Learning as we create: The art and the science of corporate climate target setting
María Mendiluce, CEO We Mean Business Coalition
Every business that has made a net-zero commitment is part of an unprecedented global experiment. We know the destination we are trying to reach and science is very clear on the deadline – emissions cut in half by 2030 and net-zero by 2050. However, we are determining the route as we move and learning as we go. There is no blueprint for a major company to follow and therefore, every action taken and decision made is effectively breaking new ground. In this context it is not at all surprising that those companies that are moving first and fastest will need to course correct over time. This is not a reason to stop or slow down but rather to learn and move forward as quickly and effectively as possible.
The We Mean Business Coalition welcomes the publication of the Corporate Climate Responsibility Monitor 2022, and the contribution of NewClimate Institute and Carbon Market Watch to driving forward corporate climate action. We all agree that companies should be accountable for the commitments they have made. Business leaders are always looking for ways they can improve and accelerate action towards their net-zero goals – the only route to addressing climate change.
These companies featured in the report and others like them, have stood up and shown leadership by making commitments and starting to act. They are being scrutinised, rightly so. Yet, forward looking CEOs and their teams delivering on sustainability goals also deserve recognition. Choosing to put your business at the vanguard of corporate climate action is not an easy decision, and often puts them at odds with some shareholders and critics. They have shown the way for thousands of companies to follow, and these companies will benefit from the lessons learnt from the pioneers.
When robust scrutiny and constructive engagement is substituted for accusations of greenwashing, the barrier for corporate entry to the climate cause becomes even higher. We simply can’t afford for potential climate leaders of the future to delay the hard decisions, or act in a less transparent way because they see these first mover companies criticised for not having all the answers. There are hundreds of thousands of businesses, including many major global companies, that are not taking any action. They also deserve scrutiny for those decisions and the implications of inaction, for the climate, communities where they operate, and their long-term viability.
This first wave of corporate climate targets and rankings has driven voluntary corporate action to cut emissions, which in turn has emboldened policy makers to introduce more ambitious and robust climate policies. We call this the ambition loop. We Mean Business has been consistently calling on policymakers to create a policy environment that enables and drives corporate climate action and holds all companies to equal account for their contribution to the climate crisis. This will be key to achieving our collective goal of halving emissions by 2030.
There is no realistic prospect of achieving such a transformation without business action. Companies, therefore, need support on their climate journey, whether they are taking their first steps or at the cutting edge of innovation and new ideas. The We Mean Business Coalition and our partners, including the Science Based Targets initiative (SBTi) have made huge progress in recent years to produce effective tools and frameworks to help business decarbonize as fast as possible in a transparent and trackable way. The SBTi Net-Zero Standard, developed over a two-year process in close collaboration with experts from science, civil society and business; launched in October 2021 does reflect the current best practice in corporate net-zero target setting. Similarly, we are engaging with the newly created International Sustainability Standards Board (ISSB) to improve how company reporting can be made more transparent and consistent, which will help investors make better-informed decisions.
By working together, embracing a spirit of collaborative transparency and learning and rewarding action over inaction we can cut emissions in half by 2030, reach net-zero by 2050 and be all in for 1.5°C.