More than half of the world’s largest companies don’t have a chief sustainability officer. Here’s the proof they’re missing out

5 12 2023

The words “The World Needs You” are projected on a screen at the opening ceremony of the World Climate Action Summit during COP28 in Dubai on Dec.1. Photo: Chris Jackson/Getty Images

By Sheri Hickok via Fortune.com • Reposted: December 5, 2023

The Global Stocktake is set to deliver a sobering truth–current efforts to reduce emissions are not enough to meet our goal of keeping global warming below 1.5 degrees Celsius. It is clear government commitments will not drive sufficient action–and the private sector is increasingly under pressure to close the growing emissions gap.

The corporate climate landscape is evolving quickly and is more complex today than even a year ago. New standards and guidelines, as well as regulations and reporting requirements, are raising questions about corporate integrity and ambition. The antidote to this is a chief sustainability officer–a leader who can set strategies to embed climate priorities within business goals, align purpose and profit, and navigate the plethora of new regulations and standards putting climate actions and claims under a microscope.

However, our research found that chief sustainability officers (CSOs)–or equivalent roles–do not exist at more than half of the world’s largest companies. Research from Climate Impact Partners examining the climate commitments of the Fortune Global 500 showed that companies without a CSO saw emissions increase 3% in the past year, while those with the position saw a modest decrease. This key role, despite being still relatively new, is expected to increasingly deliver a greater impact. It turns out that caring about climate change is also good for business. Among the world’s largest companies, those that reduced reported emissions from 2021 to 2022 earned on average nearly $1 billion more in profit than their peers.

CSOs must balance ambition with pragmatism. They need to set climate goals that support business growth. Fortune Global 500 companies with a CSO set carbon neutral and net zero targets seven and three years sooner respectively, compared to those without a CSO. Among those same companies, those with a 2030 or sooner target reduced operational emissions by 7% from 2021 to 2022, whereas companies without a 2030 target saw a 3% increase in emissions. This is why targets are table stakes– and the CSO is essential in setting the right ambition and path forward for the company.

The onset of standards and guidance around claims, such as the EU’s Green Claims Directive and Voluntary Carbon Markets Integrity Initiative (VCMI), is putting companies on edge as they try to avoid accusations of greenwashing. The VCMI’s latest rulebook, which provides guidance on the credible use of high-quality carbon credits and claims, is working to build integrity, end-to-end, from supply (provision of carbon credits) to demand (purchase of carbon credits). The guidance, which will be expanded later this year, will help address a critical solution that enables companies to finance emissions reductions around the world.

The tsunami of regulations is overwhelming. Starting next year, California will require companies to report on their engagement with the voluntary carbon market. Soon after, the EU will follow with their disclosure regulations, along with the U.S. Securities and Exchange Commission with their highly anticipated ESG rule. 

All of this is forcing CSOs to focus more on accounting and compliance rather than strategizing to deliver reductions. Regulation can provide structure, direction, clarity, and credibility, but corporate sustainability teams need to be prepared to find the crosswalks between the different rules and disclosure requirements. 

Everyone is going to walk out of COP28 with heavy responsibilities–corporations need a strong chief sustainability officer to succeed while taking bold climate action. But in order to reap the benefits, companies must first make the hire.

Sheri Hickok is the CEO of Climate Impact Partners.To see the original post, follow this link: https://fortune.com/2023/12/04/half-world-largest-companies-chief-sustainability-officer-proof-missing-out-climate-change-sheri-hicock/


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Categories : Climate Change, corporate social responsibility, ESG, reputation management, responsible brands, sustainability, sustainable branding, sustainable brands

The Incredible Connection Between Consumer Loyalty And Climate Responsibility

24 11 2023

Photo: Getty Images

By Dan Lambe, Forbes Councils Member via Forbes • Reposted: November 24, 2023

In the digital age, the importance of public perception cannot be undervalued. Opinions form fast and travel even faster. Specifically in the corporate sustainability space, consumers can be skeptical of companies that boast their environmental initiatives. Some of this scrutiny likely stems from highly publicized cases of “greenwashing”—in which some brands and businesses were proven to have exaggerated the impact of their sustainability efforts.

On one hand, many private sector leaders are now, thankfully, taking a more responsible and thorough approach to setting their ESG and sustainability goals. But the progress has sometimes gone unseen by the public because of the phenomenon known as “green hushing.” Brands and businesses are choosing to keep quiet about their environmental achievements for fear of a negative spin in the public sphere. What few seem to realize is that the insistence on silence may be doing more harm than good, both for a business’s bottom line and the climate.

New survey data we commissioned from The Harris Poll indicates that 71% of U.S. adults say they’re more loyal to companies that take an active role in protecting the environment. Younger consumers take it a step further, with 68% of people between the ages of 18 and 34 saying they’re willing to pay more money for products from companies that have a strong stance on sustainability and climate change.

Nurturing and safeguarding the environment has only become more important as the effects of climate change become more severe, and clearly, consumers have taken notice. The survey also found that 79% of Americans believe corporations have an obligation to address climate change, and about four in five adults (82%) think companies have a responsibility to reduce and offset their carbon emissions.

This is not the time to downplay the great sustainability work your company may be involved in. It’s time to open a dialogue with your C-suite and make the case to publicly celebrate your environmental achievements. Because here’s the thing: You aren’t alone in your effort to improve the planet. According to a recent report from Climate Impact Partners, about two-thirds (66%) of all Fortune Global 500 companies have significant and clearly defined climate goals. They’re just not talking about it.

If companies involved in sustainability efforts were to talk more openly about the impact they’re helping create, they could influence other corporate leaders to take their engagement to the next level. We need all hands on deck amid this urgent fight against climate change. We can’t afford to have any business, brand, company or leader sidelined because they don’t have visible examples of success. The data shows consumers want to support vocal, conservation-conscious companies—and frankly, the climate needs it.

Of course, some private sector leaders might be hesitant to immediately go out and shout their sustainability efforts from the rooftops. One of the ways you can connect your climate goals with your audience is by bringing consumers along for the ride. When you communicate about your projects, remember it’s not just the final goal people are interested in. They want to know how you plan to get there, what resources you anticipate using and which experts you’ve consulted. Once you begin to make progress in your project, share those updates with your audience. People desire an understanding of the beginning, middle and end. Transparency in your process makes it easier to authentically establish trust with consumers. Sure, they might ask hard questions. They might demand more of you. But isn’t that a good thing? Ultimately, it’s going to take all of us to create a healthier home for future generations.

It’s also important to remember consumers aren’t your sole audience. Sustainability initiatives offer the opportunity to engage your current and prospective employees. Involve your team members in your sustainability efforts. By engaging them in the process, they can feel a sense of ownership in the initiative. They can feel part of a larger goal that is tangible and attainable.

The Harris Poll data also shows that 73% of Americans believe companies that talk about sustainability efforts are seen as leaders in their field. Participating in tree planting, reforestation and other forms of climate action could boost your brand perception and elevate your reputation. It could reap financial rewards for your business as you attract droves of climate-conscious consumers. And it could mean more attention and resources devoted to critical environmental initiatives. It’s a win-win for corporations and this planet we all share.

Dan Lambe is the CEO of the Arbor Day Foundation. He can be reached at dlambe@arborday.org. To see the original post, follow this link: https://www.forbes.com/sites/forbesnonprofitcouncil/2023/11/22/the-incredible-connection-between-consumer-loyalty-and-climate-responsibility/?sh=403c2d1b25e4


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Categories : Climate Change, corporate social responsibility, ESG, green marketing, reputation management, responsible brands, social responsibility, sustainability, sustainable branding, sustainable brands

1.5 Percent of Corporate Profits Can Transform the Fight Against Climate Change

8 06 2023

Image credit: Mika Baumeister/Unsplash

By Abha Malpani Naismith from Triple Pundit • Reposted: June 8, 2023

The current narrative on climate action puts the world in a bind. On one side, present-day action is considered inadequate to achieve the global warming limit of 1.5 degrees Celsius determined by the U.N. On the other side, there is increasing debate over whether that limit is even attainable.

This narrative is dubbed the “doom loop” in a recent report from the U.K.-based think tanks Chatham House and the Institute for Public Policy Research (IPPR). In the doom loop, the focus on crisis consequences and failure to reach targets takes away from the focus required to implement solutions.

In order to move forward, the narrative needs to quickly change to one that encourages action. TriplePundit spoke with Saskia Feast, managing director of global client solutions at Climate Impact Partners, about how collective private-sector action can help to catalyze that change — starting with Fortune Global 500 companies. 

We don’t need large investments to create change 

Fortune Global 500 companies made more than $2.2 trillion in annual profits over the last three years, according to a recent report by Climate Impact Partners. Investing only 1.5 percent of that — about $33.5 billion — to fund carbon reduction projects like forest conservation, reforestation and micro-renewables would be a massive step toward achieving the transformational change required to hit global climate action targets.

On average, each Global 500 company made $6.7 billion over the last year, according to the report. Committing 1.5 percent of those profits ($100 million) could cut 7.8 million tons of carbon emissions, plant 60,000 trees and protect 120,000 hectares of forest. If every company in the index did the same each year, it would amount to more than 2.6 billion tons in carbon reductions — even more than what scientists say is necessary to cap global temperature rise below 2 degrees Celsius. 

To put this corporate expense into perspective, on average the world’s largest companies spend 12 percent of their annual profits on research and development, 27 percent on sales and administrative expenses, 8.7 percent on marketing and 8.2 percent on information technology, according to the report. 

Offsets or no offsets?

For more than 20 years, Climate Impact Partners has worked with businesses to support over 600 carbon removal and reduction projects in 56 countries. But its work faces criticism around carbon offsets. 

“There is a lot of criticism of the companies who are taking action around offsetting carbon emissions and this idea that it is greenwashing,” Feast said. “By not criticizing the companies that are not taking action, those companies are feeling safer.” 

Saskia Feast, the managing director of global client solutions at Climate Impact Partners.
Saskia Feast, managing director of global client solutions at Climate Impact Partners. Photo courtesy of Climate Impact Partners.

Inaction on climate change could cost the global economy $178 trillion over the next 50 years, or a 7.6 percent cut to global gross domestic product (GDP) in the year 2070 alone, according to a recent report from the Deloitte Center for Sustainable Progress. 

Carbon offsetting is a long-debated method for companies and other large emitters to get involved. Supporters claim it is effective in reducing greenhouse gas emissions while conserving natural resources in sectors like transportation, energy and agriculture.

Some critics dismiss the practice as a flawed system that has negligible impact on reducing emissions. They argue offsets are generated by projects that enable polluting industries to continue their harmful practices. 

When a company first starts its carbon-neutral journey, it might need to offset a higher proportion of emissions, Feast said. But putting a price on it forces emission reductions over time. 

“Once you start putting a price on carbon, you start measuring it and looking for strategic ways to reduce it,” she said. “That helps you drive the internal reduction strategy or the adoption of renewable energy within your organization. The role of the offsetting market is just to help transition us to the low-carbon economy.”

The number of companies using, or planning to use, an internal carbon price increased by 80 percent over just five years, according to a 2021 report by the environmental disclosure management nonprofit CDP. 

The return on sustainability investments

Today, financial success and sustainable practices are increasingly tied to each other. “The business of sustainability reporting has improved dramatically over the last 20 years,” Feast said. “What we’re seeing now is companies including those metrics in their annual reports, like a carbon footprint or water use risk. So, the metrics are merging, which is a great development in the market. We’re seeing sustainability leaders, who are our clients, now working directly with investor relations, their CFO and financial teams.” 

The business case is stronger than before as company sustainability measures impact reputation, market value, and overall ability to attract and retain employees. And now there are many carbon footprint and ESG measurement tools that enable business leaders to truly consider how their operations impact people and the planet. 

Smaller companies can fight climate change, too

Investing in carbon reduction and removal is for every company — small, medium or large. Smaller companies that want to act don’t need a grand plan, Feast said. They can start making decisions in incremental steps like measuring their footprint, supporting renewable energy, making climate-friendly products, and discussing the price of carbon on their business.  

“We want to encourage companies to take action,” she said.”Get out there, start taking your steps and maybe one day run a marathon.”

COP28 Global Stocktake: Tracking progress to 1.5 degrees Celsius

As the baton moves from climate technicians to politicians at the COP28 Global Stocktake, which is also commented on with skepticism, policies driving increased financing of climate action could make a significant impact.

Emerging markets and developing economies must collectively invest at least $1 trillion in energy infrastructure by 2030 and $3 trillion to $6 trillion per year across all sectors by 2050 to mitigate climate change by substantially reducing greenhouse gas emissions, according to the International Monetary Fund.

An additional $140 billion to $300 billion a year is needed by 2030 to adapt to the environmental consequences of climate change, such as rising sea levels and intensifying droughts. This could skyrocket to between $520 billion and $1.75 trillion annually after 2050 depending on how effective climate mitigation measures are.

“One of the most important things is to move away from talking about climate financing — and actually doing the financing,” Feast said. “The more money we can put to finance these projects, the more we will be reducing emissions going forward.”

To see the original post, follow this link: https://www.triplepundit.com/story/2023/corporate-profits-climate-change/775241


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Categories : Climate Change, corporate social responsibility, ESG, social responsibility, sustainability, sustainable branding