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Why every CEO must take action on climate change.

Let’s get one thing straight – climate change is real. And it can destroy your business and life on earth. I know it sounds dramatic but it’s true.

Putting aside the well-publicised climate denial of the 45th President of the United States whose views do not reflect the scientific truth on climate change, there is still hope.

Trump pulls the USA out off arms Climate deal.

Thankfully other world leaders are smarter and they recognise that we must take action to halt and hopefully reverse the impending environmental disasters that face us.

It’s not just the damage to the environment that we need to worry about. That’s bad enough, but it’s also the unknown global social and economic impact that many believe can cause irreparable damage.

Climate change is real 

There’s a growing body of evidence that supports the need for urgent action on a global scale. That’s because global temperature is projected to increase by 4.8 degrees by 2100. Scientists now almost universally agree that this must be pegged below 2 degrees to avoid widespread environmental, social and economic collapse.

If you think this sounds dramatic, just take a look at some of the research that’s out there. This recent article in Forbes Magazine (How does global warming affect the economy?) is well worth 10 minutes of your time.

Back in 1987, The Bruntland Report (aka ‘Our Common Future’) recognised the links between economics, society and the environment. It established the concept of sustainable development which it defined as;

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

So concern for the environment isn’t about tree huggers and ecologists who want to protect the habitat of a few endangered species. That’s obviously important but it goes far deeper than that.

The environment is at the centre of our very existence. And climate change is predicted to have widespread and potentially catastrophic social and economic impacts.

The recent front pages of some national newspapers looked scary. Images a giant burning sun and people dying from wild fires, heat exhaustion and drowning in flash floods and melting icecaps, looked like something out of a science fiction movie.

But it’s very real and it’s here now!

Results of climate change

What causes climate change?

There are many sources that explain this well such as The Royal Society’s, excellent primer and this piece from NASA.

Climate change (aka Global Warming) is caused by rising levels of carbon dioxide and other greenhouse gases, such as methane, which creates a ‘greenhouse effect’. This traps the Sun’s energy and causes the Earth, and in particular the oceans, to warm up.

Scientists have known about this greenhouse effect since the 19th Century. But now it seems the doomsayers are being proven to be right. Carbon dioxide levels have increased by almost 50% since before the industrial revolution. Other greenhouse gases have increased by similarly large amounts. All the evidence shows that this increase in greenhouse gases is almost entirely due to human activity and is caused by burning of fossil fuels for energy, agriculture and deforestation and the large-scale manufacture of products cement, chemicals and metals. This is based on climate science that’s sound and universally recognised.

A bold step forward?

The 2016 Paris Agreement on climate change is seen by many of us as a watershed moment in history. As of July 2018, it’s been signed by 195 countries who pledged to keep global temperature below 2 degrees. This is the agreement that Trump says he’ll pull the USA out of, making them the only country not to have signed!

As you’d expect though, this is not just about science, economics and politics are intricately woven into the mix to create even more complexity.

What can the CEO do?

Government policies can have an impact but they can take a long time. Urgent action is needed by business and every CEO should be held accountable for setting climate-related goals. They can do that by setting a Science-Based Target.

The Science-Based Target Initiative (SBTi) is a joint initiative of CDP, UN Global Compact (UNGC), World Resources Institute (WRI) and WWF. Its goal is to help organisations set ambitious and meaningful Green House Gases (GHG) reduction targets.

Science-Based Targets

This is not just good for the planet, it also makes perfect business sense. Companies that set science-based targets build long-term business value and safeguard their future profitability in four important ways;

  1. Drive innovation.
  2. Save money.
  3. Increase competitiveness.
  4. Build credibility and influence evolving public policy.

There are 3 kinds of GHG emission to consider as this graphic from Carbon Credentials shows:

Sources of GHG

Scope 1 – emissions that come from direct operation of a business. These include the energy consumed and this can be directly controlled.

Scope 2 – indirect emissions generated by e.g. energy producers and these can’t be directly controlled.

Scope 3 – indirect emissions that come from across the value chain mainly from suppliers. These can’t be directly controlled but they can be heavily influenced through collaboration. Scope 3 emissions are important because they often make up the largest portion of overall GHG footprint.

It’s all about the data

There are 15 different Scope 3 categories and each must be screened to determine their impact (materiality). This defines what should be reported on. This presents a big problem because this data sits within many different suppliers across the value chain.

Data comes from two sources – primary and secondary. Primary sources are direct from value chain partners and this is the best type of data to use. It’s also the most difficult to get. Secondary sources are from industry reports, surveys and statistics and this is less accurate and specific.

Solutions

A good way to get primary data is through a GHG assessment survey. But with potentially thousands of suppliers, this is difficult, expensive and time-consuming.

Rating platforms and data services can provide some of this data, but they have not generally been designed to do this, so they fall short in many areas.

What’s needed is a new kind of solution that combines the accuracy and clarity of a GHG survey with the power and scalability of Artificial Intelligence (AI). Only this kind of approach is really capable of meeting the challenge of gathering Scope 3 data that’s critical to developing and monitoring a successful SBT.

Over to you

If you’re a CEO and you don’t have climate targets you really should act fast. There are many great sources of advice and inspiration that can help you to kick start your own initiative.

Ignorance is not an excuse and neither is being too busy or having to build a business case. This really is a no-brainer and most forward-thinking CEOs are already fully engaged. This is no longer a ‘nice to have’ or an optional extra. It’s critical to our collective long-term survival and prosperity. Are you playing your part?

Ecodesk provides a solution that helps enterprises collect GHG data from across their value chain to support Science-Based Targets. More information is available here.

 

 

 

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