Reaching ambitious climate goals requires a societal overhaul that will take individual, corporate and governmental action alike to lay a cultural foundation for a habitable planet.
70 percent of American consumers want corporations to address climate change. Yet only 32 percent of the Fortune 500 have committed to climate targets, with even fewer (barely 10 percent) following through by 2030.
REM talked to Austin Whitman, CEO of Climate Neutral, to talk more about how we can get corporations involved in funding viable climate programmes and taking action to reduce their own carbon footprints.
Can you give me some background about yourself and Climate Neutral?
Together with our co-founding organizations, BioLite and Peak Design, I launched Climate Neutral in 2019 after spending 15 years working in low-carbon finance and policy as a consultant and cleantech startup executive. Climate Neutral was founded to fill the need for a consumer-friendly climate label and an approachable, low-cost set of tools that companies can use to begin making carbon reduction a core part of their sustainability programs.
What will be involved in the kind of societal overhaul that needs to happen if we are to reach our climate goals?
Widespread clean electrification, investment in biodiversity protection, and new technology innovation, coupled with longer term large scale carbon removal projects. It is crucial to take an 'all of the above' approach and to undertake the transition across the industrialized world.
What is, or should be, the role of corporations in this?
We need to think of 'corporations' as having different roles depending on their sector. High-emitting industrial corporations have a responsibility to channel capital investment into low carbon alternatives (e.g,. cement, steel, utilities) and their immediate obligation should be thought of differently from consumer product corporations, whose responsibility is to ensure that a portion of their revenues are committed to accelerating the transition to net-zero within their operations and more generally across the world.
How many so far are taking this responsibility seriously?
Compared to recent years, many companies are now taking their responsibility more seriously, but need to go further by demonstrating actual investments are being made to accompany their long-term pledges. If a company is only pledging to take action in 20 or 30 years, or is only acknowledging responsibility for a narrow share of its emissions, then it is not taking the responsibility seriously.
What more can be done to recruit more corporations into taking a responsible role to activate this transition?
We believe that consumer pressure can have a meaningful impact on getting more companies to take the transition seriously, but that consumers need to be given simple ways to exert this pressure. Companies exist to serve their customers.
How can governments interact with corporations to ensure that they decarbonise swiftly and effectively?
Governments can adopt policies to make it more attractive for corporations to invest in low carbon assets and projects. Governments can also set timetables for corporations to achieve carbon efficiency benchmarks, and require companies to report openly on the carbon intensity of their operations.
What funding challenges do corporations face when contemplating decarbonisation, and how can they overcome them?
Corporations set budgets iteratively based on the last year's budget. Increasing funding for decarbonisation requires significant changes year-over-year, and thus these increases face high hurdles. Corporations should look to marketing budgets to support decarbonisation investments, knowing that their customers' preferences are changing.
In which countries are corporations becoming most effective with regard to decarbonising their operations, and why?
Some countries that have moved early into decarbonising their electric sector, like Costa Rica and the Nordics, have been able to support the growth of lower carbon businesses. But no major countries have fully made the transition.
Joe Biden says he wants to reestablish US leadership on climate, why should it be the US that leads climate action?
Because US economic influence is enormous, and our direct emissions are enormous, and there is no hope of global progress unless the US is at the table in a meaningful way.
What will the US have to do to establish such a climate leadership position?
Demonstrate that there will be political support for an ambitious decarbonisation agenda at the federal level regardless of which political party holds a majority.
What kind of policies is President Biden planning to introduce to move the US in this direction?
We've seen all that we're going to see, in various proposals to support clean electricity, fund clean infrastructure build-out, support more renewables, and expand ag-based carbon removals.
What are the prospects for success?
At the federal level, ambitious policies face limited prospects. More likely, we will see compromise that will limit the effectiveness of the policies, and make it necessary for a few states to chart the course.
Austin Whitman is the CEO of Climate Neutral. Having worked on climate for the last 17 years, he believes companies and consumers can and must do more. He lives near Boston in the company of two daughters, a wife, a dog, chickens, bicycles, and trees.
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