Aligning CSR with Global Climate Agreements

If your business isn’t prepared to disrupt itself for our planet, the planet will disrupt your business. At a UNGA Goals House panel, industry leaders didn’t mince words. They laid out bold, transformative strategies for businesses that want to survive and thrive in the era of climate action. Sharing key takeaways herein: 1. A unified approach to financial and non-financial data: This aims to normalize carbon accounting, making it as central to decision-making as revenue or costs. Imagine if every business prioritized emissions and nature/biodiversity data the way they prioritize profit. 2. Big Tech as Energy Producers: Major tech companies are some of the world’s largest energy consumers, especially with the growth of AI and quantum computing. But what if they became leaders in the renewable energy transition? With their purchasing power, these tech giants have the potential to not just consume clean energy but to drive investment in it. This could be a tipping point for clean energy on a global scale. 3. Embedding Sustainability in Culture + Incentives: Some organizations are making it clear—sustainability must be woven into the fabric of an entire company; it’s about aligning incentives, from leadership to frontline employees, with emissions reduction and climate goals. When sustainability is tied to performance and compensation, it moves from a “nice to have” to a business-critical priority. 4. Transforming (Not Just Improving) Supply Chains: One company highlighted the need to stop thinking about incremental improvements and start reimagining supply chains entirely. True climate action might mean disrupting long-standing relationships or processes, but it’s this willingness to drive systemic transformation that’s necessary for real progress. 5. Regulation vs. Transformation: Regulations are powerful, but transformation plays an essential role in creating long term value. The insight shared was balancing the power of markets and transformation with the need for regulatory frameworks to drive widespread adoption. This was notably one of the most provocative debates in the room. 6. Tackling the “Too Big to Solve” Mindset: It’s easy to feel overwhelmed by the scale of climate challenges, but the panelists were optimistic. Their message? Even the biggest sustainability problems can be solved with ambition, innovation, and collaboration. From decarbonizing heavy industry to reshaping supply chains, the key is to break these challenges into actionable steps and leverage the power of digital technologies to make progress. Businesses need to think bigger, act faster, and integrate sustainability at every level. How is your organization addressing these challenges? Let’s connect and share strategies on how we can drive meaningful, systemic change together. #Sustainability #SupplyChain #Innovation

A science based target is key but not yet enough. Every GHG emission you don’t compensate for drives climate change, its impacts, and the harm it does to the people and places we all care about.  - Emissions are not the impact that regulations like #CSRD and #CSDDD really prompt us to address, they are a driver. The impacts are severe weather, wildfires, heat stress etc. Remember the order of events is roughly: (1) Business activities cause GHG emissions → (2) Increased atmospheric GHG concentrations cause warming → (3) Warming drives climate change and its impacts like hurricanes, floods etc. Therefore there are three corresponding avenues to address the impacts of climate change arising from your emissions: (1) Reducing emissions, (2) compensating for the global warming impact of emissions added to the atmosphere, and (3) supporting adaptation to the impacts of climate change. Even if you’re a rare rockstar company reducing your emissions inline with a 1.5C science based target, you still have residual emissions every year. Those emissions increase atmospheric GHG concentrations, contribute to global warming, and inflict the same social cost of carbon as any other GHG emission. The additional socio-economic costs that will be incurred in a BAU vs. 1.5C scenario between 2025-2100 has been estimated at $1,266 trillion, but even the 1.5C scenario has costs. Now, we should argue about prioritization, and the quality of carbon credits today etc., but programs and policies that don’t ALSO make or incentivize investments in compensation and adaptation at all are allowing the harm from gigatons of residual emissions to go unaddressed. While simple, I think this concept has large implications for the interpretation of CSRD, CSDDD, and what makes a leading climate transition plan. Meanwhile perhaps the worst thing a company can do is wait. Salesforce has separate targets in all three areas. I hope others can use this logic to join and surpass us. (Note, this ignores the question of if we should focus on our own emissions, or global emissions. See my pervious posts on that. Here I assume the current focus on individual emissions responsibility.) Tim ChristophersenAlexia KellyDonna LeeKaya AxelssonJohan FalkScience Based Targets initiativePeter BrowningLuke Pritchard Carbon Market WatchNewClimate Institute https://lnkd.in/gW76b765 https://lnkd.in/gTEckt_d

The #COP28’s global stocktake https://lnkd.in/eCBWGnrv highlights increased concern over the threat of climate change, and recognizes the need for transitioning away from fossil fuels. Of the stocktake’s 196 paragraphs, I highlight 2 relevant to implementation in the private sector. Paragraph 70: “recognizes the role of the private sector and highlights the need to strengthen policy guidance, incentives, regulations and enabling conditions to reach the scale of investments required to achieve a global transition towards low greenhouse gas emissions and climate-resilient development and encourages Parties [i.e. countries] to continue enhancing their enabling environments”. For the broad financial sector, paragraph 96: “Emphasizes the role of governments, central banks, commercial banks, institutional investors and other financial actors with a view to improving the assessment and management of climate-related financial risks, ensuring or enhancing access to climate finance in all geographical regions and sectors, and accelerating the ongoing establishment of new and innovative sources of finance, including taxation, for implementing climate action and thus enabling the scaling down of harmful incentives”. Multiple jurisdictions (albeit in a less-than-coordinated way) have begun increasing regulatory requirements, as well as market demand (not only from investors, but also from customers, employees, local communities), etc., to take into consideration climate change and other factors outside traditional measures of financial performance. A company’s executives, and in particular its board of directors, cannot ignore aspects of #sustainability and a range of different understandings and expectations of the Environmental, Social and Governance components. (I prefer not to try to artificially group these categories together; especially in light of the intense current focus on E, with more limited appreciation for corporate Governance). Working in large part in Germany over the past decade, I was involved in implementing Corporate Social Responsibility disclosures and have witnessed the evolving trend (as well as massive governance failures missed by #ESG metrics, but that is another story….). Last year’s revamp of the German Corporate Governance Code (“voluntary” but in fact a “comply or explain” regime for public companies) added sustainability elements. One new recommendation for board directors: “The Supervisory Board’s skills and expertise profile shall also comprise expertise regarding sustainability issues relevant to the enterprise.” I am thus pleased to have been among the first to obtain formal certification from the #DeutscheBörse (my former employer) as a Supervisory Board Expert on the topic of Sustainability/ESG (with a large focus on evolving climate change disclosure obligations). I look forward to applying this, and continuing advocacy for further strengthening of corporate governance.