Three steps to reduce emissions and restore nature
We Mean Business Coalition
At last week’s World Economic Forum (WEF) in Davos, the urgent need for business to reduce emissions was firmly at the top of the agenda. The science is clear: we are already reaching dangerous tipping points in the earth’s ecosystems. We need to halve emissions by 2030 to limit global temperature rise to 1.5°C and avoid the most catastrophic effects of climate change, as outlined by the Intergovernmental Panel on Climate Change (IPCC).
The risks of failing to take action are clear. The WEF’s Global Risks Report 2023 highlighted failure to respond to climate change and biodiversity loss among the most severe long-term risks facing the world. It is also increasingly clear that tackling the climate crisis is not only a scientific and environmental imperative but a core business issue. A PWC survey published last week revealed that a majority of global CEOs expect climate change to have some degree of impact on their business in the next 12 months, particularly on their cost profiles and supply chains. Taking action to mitigate these impacts with climate-positive solutions is not only critical for the planet, but also critical for long-term business resilience.
Barriers to progress
Companies and governments are under increasing scrutiny to deliver on their climate goals, and concerns around corporate greenwashing are rife, as our recent survey produced with Conservation International, Corporate Minds on Climate Action, highlighted. While greenwashing should always be avoided, it’s important to highlight that making credible progress is by no means easy for companies. Many of the global organizations in the same survey identified significant barriers to reducing emissions and meeting targets:
- 86% said budget constraints were a challenge;
- 86% said a lack of consistency and collaboration across their organization was a problem; and
- 84% cited technological constraints as a barrier.
Reasons for optimism
But despite the obstacles, there is cause for optimism. The move towards clean energy solutions continues to gather pace, and a report produced by a team including Systemiq and the University of Exeter at Davos highlighted three “super-leverage points” in the global economy that could trigger a breakthrough on climate action: mandates for the sale of electric vehicles, “green ammonia” in the production of fertilizers, and public procurement of plant-based proteins.
Meanwhile, increasing numbers of businesses are acknowledging that they need to reduce emissions. Despite the barriers, our survey found that 92% of organizations identified long-term decarbonization as a priority for their business. And the Science Based Target initiative’s (SBTi) most recent progress report shows dramatic growth in the number of companies setting targets to reduce emissions in the last year.
Turning climate commitments into credible climate action
The need to act is clear, yet there remains a gap between commitment and action, with less than 46% of companies with targets reporting progress. That is why the UN Secretary-General Antonio Guterres was among those at Davos calling on companies to go beyond commitments and put forward “credible and transparent transition plans on how to achieve net-zero” this year.
To help close this gap, We Mean Business Coalition develops and brings together best-in-class guidance for companies on how to take a “whole company” approach to reduce emissions across the value chain and take action to protect and restore nature. These are the steps we advise every company to take now.
The first step is for companies to follow the 4 A’s of Climate Leadership:
- ambition, through setting science-based targets;
- action to reduce emissions within and beyond the value chain in line with those targets;
- advocacy for climate policies; and
- accountability for those commitments.
Companies who follow the 4A’s will be well-positioned to take the second step: create a climate transition action plan (CTAP). CTAPs detail the forward-looking, specific, near-term actions that a company is taking to cut emissions in line with net zero targets and ensure that information can be easily shared with investors and other stakeholders. We Mean Business Coalition, in partnership with CDP, Ceres and EDF has reviewed existing resources to produce consolidated guidance for creating robust plans.
Taking nature-positive steps
A third step for every company that wants to be a climate leader, is to invest in nature-based solutions to climate change. Climate change and nature loss are deeply interconnected: deforestation is contributing significantly to global warming, while warming oceans are destroying coral reefs, which provide vital protection against natural disasters like tropical storms. Decarbonizing supply chains alone will not be enough to limit global temperature rise to 1.5°C. We need to halt nature loss at the same time to protect and restore the carbon sinks and ecosystems on which the world depends.
Investment in global carbon markets has grown rapidly in the last few years, and yet there is significant concern among businesses that investing in carbon credits can be perceived as a tool for greenwashing. While 89% of businesses in our recent Corporate Minds survey felt that carbon credits were an important part of decarbonization efforts, another 44% worried about other companies using carbon credits as an excuse not to cut their emissions.
And with a renewed focus on the credibility of carbon credits in recent weeks, it is more important than ever that companies ensure their investments in nature are the right ones. Fortunately, support is available. Our 5 Principles for investing in nature, created in partnership with Exponential Roadmap Initiative and the Potsdam Institute for Climate Impact Research (PIK) outlines how companies can select nature-positive solutions in line with new standards from regulatory bodies to ensure the highest levels of credibility.
Business has a critical role to play in maintaining the pathway to 1.5°C. Doing so will contribute not only to their long-term success, but also to the planet. Now, more than ever, it is time for companies to turn ambition into action, and commitments into credible and concrete plans.