The climate crisis needs climate leadership from businesses now

As the world grapples with the effects of the COVID-19 pandemic, racial inequality and more, the impacts of climate change cannot be ignored. Most weeks bring fresh headlines of wildfires, droughts and rapidly melting ice caps. They’re a reminder that climate action cannot wait for calmer times.

Encouragingly, the COVID-19 pandemic has not diminished the recognized need for bold climate action and actually has strengthened resolve among citizens, companies, governments and investors to drive real progress. Consequently the need to develop a robust leadership position on climate action is more urgent than ever and central to any company’s strategic vision.

Companies can harness this moment to join the race to zero and set a course out of the crisis though climate leadership. For a business to be considered a leader on climate it must respond to the climate crisis with ambition, deliver on that ambition with action and speak up to secure wider change through advocacy.

This means aligning corporate ambition with the best available climate science, setting a target to reach net-zero emissions by 2050, at the latest, and setting strong interim targets to get there through the Science Based Targets initiative (SBTi).

Companies then need to identify and implement action to deliver on their ambition, including engaging with supply chains. The small and medium sized enterprises (SMEs) that make up the supply chains of many of the world’s largest companies can access help in setting and achieving climate targets through the new SME Climate Hub. Companies also need to be transparent about progress toward their goals through disclosure and reporting.

Beyond that, companies need to advocate for climate action at all levels of government, to industry peers and trade groups, ensuring alignment with lobbying practices and net-zero targets.

Companies are stepping up

The good news is many of the world’s largest companies are already stepping up their ambition.

Just this month, companies including PayPal, Walmart, Ford and Facebook have increased their level of climate commitment, announcing bold strategies to accelerate the zero-carbon transition. To date, nearly 300 companies have joined the Business Ambition for 1.5 Degrees C campaign, led by SBTi, including those in hard-to-abate sectors such as the world’s largest cement maker, LafargeHolcim.

LafargeHolcim’s commitment represents real ambition. The company is not only aligning its own 2030 decarbonization pathway with the goal of limiting global temperature rise to 1.5 degrees Celsius, it also is helping to develop a pathway for the entire cement sector, in conjunction with the SBTi. It is clearly the kind of leadership the world needs.

Meanwhile, Amazon is taking action against its bold commitment to be carbon-neutral by 2040. Just this month, the online retail giant launched a new program to help make it easier for customers to switch to more sustainable products through labeling and certifications, Climate Pledge Friendly. Last month, the company announced it is buying 1,800 electric delivery vans from Daimler AG’s Mercedes-Benz, building on its previous deal to buy 100,000 electric vans from Rivian Automotive out to 2030.

And companies including renewable energy pioneer Ørsted recognize the importance of working with governments to accelerate climate action and speaking up to make it clear they support bold climate policies.

“It’s quite clear that governments cannot do it alone, and companies cannot do it alone. We need to work together. Governments need to set ambitious targets for carbon reduction and renewable energy deployment and create the visibility needed for companies to deploy the vast amount of capital and drive the innovation that is needed to further mature and scale renewable energy and to further bring down costs,” said Jakob Askou Bøss, senior vice president at Ørsted.

These are some examples, but we want to see many more. We urge all companies to engage with these three A’s: ambition; action; and advocacy. Our new guide, Climate Leadership Now, outlines how companies can progress their climate strategy towards a climate leadership position fit for this decisive decade. Now is the time to join the Race to Zero and show leadership in the global effort to tackle the climate crisis.

Now is the time for companies to lead on climate, to lead us out of this crisis.