. Tools and technologies can help identify the largest contributors of supply chain emissions and can enable companies to partner with them and create similar engagement programs for them.
Managing both supply chain diversity and decarbonization objectives
Supply chain decarbonization and supplier diversity objectives are often in direct conflict – organizations have an opportunity to come together and collectively demand change on both topics from their top suppliers.
Climate Week NYC 2021 was once again an inspiring and encouraging event. In 2020, public and private leaders shared how their organizations have been translating intentions into reality and moving ambition into action. This year, the conversations focused on accelerating action and making dramatic changes to halve overall emissions by 2030. It is evident, from the examples above, that organizations see the urgency of acting now and acting fast in addressing climate change. They came to the table this year with ideas, feedback and examples on how they are achieving their Net Zero goals and building partnerships between the public and private sector to enable change for the decisive decade.
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