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Terry Slavin rounds up some of the key messages from last week’s Ethical Corporation webinar on ambitious climate action
To avoid the worst impact of climate change, climate scientists agree that global greenhouse gas emissions will need to drop by half in the next 10 years, and reach “net zero” by 2050. In July, the UK became the first major economy to pass legislation that it will end its contribution to global warming by mid-century.
Organisations like the Science-based Targets Initiative, The Climate Group and the We Mean Business Coalition are asking companies to bring themselves in line with these ambitious emissions reduction goals. But what does that mean in practice? How can business realign their business models without affecting their bottom lines? And to what extent can companies work with policymakers to achieve ambitious climate targets?
Last week I moderated a webinar that tackled these and other questions with four eminent speakers: Gabrielle Ginér, head of environmental sustainability at BT; Aris Vrettos, director of open programmes and international markets at the Cambridge Institute for Sustainability Leadership; Mike Peirce, corporate partnerships director at The Climate Group; and Christopher Springham, vice president, global communications and sustainability at Dutch-based LM Wind Power.
Collaboration with government raises the bar for everyone to get a little closer to net zero by 2050
Here are six of the key messages that came out of the webinar:
1. Engaging value chains is critically important, as they account for up to 5.5 times more emissions than companies’ own operations. Ginér said this is a big focus for BT, which is one of 87 companies that are seeking to align themselves with the most ambitious science-based target of limiting global temperature rises to 1.5C above pre-industrial levels.
She pointed out that BT’s 18,000 suppliers are responsible for more than 60% of its emissions. The firm aims to cut that figure by 29% by 2030 with initiatives like its Better Future Supplier Forum, and clauses in contracts committing suppliers to reducing their emissions. She said encouraging suppliers to report to CDP was also a good starting point for them to take action to reduce their environmental impact.
2. Companies’ willingness to take action on climate change can give a green light to policymakers to increase their own ambition, creating a mutually reinforcing upward spiral known as the “ambition loop”. The net-zero policy change announcement from the UK government came in July, a month after 100 CEOs signed an open letter to Prime Minister Theresa May to legislate for zero carbon by 2050. Previously the 2008 Climate Change Act had targeted an 80% reduction in CO2 emissions by 2050. “Collaboration with government raises the bar for everyone to get a little closer to net zero by 2050 because at the moment we are significantly overshooting that,” Ginér said.
3. The growth in green finance is beginning to make the job easier. The European Investment Bank’s announcement last week that it will end its financing of oil, gas and coal projects after 2021 was welcomed by Vrettos, who said it sent a significant signal to governments and business that such investments risk being stranded in future. “We’ve seen that a lot in the last few months and I think it will accelerate more in the next 12-18 months.”
Springham at LM Wind Power agreed: “We are seeing a flight away from fossil energy to investment in green energy. It’s happening at a government level, but also where people are choosing only green energy in their own investment portfolios or are looking for a renewable energy supplier in their own homes.”
The power of young people's arguments beats anything I can say in the boardroom
4. There is no one-size-fits-all approach for business transformation. “There is a lot of leadership examples and resources for companies to look into to think about what zero-carbon means to them,” Vrettos said. But it all boils down to companies decoupling the success of their business from growth in emissions.
Springham provided details of his company’s path to becoming the wind industry’s first carbon-neutral company, something it achieved in 2018. He said his single biggest advice to other companies is to “act now”, adding that LM Wind has published a 10-step guide to carbon neutrality on its website to help other companies along the same journey. He added that it was important for companies to listen to young people. “The power of their arguments beats anything I can say in the boardroom.”
5. Climate action represents an opportunity for business, not a cost. This was a strong argument made by Ginér and Springham, who both also emphasised the role of their products in helping their customers reduce emissions. BT’s carbon-saving products, such as teleconferencing and cloud networking, now make up nearly a quarter of the company’s revenues, and it has achieved £298m in energy savings in the past 10 years.
Springham said going to 100% renewable energy in its operations had saved LM Power $2.6m from its energy bill in 2018 alone. “It proves that a greener business is a leaner business, and more profitable.”
6. Collective action is a powerful tool. Mike Peirce of The Climate Group, which coordinates the RE100, EV100 and EP100 programmes, said his main message to listeners was that companies can have impact collectively through their buying power as well as what they are doing individually to cut their own emissions. Through the programmes, companies have set ambitious targets, respectively, to source renewable energy, increase electric vehicle uptake and raise energy productivity, and are combining buying power to drive down prices.
“Business matters. Over half of the vehicles bought in Europe are by business fleets. [Society’s] expectations for companies to take climate action are rising, and not only from youth.”
He emphasised the importance of setting unambiguous targets to communicate that companies are responding to those expectations.
“The real thing we’ve noticed with our 100s campaigns is the power and clarity of 100% targets. They send an unambiguous signal that enables communication with suppliers, policymakers and wider society.”
Net zero carbon targets will be a major theme of Ethical Corporation's 19th Responsible Business Summit Europe in London 27-28 May 2020. If you missed the webinair, you can download it here.
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