While We Fight Over Corporate Climate Action, Highly Polluting Business As Usual Continues UncheckedMaría Mendiluce, CEO, We Mean Business Coalition
This article was originally published in Newsweek Opinion
A fierce debate is currently distracting businesses from their collective responsibility to decarbonize. A raft of reports taking companies to task over the pace and scale of their climate action have left some businesses questioning their investments, particularly in natural climate solutions (NCS).
Recent reports that airlines and other hard-to-decarbonize industries are to stop investing in carbon credits reflect some hesitancy creeping into the voluntary carbon market.
Blanket criticism of what are still broadly termed as “offsets” highlights the prevailing lack of understanding of the role that nature investments must play in corporate climate action if we are to achieve our climate goals. This is resulting in the deeply unfortunate consequence of reducing the overall climate ambition of some companies by curtailing their investments in the natural climate solutions desperately needed to protect climate, nature, and vulnerable communities.
Scrutiny is crucial to drive accountability, but something is clearly wrong. Why are those corporations making genuine investments into action on climate and nature also the ones receiving the most criticism? In stark contrast, companies continuing with their highly polluting business-as-usual somehow escape scrutiny.
The reality is that nearly 60 percent of Fortune 500 companies still have no net zero strategy in place. Even fewer have set any specific targets relating to nature, which—when you consider the scale of emissions reduction that must come from ecosystems—is a serious barrier to effective climate action.
Unless we start protecting intact forests, there’s no hope of limiting global temperature rise to 1.5 degrees Celsius as outlined in the Paris climate agreement. Even if our energy system was completely decarbonized tomorrow, we would still fail to meet global climate goals, not least because deforestation releases between 12 and 20 percent of global greenhouse gas emissions.
We simply must invest in keeping forests standing. A recent U.N. report clarified that, by 2025, at least 1 billion metric tons of the annual emissions reductions needed must come specifically from protecting tropical forests. But it’s not just trees; we need to finance the overall protection, restoration and management of ecosystems to harness their ability to both cut and remove emissions—potentially a total of 11.3 billion tons by 2030. To cut emissions would require activities like stopping deforestation and using regenerative farming techniques while increasing removals means reforestation and wetland conservation, for example.
To achieve this requires urgent, large-scale, and sustained investment. One extremely effective way to channel such finance to forest conservation is to increase the number of high-quality forest protection credits (known as REDD+) available on the voluntary carbon market (VCM).
The VCM has the potential to fund and deliver up to 32 percent of natural climate solutions’ potential and at least 10 percent of the overall mitigation we need by 2030. However, in the last three years, only 1.2 percent of NCS’ potential has been unlocked by the VCM. Recent research showed that we need over £130 billion per year to end deforestation.
We cannot raise these funds unless we address companies’ concerns about the reputational risk of investing in the VCM. We therefore must urgently build the confidence of business leaders to invest in NCS, rather than opting out. We need companies to be exploring how they can support the development of high-integrity REDD+ credits—in addition to committing to robust and science-based internal emission reductions.
Yet there is hope; many companies remain strongly committed to the VCM. Microsoft, Disney, and Salesforce are a few examples of big names backing high quality carbon credits. What’s more, all indications demonstrate that the companies willing to use high-quality carbon credits as part of their strategies have greater ambition in their climate plans than companies that don’t. And ever improving frameworks from the Voluntary Carbon Market Initiative and the Integrity Council for the Voluntary Carbon Markets (ICVCM) are ensuring that the quality of credits is getting better over time.
Have we misdirected our climate critique? Currently, we risk using up the limited time remaining to achieve our climate goals debating what perfect corporate action should look like. Let’s focus instead on those who refuse to even try and use either a carrot, a stick, or both to spur them into action. Otherwise, if all our efforts go into catching greenwashers, we will unwittingly let the most determinedly business-as-usual companies off the hook and block desperately needed investment into nature protection and restoration.
The dangers of greenwashing must be balanced against the existential threats we face today from failing to mobilize finance to conserve and restore our global ecosystems.
It’s time to counter the idea that any corporate investment in carbon credits is tantamount to greenwashing. Yes, we need to carefully consider a company’s environmental claims to avoid inaccurate, outlandish, or get-out-of-jail-free assertions that delay or distract from emissions reductions. We must also support those that are making significant efforts both to cut their value chain emissions and invest in nature, recognizing that no company is there yet.
If we turn our attention to the companies who are doing nothing to decarbonize their value chains, there’s still time to incentivize action and encourage much needed private sector investment in nature and get on track for a future in which all can thrive.