One third of US firms losing business by failing to respond to the climate crisis
A third of US businesses are losing employees, sales and investment opportunities by failing to adequately address the climate crisis, a new report has found.
NEXT Energy Solutions survey more than 200 cross-industry senior managers, executives and C-suite decision-makers from US businesses, to gauge their thoughts on corporate responses to the climate crisis.
The survey found that 33% had reported losing business to competitors due to inadequate strategies and tangible actions to respond to the climate crisis. Businesses reported losing employees, sales and investments.
“Every rational, engaged and forward-thinking board or C-suite realizes the need to act with urgency to address the climate crisis,” NEXT chief executive Daniel Emmett said.
“Climate mitigation is no longer just a federal regulation problem for oil companies or manufacturers — the broader business community and consumers are making it crystal clear that inaction has tangible economic and competitive consequences.”
In total, 80% of respondents reported that their business was being more proactive in regards to the environment with personal interest in climate progress (49%), access to new environmental-focused markets (34%) and PR/company image goals (32%) listed as the main drivers for action.
Additionally, almost three-quarters believe that their companies’ sustainability is “enough” to meet regulatory and consumer demands. Previous reports from NEXT have also claimed that staff want to work for environmentally conscious companies, with 74% of employees stating they would factor that into a decision to leave a company.
Earlier this month, the likes of Amazon, ExxonMobil, Chevron and Tesla were named as some of the US’s worst corporate climate laggards in a new report.
Published this week by non-profit As You Sow, the ‘Road to Zero Emissions’ report assesses how 55 of the largest US-based corporates are responding to the growing global net-zero movement and contributing to global efforts to hold temperature increases above pre-industrial levels below 1.5C. Sectors covered include technology, FMCG, retail, transport, energy, chemicals, pharmaceuticals and finance.
Worryingly, none of the 55 companies achieved a top score for target-setting around emissions reductions. As You Sow was looking for target plans including a net-zero goal for 2050 at the latest, applicable to all emissions scopes, underpinned with verified, 1.5C-aligned interim targets.
This finding echoes several recent, separate reports into the credibility of corporate climate commitments. Net-Zero Tracker’s post-COP26 stocktake revealed that 68% of publicly listed businesses had not set targets covering all Scope 3 emissions. More recently, an analysis of 25 corporates’ net-zero plans concluded that they cover, on average, just 40% of the business’s total value chain emissions.
As You Sow has also highlighted how the majority of companies are not reporting their Scope 3 emissions in a credible manner, which could be hampering robust target-setting. 90% of the companies it assessed report their direct (Scope 1) and power-related (Scope 2) emissions, but only 36% reported all of their relevant Scope 3 emissions in line with the GHG Protocol.