What it takes to be a corporate climate leader
Making sustainability core to business strategy and aligning corporate sustainability and government relations teams helps companies deal with short-term crises such as the novel coronavirus (COVID-19).
Companies vying for climate leadership had better get in line. From Microsoft to Starbucks, there’s no shortage of organizations coming out with bold sustainability commitments — including net-positive, carbon-negative, science-based and all other manner of hyphenated ambition. Businesses seem to be stepping up to prioritize the climate crisis as never before.
This is good news, considering the bad news from the Intergovernmental Panel on Climate Change (IPCC) that we have less than 10 years to take the necessary actions to limit warming to 1.5 degrees Celsius and avoid climate catastrophe. But climate leadership is about more than setting voluntary sustainability goals, developing clean energy projects or even establishing multi-billion-dollar climate funds — it’s about being willing and able to apply the full force of your purpose in the policy realm.
"Climate leadership means policy leadership," Victoria Mills, managing director at Environmental Defense Fund told me earlier this month at the Climate Leadership Conference in Detroit. "It’s time to shift the conversation from ‘what can we do’ to solve climate change to ‘what will it take.’ It’s going to take bold public policies to achieve net-zero emissions by 2050, and business voices are critical in calling on governments to act."
Finding a voice for climate
Many, if not most, companies are failing to align their corporate sustainability and government relations agendas. A company, for example, might make a strong climate commitment but then support legislation favoring the fossil fuel industry, which cancels out any climate benefits they’ve created.
Nobody understands this phenomenon better than Bill Weihl, executive director of the freshly formed ClimateVoice, who formerly led sustainability initiatives at Facebook and Google. Weihl founded ClimateVoice to mobilize the voice of the workforce to urge companies to go "all in" on climate — both in business practices and policy advocacy.
And to carry Weihl’s superhero metaphor, I’d add that with great power comes great responsibility, as Spider-Man might attest. If a company has the power to advance sensible climate policy — yet does nothing — it might as well be one of the bad guys.
Pathways to corporate climate policy leadership
EDF recently published a new framework aimed at helping companies to uplevel their advocacy game. The AAA framework for climate policy leadership helps companies advocate for policies consistent with achieving net-zero emissions by 2050, align trade associations’ climate policy advocacy with the goal of net-zero emissions by 2050 and allocate advocacy spending to advance climate policies — not obstruct them.
"The AAA framework is a simple and straightforward way to make sure your corporate sustainability and government affairs teams are pulling in the same direction," EDF’s Mills said.
Another way companies can assert climate leadership is by joining with the nearly 4,000 cities, states, universities and other businesses in the We Are Still In coalition, formed by Michael Bloomberg and former California Gov. Jerry Brown in the wake of President Donald Trump’s withdrawal from the Paris Agreement. The group represents 68 percent of the American GDP, 65 percent of the population and 51 percent of greenhouse gas emissions.
"An amazing groundswell of city, state and business action on climate is underway across the United States and has the potential to deliver significant emissions reductions," said Carla Frisch, principal at Rocky Mountain Institute, a partner of We Are Still In and part of the Bloomberg-funded America’s Pledge initiative, which seeks to quantify the impact of the actors in that coalition and other subnational coalitions.
Making climate core to business and policy strategy
One of the best ways companies successfully can align corporate sustainability and government relations programs is by making sustainability central to business strategy and ensuring that each function is held accountable for delivering on clearly communicated goals. Otherwise, this can lead to fragmented priorities.
"True climate leadership is to move beyond compliance, embed sustainability into your core business strategy, and take it a step further and set aspirational goals and think about the maximum impact you can have directly or indirectly," said Paul Camuti, executive vice president and chief technology and strategy officer at Trane Technologies, formerly Ingersoll Rand. "It’s not having all the answers — necessarily — but putting a stake in the ground, and challenging what’s possible for a sustainable future and committing to being the solution."
Camuti added that it helps to have a strong purpose and mission to guide business. Without a clear and articulated purpose, it’s increasingly difficult to get everyone on the same page.
"Our role in advocating for climate policy revolves around informing and educating policymakers at all levels about smart energy usage and reducing greenhouse gas emissions," he said.
Another approach for aligning corporate sustainability and government relations teams is having them report to the same authority. At Vail Resorts, for example, the sustainability, government relations and community relations teams all ladder up to legal.
"For us, that creates alignment between team members and allows us to communicate with our stakeholders more efficiently, with a more comprehensive view," Kate Wilson, senior director of sustainability at Vail Resorts, told me at the Climate Leadership Conference.
In addressing the climate crisis, for example, the sustainability team works to drive progress toward reaching Vail’s Commitment to Zero goals, collaborating with government affairs to advocate for bipartisan climate legislation and with community relations to engage in essential collaboration with resort communities.
"Companies can have the most impact when corporate sustainability and government relations teams work together as an integrated team fully aligned on sustainability and environmental priorities," Wilson said.
And there is a clear business benefit to having a stable federal climate policy. "Having fragmented climate policies, state-by-state, versus one unifying federal policy is challenging for us," said Bob Holycross, vice president of sustainability, environment and safety at Ford Motor Company during a panel at Climate Leadership Conference. A strong federal climate policy creates the predictability companies such as Ford need to make necessary investments in the future, he added.True climate leadership is to move beyond compliance, embed sustainability into your core business strategy, and take it a step further and set aspirational goals.
During the same panel, Christopher Benjamin, director of corporate sustainability at PG&E, concurred. "The business voice is very critical. The Paris Agreement was a watershed moment where the business voice was amplified. We can help frame climate change from a standpoint of risks: economic impacts and opportunities."
The future of climate leadership: policy action now
Making sustainability core to business strategy and aligning corporate sustainability and government relations teams helps companies deal with serious shorter-term crises such as the novel coronavirus (COVID-19), while maintaining momentum for addressing the longer-term — and ultimately more existential — threat the climate crisis poses to people, the planet and the economy.
"We can’t afford to have another lost decade when it comes to addressing the climate crisis," said Sen. Debbie Stabenow (D-MI) at Climate Leadership Conference.
The time is now for companies to unite their commitment to corporate sustainability with meaningful advocacy that advances policies aligned with a 1.5 degrees C future and secures climate justice.
"A focus on operational sustainability was the leadership we needed in the last decade," ClimateVoice’s Weihl said. "Throughout the next decade, companies must step up and show their support for public policies that drive broad climate action, even when those policies don't lead to near-term direct benefits to the company."