It is a well known concept in business that you can’t manage what you don’t measure - and this is no different for a company’s GHG emissions. Corporate disclosure on climate risk and GHG emissions will become mandatory. Investors are already moving their portfolios away from high-polluting companies, which are expected to be heavily impacted by the growing wave of climate regulation. BlackRock, the world’s largest asset manager, is now pushing its companies to have net-zero by 2050 targets, and has indicated it will divest from those that don’t. Further, companies with higher ESG ratings tend to consistently outperform their peers. Consequently, there is currently an influx of capital looking for green business to invest in. Investors will increasingly favor businesses taking climate action.
AGENDA TAKENOTE FULL
It has already made the full transition from a black to green energy company and is thriving. When it comes to climate, companies like Orsted are a great example of the benefits of taking decisive action. As climate regulation is implemented, any business that is not already decarbonizing will begin to lose market share and miss out on the time and opportunity to grow and innovate. It will be far more costly for companies that have to make this transition abruptly rather than taking time now to strategize and prepare. Companies that wait will end up going the way of Blockbuster or Kodak - both of which did not adapt to digitalization and got left behind. Delayed action is a business risk.Ĭompanies that fail to take climate action soon are risking that their products and services will become unviable. These companies and others have committed to achieve their targets through corporate initiatives like the Business Ambition for 1.5☌ campaign, the Climate Pledge, and the SME Climate Hub for small- and medium-sized enterprises. Many major U.S. companies are already aligning their business strategies with net-zero emissions by 2050 or sooner, including Amazon, Apple, Ford, Microsoft, Walmart, Uber, and Verizon. This gives businesses clarity on where and how to implement net-zero solutions across entire value chains. firms will be best positioned to thrive if they integrate science-based emission reduction targets aligned with limiting global warming to 1.5C into their strategies now. How can companies get ahead of this regulation? U.S. With a Democrat-led congress in place, national goals will be more seamlessly translated into concrete regulations and incentives, and companies will be required to align their strategies accordingly.
In the U.S., the Biden-Harris administration is expected to set targets to reach net-zero emissions by 2050, in addition to interim milestones to meet by 2030, as part of the country’s contribution to the Paris Agreement. The EU is committed to more than halving emissions by 2030, for example, and the UK has set 2030 as an end date for sales of new petrol and diesel cars. The effects of climate change are already being experienced in many parts of the world, and climate-related regulations are already being implemented. The global trend toward net-zero is inevitable.
climate leadership: Climate regulation is on the way. Here are seven implications for business leaders in this new era of U.S. For both U.S. business, and any business operating in the U.S., the message is very clear: To survive and thrive in the net-zero future, now is the time to scale up climate action. With the U.S.’s renewed commitment to climate action, over 70% of the global economy has now set, or is intending to set, targets to reach net-zero emissions. Growing evidence shows that investment in “green” industries like electric vehicles and renewables will be a better way to boost GDP as we emerge from the Covid-19 crisis.
Executive orders recently signed by President Biden put the environment squarely at the heart of U.S. federal policy, and for good reason. The future competitiveness of the U.S. economy is at stake, and climate action is an effective way to boost jobs, prevent future systemic shocks, and secure a prosperous future.
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