The Climate Group: Boardrooms finally grasping business case of climate action
Amid a flurry of high-profile corporate sustainability commitments, the Climate Group's chief executive has told edie that improved boardroom understanding around the business case of climate action has enabled the low-carbon agenda to flourish.
A week ago, Kellogg's and Clif Bar & Company announced they were signing up to the RE100 commitment to power their global operations with 100% renewable energy. That news sparked a wave of bold pledges from major companies seeking to ramp up climate action.
On Monday, Nike and Levi Strauss committed to set emission reduction targets through the Science Based Targets initiative, pushing the number of companies pledged to the scheme beyond 300. Yesterday, meanwhile, marked the launch of a new initiative encouraging the uptake of EVs, with multinationals Ikea, HP and Unilever all among the first 10 members.
This surge in corporate sustainability activity has coincided with Climate Week, the international summit launched on Monday in New York by the Climate Group. The organisation’s chief Helen Clarkson believes that the reasoning behind the heightened action stems from improved boardroom buy-in.
“Those major companies don’t take these decisions lightly,” Clarkson said. “They do it because of the business case. That’s what is really filtering through to the boardroom. There’s a much better understanding around what the business case for action is. In some parts of the world, renewables have become the cheapest form of energy, the prices of solar has fallen about 85% in the last seven years, offshore wind costs are coming down.
“So we’ve seen renewable energy costs absolutely tumbling, and that does change the investment picture. Coal isn’t attracting investment, because investors look at the long term and see that the future is a lot more about renewable energy. So that is very positive.”
Climate Week’s opening ceremony kicked-off amid confusion around the US’ stance on the Paris Agreement. After speculation arose on the issue at the weekend, a top White House adviser was forced to confirm that President Trump still plans to withdraw the US from the historic deal.
Clarkson admits that the speculation was an “unwelcome distraction”, but insists that it has not soured the mood during the first 48 hours at the summit. In contrast, delegates were buoyed by new research from the Climate Group’s which shows the action of US states, cities and businesses could "significantly mitigate" the impact of the US decision to withdraw from Paris.
“We’ve been talking a lot about action this week,” she said. “A real focus has been on what is happening to deal with climate change. That’s where we want the conversation to be.
“There was a distraction over the weekend with Trump again, and while everyone would wish that the US stays in Paris, there’s a lot that’s happening. For us it’s about climate action and how you get into that and really getting into the solution agenda.”
The solution agenda was bolstered by yesterday’s rollout of the EV100 scheme, the global platform which aims to make electric vehicles (EVs) "the new normal" by 2030. Among the key commitments made by the first EV100 members includes a pledge to integrate EVs directly into owned or leased corporate fleets, by ensuring that all vehicles up to 3.5 tonnes are EVs by 2030.
According to Clarkson, the founding members see the business logic in leading a faster transition and addressing local air quality issues in their markets.
She said: “Often with initiatives like this, some companies want to be the first, and others will want to see how it plays out. We’ve had a great response so far, and we’re expected some more sign ups in the next few weeks, so that’s great.
“We know what some of the barriers are to the EV rollout, and the way the EV100 campaign is structured, companies can show leadership. They can reduce some of the investment costs by sharing best-practice, and what we want to do is really drive the dialogue between governments and businesses. That will happen over time.”
Some members, including Swedish retailer Ikea, have pledged to support EV uptake by customers by installing workplace charging infrastructure and delivering engagement programmes. Clarkson believes that a competitive advantage can be gained by these companies which provide customers with reassurance that they have a place to charge their car.
“Customer charging will be a big one,” she said. “Think about being able to go to Ikea and charge your car while you’re in there. You can see how this would become a point of competitive advantage for businesses. It’s a well-crafted commitment in terms of the ability to send that signal."
Pace, scale, ambition
After the hubbub of the Climate Week has died down, Clarkson’s attentions will turn back to the acceleration of corporate sustainability commitments. Clarkson explains that for companies that have already committed to platforms such as the RE100 and EV 100, the challenge will be to ensure that targets are achieved as rapidly as possible, and then to push the commitments onto suppliers.
She said: “We often talk about pace, scale and ambition. It’s one thing making these commitments. We need to give them the tools to be able to deliver on it, and to do that as quickly as possible. With the RE100, we’re at the point where companies are reaching their targets faster than they had set.
“The other point is scale, how companies can use their influence along a supply chain to push. With the EV100 scheme, one of the points is about service contracts and making your suppliers also sign up. That’s great to see, and it’s certainly a route we would like to see more companies push out.”