Corporate commitments for net zero by 2050 rely on climate transition action plans from 2023We Mean Business Coalition, CDP, Ceres, Environmental Defense Fund
There’s just one week to go until COP27, with the theme of ‘implementation’ chosen by the Egyptian presidency. As the focus sharpens on how governments and businesses are turning net zero commitments into action, We Mean Business Coalition, CDP, Ceres and Environmental Defense Fund have this week released a new report to help companies accelerate their climate journey – via credible climate transition action plans (CTAPs).
We release this report against a backdrop of alarming new research which underlines the need to go further, faster to deliver deep emissions cuts. UNEP’s Emissions Gap Report points to the need for urgent, system-wide transformation. Countries are beginning to bend the curve, the UNFCCC’s synthesis report outlines, but commitments and actions are still nowhere near the scale and pace of emissions reductions required to put us on track to stay within 1.5℃ of warming. Investment in clean energy is set to rise 50% by 2030, says the IEA, but must go even faster to deliver on net zero targets. Meanwhile, the Lancet issues a sobering reminder of what is at stake: climate change is worsening food and water insecurity, impacting health and the ability to work, and increasing the spread of infectious diseases.
What does this mean for business? To avoid ever-growing human suffering and overwhelming economic cost and instability caused by rising global temperatures, it’s time to double down on action. Setting ambitious science-based targets via SBTi and other goal-setting initiatives is vital. It gives governments confidence to raise their own ambition and create the conditions to accelerate action. Disclosure through CDP is crucial: it increases transparency, builds accountability and helps capital markets track companies’ progress.
Between setting goals and disclosing progress, it is critical that companies develop a CTAP to ensure their targets are achieved. As partners who work to accelerate corporate action on climate change, We Mean Business Coalition, CDP, Ceres and Environmental Defense Fund have come together to help companies address their climate impacts by defining what should be in a CTAP.
Working with Ramboll Consulting, we mapped out 31 existing transition plan guidance documents from 17 organizations and surveyed 100 companies, investors, and other stakeholders on their needs. We found that companies are confused about what to include and want simple instructions. Meanwhile, investors, governments, NGOs and the public are still searching for decision-useful information from companies on their climate strategy and progress. Plans that include sufficient information demonstrate how a company is aligning with ambitious long-term climate goals, and how its business model will transition to be profitable in a net zero world.
Further, not nearly enough companies are developing and disclosing credible climate action plans. For instance, of the 13,100+ organizations who disclosed their environmental data through CDP in 2021, only 135 disclosed against all 24 indicators in its climate change questionnaire that align with CDP guidance on what constitutes a credible climate transition plan.
Our new report builds on CDP’s discussion paper and other guidance and provides companies with a clear checklist and templates to simplify what needs to be in a plan across four core areas: reducing emissions across the value chain, integrating into business strategy and governance, advocating for public policies, and ensuring a just transition.
The guidance is integrated into The 4 A’s of Climate Leadership, We Mean Business Coalition’s tool for companies that are serious about navigating the journey to credible action. By following all the steps through Ambition, Action, Advocacy and Accountability, companies will be well-placed to create a credible transition plan. Meanwhile, it will be integral to the Ceres Ambition 2030 initiative – which is engaging North American companies in the highest-emitting sectors to generate ambitious commitments backed up by transition plans. And it’s a key element of Transform to Net Zero, an initiative from Environmental Defense Fund and leading businesses which aims to get the world’s 1,000 largest companies to have targets backed up by transformation plans by 2025.
Our aim is to make it as clear and straightforward for companies as possible. This will help businesses steer a course to credible action just as the spotlight is trained on corporate climate ambition, searching for evidence of greenwash.
A company’s climate action journey, to halve emissions by 2030 and achieve net zero by 2050, begins by being clear about the steps they will take within the next year. We issue a joint call to action: for every company that has already set its targets to now prioritize developing its climate transition action plan and for every other company to begin laying the foundations.
You have the tools, now start building.
Amir Sokolowski, Global Director of Climate, CDP
Laura Draucker, Director Corporate Greenhouse Gas Emissions, Ceres
Elizabeth Sturcken, Managing Director, EDF+Business
Jenny Ahlen, Director of Net Zero, We Mean Business Coalition