As some of the world’s top green executives, entrepreneurs, campaigners and politicians gather in London to discuss mainstreaming green business innovation, The Climate Group’s Corporate Partnerships Director Mike Peirce questions the kinds of business leadership that will limit global warming to maximum 1.5°C and achieve greater prosperity for all.
Ambition. Pace. Scale. That was the title of The Climate Group’s flagship business event at Climate Week NYC this year. And in the harsh light of last week’s special report by the Intergovernmental Panel on Climate Change (IPCC), with scientists warning of rapidly increasing impacts of global warming above 1.5° Celsius, and an Apollo scale effort required to prevent it, these are three key ways in which businesses can demonstrate leadership in the clean energy transition.
But what’s the day-to-day reality for companies as they face this potent blend of threat and opportunity? Many of the companies joining me at today’s BusinessGreen Leaders Summit will have views.
Five years ago, The Climate Group took a close look at the sort of leadership that was needed to drive the ‘Clean Revolution’, and identified five main actions:
- Develop disruptive low carbon innovation
- Embrace low carbon technology
- Reduce emissions now
- Align carbon with other drivers
- Open source your leadership
What’s clear is that the last five years have seen the commitment to action from business growing stronger and stronger. 130 companies have now had their science-based targets approved. Through our own initiatives, some 200 companies are opting for renewables (RE100), energy productivity (EP100) and electric transport (EV100) – helping to tackle the most significant contributors to business emissions.
These commitments have translated into significant reshaping of business strategy and investments. For example, DeutschePost DHL’s StreetScooter subsidiary is making electric vehicles and selling them to other logistics companies. Godrej Group has reduced its energy consumption by over 40% since 2011 by investing in energy efficiency. And helping to bring LED lighting into common use in cities and buildings worldwide – including 250,000 in New York City – Signify (formerly Philips Lighting) is on track to be carbon neutral in North America this year.
The commercial case for climate action is stronger than ever. Last month, along with case examples from Mars, Inc. and others, we released a report from RE100 and Capgemini Invent showing that on key economic metrics, RE100 companies outperform the market. This is not evidence of causation, yet it builds on the evidence from the last RE100 Progress and Impact Report, in which 88% of RE100 members responding to our survey said economic reasons had been a key driver for committing to 100% renewable electricity.
The Global Climate Action Summit saw the addition of new member companies to RE100, EV100 and EP100 from a wider range of countries and sectors – including large industrials in developing markets. Climate Week NYC saw the addition of many more. But for me, what really stood out from these new commitments were the stories of committed companies taking a highly collaborative, systemic approach to achieving their goals. More than just ‘open-sourcing leadership’ and sharing stories of success as we imagined five years ago, these businesses have recognized that no one single company can solve the market challenges represented by the clean energy transition, and are increasingly working with peers, suppliers, customers and policy-makers, to demonstrate demand and influence solutions in markets around the world.
Going beyond its RE100 commitment and demonstrating leadership in the transition to renewable electricity, Apple has worked closely alongside its manufacturing partners. Today, 23 of these companies in more than ten countries have committed to powering all of their Apple production with 100 per cent clean energy.
IKEA Group recently interviewed 14,000 of their customers in 14 countries to find out what gets people excited about climate action and how they can be motivated to do more. Today the company is sharing that knowledge with other businesses and policy makers.
And the Dutch wind consortium – consisting of RE100 members AkzoNobel, DSM, Google and Royal Philips - created two innovative joint power purchase agreements to source cheaper renewable electricity with lower risk. They received their first power in March 2018.
Amidst this sense of momentum however, we cannot hide from the need to step up. The surge in companies signing up to science-based targets provides a base level of commitment needed from every business. But to avoid 1.5°C warming, as urged by the IPCC, we need many more companies to go further and faster and by doing so demonstrate that the economic case is sound, inspire others to follow, and help unlock the barriers to further adoption of climate and energy solutions.
Here at The Climate Group we are refreshing our perspective on corporate climate leadership – reflecting the opportunities and the challenges of today. We need to shift:
- From discussing targets to implementing collaborative solutions;
- From disconnected innovations to joined-up energy smart strategies that connect electric vehicles, energy storage and the growth of a renewables grid;
- From a world of a few visionary leaders to one working across business and society with ambition, pace and scale.
Over the next 12-18 months, we will be hosting a series of leadership workshops and webinars with key stakeholders, and sharing the findings with our business members as well as the 200 plus ambitious governments in the Under2 Coalition. Our goal is to:
- Identify the principle features of leadership companies and spread the message to encourage and inspire others;
- Highlight the most significant barriers to action, in particular where collaborative action can make a difference;
- Work with our network of companies to support their efforts to lead at scale and speed.
We look forward to working with you on this effort to recalibrate the standard of corporate leadership on climate action. Let us know if you would like to be involved.
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