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Report Report

Report Report: Ending deforestation, net-zero carbon, supply-chain sustainability and more

The Report Report is a monthly wrap-up of recent research on sustainable business and clean technology produced by Corporate Eco Forum, a by-invitation membership organization comprised of large, global companies that demonstrate a serious commitment at the senior executive level to sustainability as a business strategy issue.

2019 Emissions Gap Report (UN Environment) finds that global temperatures are expected to rise by 3.2°C even if all current unconditional commitments under the Paris Agreement are implemented. The report finds that global GHG emissions must decrease by 7.6 percent each year between 2020 and 2030 in order to get on track towards the 1.5°C goal.

Accelerating America’s Pledge (America’s Pledge initiative) finds that American coalitions of states, cities, businesses, and others committed to climate action in support of the Paris Agreement now represent 68 percent of U.S. GDP, 65 percent of U.S. population, and 51 percent of U.S. emissions. The report also finds that key economic sectors, states, cities, and businesses are adopting actions that would reduce U.S. emissions 19 percent below 2005 levels by 2025 and 25 percent below 2005 levels by 2030.

The Art of Alignment: Sustainability & Financial Transparency (SustainAbility) provides insight into the trend toward alignment of sustainability and financial transparency and offers guidance on best practices to help sustainability practitioners advance their company’s approach to transparency. The report also includes a roadmap to help sustainability practitioners achieve better alignment of their companies’ sustainability and financial transparency.

Asset Managers and Climate Change: How the Sector Performs on Portfolios, Engagement and Resolutions (InfluenceMap) finds that 15 of the world’s largest asset management groups are misaligned with the targets set out by the Paris Agreement in “significant portions of their portfolio holdings” covering the automotive, electric utilities, and fossil fuel production sectors. The analysis finds that the smallest gap between an analyzed group’s actions and the targets of the Paris Agreement was 16 percent, while the largest gap was 21 percent.

Changing the Chain (CDP) analyzes climate, water, and deforestation-related data from nearly 7,000 suppliers around the world to highlight the progress companies and their suppliers have made in building sustainable supply chains. Key findings included the following:

  • Participating suppliers reported $906 billion in potential financial risk linked to climate change.
  • Participating suppliers reduced 563 million metric tons of CO2 collectively in 2019. However, only 29 percent reported absolute decreases in emissions and 4 percent reported having a renewable energy target in 2019.
  • Suppliers reported $15.8 billion in financial risk linked to deforestation. However, only 27 percent of suppliers have zero deforestation policies in place.
  • Suppliers reported $78 billion in financial risk linked to water security.
  • 95 percent of CDP members believe suppliers showing environmental leadership are more competitive, with only 5 percent stating that in their experience such suppliers are more costly.

Electric Vehicle Penetration and Its Impact On Global Oil Demand: A Survey of 2019 Forecast Trends (Columbia University’s Center on Global Energy Policy) finds that battery packs for electric vehicles will become cost competitive with the internal combustion engine without government subsidy in 2025, yet the share of electric vehicles in the global passenger vehicle fleet is “not projected to be substantial before 2030 given the long lead time in turning over the global automobile fleet.” The report also finds that passenger vehicle oil demand will likely decline beyond 2025, with no available forecasts showing growth.

The Future of Food (Forum for the Future) finds that 55 percent of the food companies analyzed have made efforts to increase the availability of plant-based products for consumers. The report also makes five recommendations to accelerate the shift to a more sustainable global food system.

Management Quality and Carbon Performance of Transport Companies (Grantham Research Institute on Climate Change and the Environment) finds that 35 percent of transport companies have emission reduction plans consistent with the national pledges made under the Paris Agreement. However, the report finds that only 19 percent of transport companies have emissions reduction plans in line with a path to keep warming to 2° Celsius or below.

The Net-Zero Challenge: Global Climate Action at a Crossroads (World Economic Forum) assesses the progress corporations, governments, and civil society have made to address climate change in line with the Paris Agreement. The report finds that climate action needs to move at a much greater scale and faster pace, citing that 67 countries— accounting for less than 15 percent of emissions — have committed to achieving net-zero emissions and only one third of the approximately 7,000 companies that report to CDP fully disclose their emissions.

No Wood for the Trees (CDP) assesses how well aligned 22 consumer goods companies are with the zero net deforestation commitments set out by the Consumer Goods Forum. Key findings included the following:

  • The zero net deforestation commitments set out by the Consumer Goods Forum will not be met by 2020.
  • None of the companies assessed have complete traceability of palm oil and cattle to plantation/farm of origin.
  • 45 percent of companies reported revenue dependencies of at least 20 percent on palm oil.
  • Current certification and traceability systems are not effectively addressing the issue of deforestation. Certified volumes account for just 20 percent of global palm oil production.
  • 8 out of the 22 companies are deploying landscape style approaches or regenerative agriculture.
  • Danone, Nestlé, Unilever and L’Oréal received the highest scores for their governance of deforestation risk. Restaurant Brands International, Tyson Foods and Kraft Heinz received the lowest scores. 

Running the Risk: How Corporate Boards Can Oversee Environmental, Social and Governance (ESG) Issues (Ceres) provides recommendations to help corporate directors understand how to identify and manage ESG risk and highlights the important role boards can play in addressing ESG issues as part of their risk oversight role. The report identifies three main categories where corporate board directors can integrate ESG factors into their risk oversight role: Identification, assessment, and action.

Seven Challenges for Energy Transformation (Rocky Mountain Institute) identifies seven challenge areas in the global energy system that could go through rapid change within the next decade. The seven areas included the following:

  1. Making emissions visible
  2. Tripling energy productivity gains
  3. Electrifying with renewables
  4. Reinventing cities
  5. Boosting clean technology
  6. Redesigning industry
  7. Securing a swift and fair transition

Sustainable Investor Poll on TCFD Implementation (Global Sustainable Investment Alliance) finds that 59 percent of surveyed investment professionals are “very” or “somewhat” dissatisfied with publicly-traded companies’ climate-related disclosure. The report also finds that 34 percent of survey respondents have already incorporated TCFD disclosures into their investment analysis, while an additional 26 percent of respondents report they plan to do so in the near-term.

Understanding Climate Risk at the Asset Level (S&P Global and DWS Group) found nearly 60 percent of companies in the S&P 500 and more than 40 percent of companies in the S&P Global 1200 holding assets at high risk of physical climate change impacts.

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