Climate Week NYC 2022 Takeaways: Getting It Done
María Mendiluce, CEO, We Mean Business Coalition
Image shows Christopher Guerin of Nexans and María Mendiluce of We Mean Business Coalition at Climate Week NYC (Credit: Climate Group).
Climate Week NYC was the first time the climate movement had gathered in New York since before the Covid-19 pandemic and it was clear to me that the conversation has moved on. We Mean Business Coalition was set up to encourage companies to start taking climate action – and growth was initially gradual. When I became the CEO of the Coalition in 2020 there were 800 pioneering companies committed to setting science-based targets. Now there are almost 4,000.
It’s clear that climate action has taken its rightful place at the top of the business agenda. One of the great strengths of business is delivery. Companies are now innovating to find, develop and implement solutions because things like clean energy or energy efficiency are simply good business. In New York I heard CEOs and CFOs debating how to implement solutions at scale with a level of sophistication and depth akin to the way that they would talk about financial and operational elements of the business. The conversation has fundamentally shifted, and the momentum is unstoppable.
Getting reporting right will drive climate progress
As a climate community, we are often running to catch up with ourselves. We’ve succeeded in getting companies to voluntarily commit to and start taking climate action but we haven’t yet given them a framework to report against. Currently, there’s a time lag between when companies commit to – and start to invest in – climate action, and when the outside world can see the results of their efforts in terms of emissions reductions. That is why we’re working with the Science Based Targets initiative to develop and improve the reporting framework, which should be updated by next year.
At the global level, there’s also a lack of consistent reporting frameworks. Large companies working across multiple markets need to be able to report on their emissions reductions in a way that meets the standards set by authorities across all jurisdictions. Once investors can compare businesses across multiple countries and regions, the finance will flow towards the most sustainable companies. That is why we are calling for the standards currently under discussion in the U.S. and EU to refer to the International Sustainability Standards Board standards.
Collaboration is essential to help heavy industry lighten up
Aviation, steel, shipping – you name an industry with a large carbon footprint, thanks to Mission Possible Partnership we now have sector transition strategies – endorsed by industry leaders – to get them to net zero. Companies at all levels are now talking details: should the electrolyzer for hydrogen be located next to the production or consumer site? It’s no longer about whether we need hydrogen, but how we get it to consumers.
The sticking point here is about how to finance the scaling up and innovation required. For example, in aviation, a rapid growth in the production of sustainable aviation fuel is needed. We currently have just one plant globally producing this fuel, but we need 200 by 2030. This will require policymakers working together with business to drive up the demand to achieve that scale and pace.
The route to cutting Scope 3 emissions gets clearer
Many companies struggle with measuring and emissions generated in their value chain (Scope 3 emissions). Yet I heard from some of the largest, most innovative companies in the world, including Apple, PepsiCo, Mars, AB InBev, Walmart, Mastercard and others, on how they are engaging with their suppliers to find solutions. The roadmap for tackling Scope 3 emissions is becoming clearer:
1) Start by talking to the companies in the value chain;
2) Help them measure their emissions within a specified timeframe;
3) Find ways to collaborate on solutions since suppliers are unlikely to have the expertise and capacity to devise the answers in isolation.
This is a prime area for collaborative, innovative approaches since large corporates often share suppliers, and a consistent way of reporting will save many headaches. The last thing small companies need is five different ways of reporting. The SME Climate Hub can help harmonize those types of approaches to help both small companies report, and large companies find suppliers that are on the journey to decarbonization.
Companies are sticking to their commitments despite an ESG backlash
“We’re here for the long run,” was a phrase I heard repeated at Climate Week NYC. Companies already on the road towards net zero don’t have the time or inclination to get pulled into politics or culture wars. Business leaders are determined to stay focused on the task in hand, to meet customer demand and expectations and to play their part in reducing climate–related risk while seizing the opportunities of the net-zero transition.
Once reporting frameworks are finalized, the progress and impact delivered by these leading companies will speak for itself. I am certain they will be the winners in the future economy.
Adaptation needs more focus
We need more money and support to flow into those communities that must adapt to the inevitable impacts of climate change. This is not at odds with efforts to cut emissions because companies will continue to act. Across all parts of the economy, we will continue to fight to prevent every fraction of a degree of global temperature rise. Climate impacts already pose a material risk to the operations and supply chains of all multinational companies. It’s now a business imperative for companies to invest in resilience, and plan for how they will adapt to a changing climate wherever they operate. The key is to ensure those plans and projects are designed in a way that involves the communities where they take place.
Loss and damage from climate change is here and someone has to pay
As climate–related disasters increase worldwide, this discussion was prominent in people’s minds. Christiana Figueres suggested that since energy companies are getting huge windfall profits as a result of the invasion of Ukraine, some of that should be redirected to cover the growing cost of loss and damage that climate change has caused. Since the use of fossil fuels is responsible for such a huge amount of emissions historically and today, she said this would be a powerful response, particularly from those oil and gas companies that claim to be on the pathway to net zero.
As we head from Climate Week NYC towards COP27 – from my perspective – it’s all about action. It’s about demonstrating that business is acting, and urging governments to turn ambition into policies that will scale up corporate action across industries and economies to get us on track for halving emissions by 2030.