Climate Focus + Carbon Reduction is a Competitive Advantage for Companies
Yes, you heard me right. Climate focus and progress decarbonising is a competitive advantage for companies. Well, for 21st century-ready one's that want to survive (and maybe thrive) over the next 10–20 years.
Let me sound this out with you…
(see buzzword dictionary at the bottom for terms in italics with an asterisks, they look like this*)
The Climate Crisis* is not only the greatest challenge humanity has ever faced collectively, for businesses of all sizes it also upends any notion of BAU without building in the true cost of all the previously unvalued "externalities".
Companies of all sizes have a big role to play on the road to net zero*. They potentially have the scale, organisational momentum and multi-national reach that neither governments or individuals can match.
The New Green Rush* between now and 2030 is going to need us all to - at least - halve our emissions. This is no small feat, but definitely more than possible with some well placed, consistent efforts.
In stark contrast to this reality, in a recent survey of leading CEOs over 70% said most progress on decarbonizing will be made after 2030. As most of them will have moved on by then that amounts to kicking the can down the road. Doing so will also locki-in the higher end of global temperature rises, somewhere in the extreme zone of 3 to 5 degree Celsius range.
In the same survey I mentioned, 47% of leading CEOs said they support the Paris Agreement*. Sounds contradictory, right?
We have to remember that we're still at the start of this. I'd guess that in a year or two's time these numbers will have shifted in the direction of more immediate action. That's the hope.
Carbon Reduction Progress ≠ A New Cost
Investing in climate isn't a new cost, it's always been there, we've all just been carrying on with our heads in the sand, waiting for legislation to set the minimum hurdle to clear.
For 21st century companies, outperforming the basic legal requirements should be a key part of your corporate mission and values.
That's not where we're at now, and there's no going back to that considering the overwhelming, indisputable scientific evidence around the impact human activity is having on the whole planet.
It's not easy. I'm not saying it is. Turning a complex and multifaceted organisation into one ready and able to positively contribute towards pulling us onto a sustainable path isn't an overnight task.
What are your emissions?
You aren't going to need to do that much to address your Scope 1* and Scope 2* emissions. That's the easiest part. Do that now. It's also ok if it's a process and takes a few years or more, depending on the juggernaut you're turning.
Decarbonise these with as little offsetting* as possible, and then review regularly what else you can change to truly decarbonize further. Offsetting is, often, at best avoidance and at worst, greenwashing*. The time for solutions that don't really reduce or remove carbon and equivalents* in the atmosphere has passed.
Next, and start building capability around Scope 3* - where you work with your full supply and value chains to build a comprehensive roadmap that works steadfastly, rigorously towards the goal of carbon neutral*, or even carbon negative/climate positive* if you want to be ambitious.
For many companies a large part of your emissions will be in Scope 3, from their supply chains. This can be the majority of the total. Depending on the business it can range between 75% and 90% of their total footprint.
We won't get close to Net Zero without you working on Scope 3. Just doing the easier Scope 1 and 2 is pretty much still greenwashing*.
For some companies, you will need to change your business model to make it financially viable. Not all companies will make it to net-zero carbon doing business they do now. That's the truth. Pivot or quit is the answer.
Companies that continue to add carbon to the atmosphere just a few years out from here won't make it either. Both trying and investing now as well as ongoing increases your odds of survival.
There's upside for companies to invest proactively. It's in your interest. Namely, we consumers will reward those that do, both now and in the future. Increasingly so. We're already making values driven decisions with our wallets, and companies that are slow to act, intentionally misleading or take no action will find it harder to catch up later on. There's also the attracting and retaining talent element to consider as well.
It's easy to get started - begin by measuring, build an ambitious roadmap to chip away at; then track, update and always be transparent. Ideally publish your Life Cycle Assessment* data openly.
If you run or work at a small company that has enterprise or mid-market customers I wouldn’t be surprised if they started mandating measurement, transparency and reduction over the next few years. Best to get in front of the curve.
Are you 21st Century Ready?
Companies have been waiting for the government to set the landscape through policy or law and trying to make the least changes possible. This is not a business model fit for The Climate Crisis, or, I'd argue one appropriate for the 21st century.
We need - and deserve - more companies who lead.
If you're wondering how everything fits together, have been exploring this space for a while, or are newly interested we made something for you!
Check out our Intro to Climate and Climate Companies email courses.
Have hope, make progress! 💚
Climate Buzzword Dictionary
The Climate Crisis - the accelerating heating of our planet due to human activity
New Green Rush - the global race to decarbonize, either by inventing or deploying technology or other solutions - including nature-based - that reduce or capture emissions at scale, and by doing so evolving the economy for a post-fossil fuel world
Net zero - a target to stop producing Greenhouse Gases from human activity by 2050. It combines reducing, removing as well as offsetting hard to eliminate emissions. Also called Net-zero 2050
Paris Agreement - international agreement to limit climate change to 2 degrees Celsuis while aiming for 1.5C increase in average global temperatures
Scope 1 - are direct emissions created from business operations. For example: company factories or vehicles, industrial processes or manufacturing.
Scope 2 - are indirect, or purchased, emissions. For example: from electricity used in a building to power, heat or cool it.
Scope 3 - are emissions from the value or supply chains. For example: from basic materials or components, employees commuting, distribution or waste disposal. As well as anything else in a company's supply chain. This also includes your emissions driving to the store to buy whatever product; as well as how you use and dispose of it.
Carbon neutral - making or resulting in no net release of carbon dioxide into the atmosphere, likely using offsetting rather than fully decarbonized for Scope 1 and 2 emissions. Probably doesn't include emissions from Scope 3 sources
Carbon negative/climate positive - not only being carbon free in the future, but also moving historical emissions + more as well
Offsetting - buying parts of carbon avoiding, reducing or removing projects that avoid or remove emissions to reduce your own footprint
Greenwashing - tactic to hide emissions in low or zero carbon assets. Or misleading information about the emissions from a particular activity or company
Carbon and equivalents - bundle of main greenhouse gases - carbon dioxide, methane & nitrous oxide. Abrev. CO2e
Life Cycle Assessment - abbreviated to LCA. A methodology to calculate how much CO2e is emitted from a particular good or service throughout its entire life from raw materials, production, transport, use and disposal