The Next Economy
What the Black Friday Climate Report Means for Companies

The federal government hoped its Black-Friday release of a landmark report on the regional impacts of climate change might mitigate its media attention. It hasn't really worked: The report is still in the headlines over two weeks later. It’s not just consumers that care. A recent NAEM trends report found that in boardrooms across the country, companies are committing to addressing the climate challenges of our time by setting and meeting ambitious climate goals.

NAEM surveyed corporate leaders of environment, health and safety from across industry sectors and found that 66 percent of companies they work for publicly report their Scope 3 emissions. A full 65 percent are using science-based targets to set greenhouse gas emissions reductions goals and 63 percent are aligning their company's targets with the UN Sustainable Development Goals.

These new greenhouse gas commitments are the natural progression of the goal-setting process, which many companies started decades ago.

One respondent from a retailer explained in the report: “We had a 45 [percent reduction in absolute carbon emissions] by 2020 goal and we achieved that last year.” That goal was then increased to a 60 percent reduction by 2020. “Once we hit the 60 percent goal, I’m sure we’ll set another one. We now kind of have the trajectory mapped out [to carbon neutral by 2050] so, hopefully, it will be easier.”

Many other organizations are wrestling with setting new, ambitious targets for the next few decades. For some, this is easier because the organization has been through the process already. For others, it’s a little more challenging because the pressure is on: There’s no more low-hanging fruit and new emissions cuts will require bigger modifications.

Now that the public is watching, advancing climate reductions is all the more important. In this recent research period, NAEM found that companies are going public with their concerns about climate change: 48 percent support public policy to address climate change and 42 percent publicly state that climate change is a business risk.

These public commitments are no laughing matter. A decade ago, companies were reluctant to make public commitments on climate change because it was seen as a move that might offend customers or shareholders. Now, the urgency of the problem is upon us — and not only do companies see a responsibility to work toward change, they understand that inaction is actually a riskier position. That’s because the biggest impacts of climate change — from stronger storms to flooding to fire and drought — represent real risks to the bottom line. By making public commitments to address climate change, companies are protecting their shareholders.

While the NAEM report uncovered big commitments, big science-based-targets, and goals set and reached, unfortunately it isn’t enough. Given the urgency of the needs, the report also documented the growing awareness that deeper, systemic changes will be necessary — and soon. As the report explains, “The next phase will require EHS&S professionals to roll up their sleeves (again) and provide the expertise to make increasingly stringent goals that deliver business results, too.”

In addition to setting and meeting big renewables commitments, companies must think outside the box and pursue other more creative strategies to make deep cuts. Two of the biggest strategies EHS&S professionals will need to employ in the coming years are ‘net positive’ products and ecosystem valuation.

Moving from carbon neutral to net positive requires a systems-thinking approach. As Janine Benyus asks, “What would nature do?” In nature, waste equals food. On a planet with way too much carbon dioxide in the atmosphere, we need to seek natural and commercial ways to “draw down” carbon. Recent examples include Interface's Proof Positive carpet tile, made up of plant-derived carbon converted into a durable material, which stores that carbon for at least a generation; a carbon-negative fuel called NextFuel made from elephant grass, which stores roughly 20 percent of the CO2 it absorbs in its roots; and a revolutionary polymer in development for construction applications that can grow, strengthen and even repair itself by absorbing CO2 from the air. We need all companies to consider how their products can be carbon sinks.

Another idea is ecosystem valuation — putting a cost to the ecosystem services a company uses for free. Many NAEM survey respondents have started this process, with 26 percent using or evaluating ecosystem services valuation or other formal programs to recognize the value we gain from nature.

The recent climate report is scary, just like the last few dozen. This moment in time requires companies to use bold strategies — to become environmental enrichers, rather than depleters. Net-positive products and ecosystem service valuation are two tools companies can use to get us there, but the real change will require courage and innovative thinking inside organizations. People will ultimately shift these organizations toward the change they must seek.