The disparity between what many political leaders promise and their actions has been particularly stark when it comes to the climate crisis.
In recent years, this gap has widened. In order to be on track to deliver on their most recent climate pledges, G7 and BRICS countries needed to reduce their carbon emissions by 822 million tonnes in 2019, the most recent year for which countries have reported. Instead, reported emissions from these nations increased by 256 million tonnes.
In the absence of concrete action by governments, many corporations have stepped up to show that they can lead by example in the race to net-zero. These corporations top Corporate Knights’ 2022 Global 100 list of the world’s most sustainable corporations, which launched this week.
Following through on ambitious science-based targets has been central to these companies’ success. Executives from 10 companies leading on sustainability convened online to mark the release of the 18th annual Global 100 and offered advice for how business and political leaders can follow their lead.
“Stop ‘green-wishing,’” Minna Aila, a senior vice-president of sustainability and corporate affairs at Neste Oyj, told the online panel of executives. “Setting ambitious goals is important, but companies and countries alike must shift the focus from ambitions to actions; from plans to progress; [and] from dreams to details.”
Here are five ways companies can deliver on the pledges they’ve made:
1. Think short-term
Most targets laid out by governments and corporations involve reaching net-zero by a date decades in the future. India has said it won’t reach net-zero until 2070. Arçelik AS, a Turkey-based appliance manufacturer which placed 57th on the Global 100, thinks more short-term. Hakan Bulgurlu, the company’s CEO, said Arçelik has started measuring its decarbonization progress on a weekly basis. “The abstract term of a date – 2030 or 2040 – puts too much distance between us and what needs to be done,” he said. There are only 415 weeks until 2030. Chop chop.
2. Decarbonize your supply chain
An important part of any serious decarbonization plan is tackling the emissions in a company’s supply chain that aren’t a direct result of its operations or energy use. Vestas, the world’s most sustainable company on the Global 100 this year, has been working with its suppliers to achieve this goal. The company’s CEO, Henrik Andersen, said this has involved teaming up with partners and suppliers in research and development. “It’s a no-brainer to us,” he said.
Ørsted – a Danish energy company that ranked number one overall in 2020 and was seventh on the Global 100 this year – has published a guide for governments and businesses on how to reach net-zero, which highlights the importance of creating a roadmap for supply chain decarbonization.
3. Keep your team accountable
Many companies are tying compensation for executives to climate targets. From 2019 to 2020, the number of corporations linking bonuses and pay to sustainability goals doubled, according to the Financial Times. This approach dangles a nice incentive in front of senior management to have the planet top of mind when making decisions.
4. Invest in climate solutions
Companies need to put climate solutions at the heart of their economic growth strategies. This means investing in climate solutions that in the long run will also make companies more profitable, panellists said. “At the end of the day, it’s a good business story. There are higher returns if you’re more sustainable,” said Christophe Beck, the CEO of Ecolab.
5. Don’t be scared of regulation
Bulgurlu says business leaders need to encourage regulation all around the world to make sure emissions shrink everywhere. “This fear of regulation, which is kind of engrained in the capitalistic system that regulation is bad, is wrong in this case,” he said.
While many corporations are pouring resources into climate solutions, some are failing to match their lofty commitments with action. It will be up to both business and political leaders to ensure that this “say–do gap” is eliminated so that we can all arrive at a greener and more prosperous tomorrow.
According to the UN Environment Programme, “if every company and country can reduce their emissions by 7.6% every year between 2020 and 2030, we can limit global warming to 1.5°C.” While countries’ total emissions are rising, the 10 companies that joined the Global 100 panel have reduced their emissions by 9% over the past year, in line with a 1.5°C trajectory.
|Global 100 Company||Year over Year GHG Emissions Change*|
|Vestas Wind Systems A/S||-33%|
|Schneider Electric SE||-34%|
|City Developments Ltd||-27%|
|Johnson Controls International PLC||-14%|
|McCormick & Company Inc||-5%|
|Vitasoy International Holdings Ltd||9%|