At President Joe Biden’s Leaders Summit on Climate, the administration announced plans to cut GHG emissions by at least 52% by 2030, as part of its Nationally Determined Contribution (NDC). It’s an ambitious goal with enormous ramifications for global efforts. It’s equally significant for the private sector—another strong signal that now is the time to step up on climate leadership.
There’s been great progress by countries to decarbonize, committing to reduce emission to meet the requirements of the Paris Agreement. Governments at all levels understand their roles and responsibilities. While their efforts are commendable, they’re not enough.
“Governments are nowhere close to the level of ambition needed to limit climate change to 1.5 degrees and meet the goals of the Paris Agreement,” said UN Secretary General António Guterres, calling a February report highlighting the shortcomings of sovereign actors by the UNFCCC a “red alert.”
Averting the worst effects of climate change is the challenge of our time, but with that challenge comes unprecedented opportunities. This momentous year presents this rare opportunity to accelerate action and meet the moment.
Into this challenge steps business. Businesses will play a vital role in adopting and advancing the commitments put forth by governments, and governments will rely on strong public-private partnerships and market forces to ensure they are implemented and successful. The more involved businesses are as part of the conversation, the bigger the opportunity they have to help shape the path forward.
Many business leaders, confronted with new or expanded mandates to lead on climate, are asking a simple question: What does that leadership look like? Given the ongoing sustainability commitment arms race, changing metrics, proprietary lists and rankings and a slew of acronyms to navigate, it can be difficult to assess what constitutes corporate leadership.
A blueprint for climate leadership
Measuring corporate climate action is a complex and fractured issue. As businesses look to become leaders on climate action, they should think of Impact and Trust as their North Stars. Our own data backs this up: 2021 Edelman Trust Barometer showed us that business is the most trusted institution today, with 86 percent of participants expecting CEOs to publicly speak on societal challenges. With that trust comes responsibility as well as opportunity for those willing to lead. Such leadership often consists of the following:
- Build a credible foundation: Measurable, transparent impact itself is the best barometer for sustainability leadership. There are no shortcuts to leadership, only a foundational commitment, constantly questioned, tested and improved over time, for the greatest impact on material issues.
- Create both long and short-term goals: Long term commitments to action are vital, especially as the IPCC calls for net-zero global emission by 2050. But 30 years is a long time away, time we don’t have, so short-term goals and immediate action are imperative. Leading businesses have and continue to set and measure against short-term goals, while targeting longer term goals in parallel, to reduce their impact immediately.
- Set science-based targets: Climate goals should be validated along science-based targets. Sector-specific goals must be in line with the latest climate science and should include clear pathways to meet the goals of the Paris Climate Agreement. The Science-Based Target initiative (SBTi) is leading this charge.
- Partnerships and collaboration: If you want to go fast go alone, if you want to go far, go together. The gravity of the shared challenges we face invite cross-sector, cross-industry and even competitor collaboration. And climate action is stronger and more effective when we endeavor together.
- Report and repeat: Reporting is increasingly important to measure sustainable leadership. Ensuring alignment on the issues most material to your business and to stakeholders while updating them on progress along the way is essential to a credible sustainability plan and ultimately to impact. Reporting should be honest about the challenges faced and forthright about the company’s current stage of sustainability development. Critics will otherwise be quick to denounce efforts as incomplete, insincere or as greenwashing.
- Net Zero or not zero: what about offsets? Net Zero is an important goal to set. But as stakeholders look underneath the hood, Net Zero by 2050 commitments are inviting scrutiny if they lack rigor, transparency and urgency. Commitments should focus less on the net and more on the “zero,” through a stringent focus on emissions reductions (throughout the supply chain) and minimizing the use of offsets to only that portion that has no viable alternative solution.
- Plan for change: Companies must stay vigilant to understand and react to the rapidly changing sustainability landscape and expectations that will continue to intensify. As devastating climate events persist, we’ll continue to see stakeholders demand more ambitious commitments to action and the evolving systems to understanding who is doing their part.
One reality that hasn’t changed since the signing of the Paris Agreement: The importance of bold leadership on climate issues can’t be understated. This is a unique moment in our history, where we have an unprecedented opportunity to build a more sustainable, equitable world with more intentional plans and policies that can pave way for brighter days ahead. Here’s to continuing progress.