By: David Wei, Managing Director, BSR
When the Paris Agreement was being completed in 2015, the watchword of the day was climate ambition. Ambitious national pledges are essential to reaching the Agreement’s goal to hold warming well below 2°C and pursue 1.5°C. And if we do not close the gap between pledged ambition and the Paris targets in this Decisive Decade, we will forego those goals and suffer the consequences.
Over the past five years, Paris-aligned ambition has become a de facto standard in sustainability. Not only do stakeholders expect companies to take climate action—as 1,350 companies with a market capitalization of US$25 trillion have done with the We Mean Business coalition—they expect companies to set Paris-aligned emissions reduction targets. The Science Based Targets initiative has commitments from nearly a thousand companies, and Business Ambition for 1.5°C counts nearly three hundred aligned with the Paris 1.5°C stretch goal.
But if these ambitious climate targets do not feed a wider shift in the economy toward business success, better jobs, and shared prosperity, companies will not continue to implement them. And unless companies transform into net zero businesses, these targets alone will not persuade governments to make more ambitious national pledges. That is why we need—and we are beginning to see—a great shift from climate ambition to climate action.
Collaborating across industries will also be essential to reduce emissions across the entire economy. Transform to Net Zero is a cross-sector group of leaders delivering an inclusive net zero economy through accelerated business transformation, innovation, and systems change.
This shift is exemplified by the corporate announcements made during the 2019 UN Climate Action Summit, including the Net-Zero Asset Owner Alliance, a group of institutional investors aligning their portfolios to net zero emissions, and the Getting to Zero Coalition, dedicated to deploying commercially viable deep sea zero emission shipping vessels by 2030. These multistakeholder initiatives are implementing net zero goals in specific industries. And to reach net zero emissions, we will need many more of them to overhaul value chains across the economy.
Collaborating across industries will also be essential to reduce emissions across the entire economy. Transform to Net Zero is a cross-sector group of leaders delivering an inclusive net zero economy through accelerated business transformation, innovation, and systems change. By leading by example, they will demonstrate the transformation of corporate strategy and other company functions, innovate to remove barriers to net zero value chains, scale capital investment, and support ambitious public policies. BSR is proud, as the initiative’s Secretariat, to foster impactful collaboration with them.
Transform to Net Zero does not ask companies to announce yet another climate commitment; indeed, many of the companies involved already have extraordinary ambitions: take, for example, Microsoft’s commitments to be carbon negative across the value chain in just 10 years, to remove its historical operational carbon emissions by 2050, and to establish a US$1 billion climate innovation fund. Or Unilever’s recent announcement to achieve net zero emissions from all its products in less than 20 years and establish a EUR€1 billion Climate & Nature Fund. Instead of seeking new commitments, Transform to Net Zero enables all companies with net zero targets to implement them and all companies without such targets to act. To scale impact as widely as possible, all of Transform to Net Zero’s outputs are intended for the public domain.
In the Decisive Decade, this is the kind of collaboration that must flower—focused on transforming businesses and deploying all corporate functions to build net zero value chains.
This spike in company ambition is big enough now to dent the global emissions trajectory. Equally striking, it has taken place during a weakening regulatory environment. The G20 economies are conspicuously absent from governments intending to strengthen national targets at next year’s UN Climate Conference. This gap in national leadership makes business action, not just ambition, even more urgent as people around the globe suffer from increasingly devastating climate impacts.
In the Decisive Decade, this is the kind of collaboration that must flower—focused on transforming businesses and deploying all corporate functions to build net zero value chains. The day that net zero is not a press release but a business model is the day the Paris goals become achievable. Making this a business norm as soon as possible is critical because we have no time left.
Originally appeared on BSR.