Misaligned objectives in climate solutions

I've seen LinkedIn posts today lamenting the downturn in #CDP scores, wondering what it means and how we’ll assess climate performance going forward. Let me offer a different perspective. For those of us focused on real-world climate outcomes (setting aside, for a moment, those focused on corporate financial risk), the emphasis on entity-level frameworks—whether for target-setting or disclosure—was never the right foundation for driving or evaluating real climate outcomes. Even if ambitious and perfectly executed (which most are not), corporate commitments and disclosures cannot deliver the systems-level transformations needed to decarbonize our global economy. Real climate progress requires coordinated, sector-wide or economy-wide transitions—across electricity, transport, buildings, industry—integrating evolving technologies, engineering solutions, institutional reforms, public policy, and aligned financing strategies. These transformations *cannot* be achieved by the sum of individual targets/strategies, nor are they meaningfully captured—or incentivized—by existing disclosure frameworks. Consider the tech sector. Data centers could be powerful drivers of clean energy investment, grid modernization, and digital inclusion—especially in emerging markets. None of this would be reflected in footprint-based reporting. In fact, such metrics disincentivize companies from entering high-emissions markets where they could have the greatest impact. (indeed, many risk-assessment frameworks will have similarly perverse consequences of disincentivizing investments in vulnerable areas or areas where data is unreliable - rather than driving solutions in those places.) Similarly, V2G technologies can enhance grid resilience and accelerate renewable integration—but this too requires coordinated policy, infrastructure, and regulation across automakers, utilities, and governments. It’s a systems solution, not an individual one, and current frameworks neither incentivize companies to pursue it nor report on whether they do. We’ve spent years demanding and tracking corporate targets, only to be disappointed when they shift, disappear, or fail to add up. But climate action isn’t the sum of individual efforts, as these frameworks suggest. It’s about changing the systems that shape corporate decision-making. As systems transform, companies will change too—some as leaders, co-designing the solutions -- and others as laggards, forced to change as systems do. (*which goes back to my parenthetical above: if interested in a company's financial resilience more than real climate outcomes, then some disclosures could be helpful; CDP scores mainly report on how companies assess and manage risk, not on their performance. As I wrote yesterday, we often confuse/conflate financial resilience & risk management with real climate outcomes; the posts on CDP scores are a case in point.) Paul DeNoon Darius Nassiry Vanessa Fajans-Turner Columbia Center on Sustainable Investment

InfluenceMap's latest report looks at the climate policy engagement of c.300 of the largest companies in the world, all of whom have publicly committed to net zero or similar. It found that 58% of those companies are at risk of “net zero greenwash” due to their lack of support for – and, in many cases, opposition to – climate policies. https://bitly.ws/32K3P I suspect 58% is actually an under-estimate when you factor in companies’ indirect political footprint – ie., their trade associations’ lobbying. (InfluenceMap does take indirect engagement into account, but, for my money, they underweight it in their scoring system.) Trade association lobbying is to a company’s political footprint what Scope 3 emissions are to its carbon footprint. We know that Scope 3 emissions often dwarf Scopes 1 & 2. Corporate climate commitments that ignore Scope 3 are therefore, rightly, seen as inadequate. We should be similarly sceptical about companies that fail to clean up their indirect policy engagement, even when their direct policy engagement is overwhelmingly positive. Consider a few examples of companies that, according to the methodology used to calculate that 58% figure, are NOT at risk of “net zero greenwash” due to their policy engagement: The Coca-Cola Company: of the 14 associations linked to them in InfluenceMap’s database, none scores well enough to be rated as “aligned” with the Paris Agreement. The majority are what InfluenceMap calls “partially misaligned”, while 4 – including the notoriously anti-climate U.S. Chamber of Commerce – are plain old “misaligned”, which is a polite way of saying they are actively harming humanity’s chances of limiting global warming to well below 2°C. DuPont: linked to 12 associations, of which 3 are misaligned and 7 are partially misaligned. A whopping 2 out of 12 score highly enough to be rated as aligned. Meta: linked to 13 associations, of which 6 are misaligned and 5 are partially misaligned. 2 are aligned. Novartis: linked to 9 associations, of which 5 are misaligned, 1 partially misaligned and 3 insufficiently active to be assigned a score. Saint-Gobain: linked to 6 associations, of which 3 are partially misaligned and 3 are misaligned. Siemens: linked to 30 associations, of which 9 are misaligned, 5 aligned, and the rest either partially misaligned or inactive.   In sum, when you look at the indirect policy engagement of these 6 supposedly “good” companies, in all cases, at least 1 in 4 of their trade associations is lobbying in a way that actively undermines our ability to keep global warming well below 2°C. Of their combined 84 affiliations, just 9 are with associations whose lobbying might actually be improving our chances of staying well below 2°C. My takeaway from this is that ALL companies need to get a handle on what their trade associations are up to on climate policy, even if – perhaps especially if – their direct policy engagement is consistently pro-climate. Ed Collins Dylan Tanner

🌍 By Lisa Sachs 💡 ”The way we are approaching, encouraging, and #NetZero—through NDCs, corporate targets, and carbon accounting—is not just inherently insufficient, it is actively counterproductive. 🎐 Net zero is an atmospheric imperative. Achieving it requires: • Decarbonizing the world’s energy, industrial, and food systems • Enhancing the absorptive capacity of the world’s carbon sinks 🔖 Transforming these systems requires: • Clear roadmaps • Technological innovation • Adequate public and private finance • And coordinated action among public and private actors across sectors, borders, and value chains Our dominant frameworks—focused on individual country and corporate target-setting, measurement, and accounting—falsely assume that systemic, regional, and sectoral transitions can be delivered by the sum of individual targets and plans. This flawed logic disincentivizes the coordination needed. Rather than identifying an entity’s leverage to address systemic barriers to decarbonization, both countries and companies, which cannot decarbonize on their own, purchase offsets so they can methodologically “claim” to be net zero while continuing to emit, increasing rather than decreasing atmospheric GHGs. This has also led to a reliance on credits to fund nature-based and technological solutions that need substantially more and reliable financing. We’ve built an entire architecture around the wrong unit of ambition and analysis, and we are now fixing symptoms (to make the accounting more credible), not confronting the underlying structural misalignment. Accelerating climate action requires decisively shifting from individual targets to coordinated, transformative planning and implementation. This means: 🔁 Prioritizing and supporting Long-Term Low-Emission Development Strategies (LT-LEDS), which are inherently more ambitious and pragmatic than NDCs. 🛤 Supporting scenario planning and sectoral roadmaps, not just insisting on more ambitious NDCs and FF phase-outs. In many EMDEs, there aren’t clear technical roadmaps for how FF-based energy can be replaced reliably and financed affordably. 🤝 Facilitating coordination across regions, value chains, and stakeholders, not emphasizing individual action. 💸 ensuring adequate and affordable financing for the necessary transitions. (Note: private capital doesn’t move because of better carbon accounting, risk metrics, or pressure. It moves when transitions become financeable: - Enabled by clear roadmaps and aligned policy and regulations - Structured through investable market design by coordinating demand and supply - Supported by public finance and tailored risk mitigation) As we head into New York Climate Week, I hope we focus less on statements of ambition (NDCs and corporate targets) and more on rigorous, technically grounded transition pathways—and the collaborative, cross-sector engagement required to deliver them. The stakes are too high to keep solving the wrong problem.”

“Ireland remains a laggard within the EU in terms of climate policy implementation. To date, we have been ineffective in achieving our climate targets because of both policy misalignment and prioritisation of corporate interests over the public good. From energy to agriculture, from expanding data centres to intensifying meat and dairy production, we are not on track to meet our emissions targets because policies continue to incentivise carbon-intensive growth and private sector profits rather than investing in the needs of communities… To balance the interests of multiple and sometimes conflicting stakeholders, the State has often engaged in decisions, actions, and policies that are systematically in conflict – a documented phenomenon known in social science as ‘organised hypocrisy’… Ecologically, we hold the dubious distinction of being the country in the world with the worst wetlands depletion of any nation in the world and the worst level of destruction of our native forests. Further, the country is not on track to meet its commitments under the Paris Agreement and is facing fines totalling millions of euros as a result… A reorientation of our economic and social systems toward public investments to support more local, regenerative, and community-focused production of food, energy, and other necessities is essential. A focus on regenerative (rather than extractive) investments in people and communities will not only improve human wellbeing and restore social cohesion but also bring back ecological health of our land and water… While the business-as-usual, organised hypocrisy approach has achieved gains for some Irish people in the past, for a healthy and stable future there is an urgent need and a current window of opportunity for Ireland to demonstrate climate justice leadership by focusing on policy alignment and public community investments.” Great piece and call to action from Jennie C. Stephens and Orla Kelly PhD. Ireland has an incredible opportunity, and responsibility, to lead on delivering a climate transition centred on justice. But our current approach risks business-as-usual and sustainability-as-usual. https://lnkd.in/eEUEiiPy

🌍 Poor planning is threatening climate resiliency worldwide. Fewer than 1-in-6 nations have sufficient alignment between their adaptation plans and their decarbonization goals. Here's why that's a big problem... In the fight against climate change, National Adaptation Plans (NAPs) and Nationally Determined Contributions (NDCs) are the bridges between local resilience efforts and global goals. 𝐌𝐢𝐬𝐚𝐥𝐢𝐠𝐧𝐦𝐞𝐧𝐭 𝐜𝐚𝐮𝐬𝐞𝐬 𝐬𝐞𝐯𝐞𝐫𝐚𝐥 𝐢𝐬𝐬𝐮𝐞𝐬: 1️⃣ Diminished Impact: When strategies (NAPs) and climate goals (NDCs) connect, nations get better outcomes. Without alignment? Gaps, inefficiencies, and weaker results. 2️⃣ Duplication: Misaligned plans waste time and resources. Avoid fragmented efforts. 3️⃣ Funding Blockers: Financial actors need clear, credible plans to allocate capital. Vague or contradictory plans stall capital flows. 4️⃣ Lack of System-Wide Change: Climate change doesn’t respect borders or silos. Poorly integrated plans = less resilient communities. 𝐓𝐡𝐞 𝐫𝐞𝐚𝐥𝐢𝐭𝐲 𝐜𝐡𝐞𝐜𝐤 According to the UN Environment Programme Adaptation Gap Report 16% of countries fully align their NAPs and NDCs. 68% show partial alignment. 16% don’t align at all. Misalignment risks slowing progress on our Paris Agreement goals. We can’t afford that. What Can Be Done? 1️⃣ Use NAPs as the foundation for NDCs. 2️⃣ Synchronize timelines for plan updates. 3️⃣ Foster collaboration between NAP and NDC teams. 4️⃣ Leverage aligned plans to secure climate finance. 𝐖𝐡𝐲 𝐧𝐨𝐰? The stakes are high—food insecurity, livelihoods, and economic instability are all on the line. With the next NDC updates due in 2025, there’s an opportunity to close the gap and build resilience worldwide. Aligned strategies don’t just meet targets—they save lives. 🌏💡 Let’s act today for a better tomorrow. What strategies do you think could help close this gap? Share your thoughts below! 👇 #ClimateAction #Adaptation #Resilience #ParisAgreement #SustainabilityGoals

𝗥𝗶𝘀𝗸𝘀 𝗳𝗿𝗼𝗺 𝗺𝗶𝘀𝗮𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 𝗼𝗳 𝗯𝗮𝗻𝗸𝘀’ 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝘁𝗵𝗲 𝗘𝗨 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗼𝗯𝗷𝗲𝗰𝘁𝗶𝘃𝗲𝘀: 𝗔𝘀𝘀𝗲𝘀𝘀𝗺𝗲𝗻𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗮𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗘𝘂𝗿𝗼𝗽𝗲𝗮𝗻 𝗯𝗮𝗻𝗸𝗶𝗻𝗴 𝘀𝗲𝗰𝘁𝗼𝗿 by European Central Bank Transition #risks arising in the context of a move toward a decarbonised #economy refer to the potential negative impacts on a financial institution’s #credit portfolio. These risks emerge owing to changes in the economic landscape as #society shifts away from carbon-intensive #industries towards cleaner and more #sustainable practices. As the #transition to a decarbonised economy progresses, corporations in energy or carbon-intensive #sectors may face growing #challenges, which can make them more likely to default on their #financial obligations or increase the loss given default through reduced collateral value. Assessing alignment is broadly accepted as an approach for identifying and quantifying banks’ transition risks.Through alignment #assessment, the compatibility of banks’ #financing of physical production capacities with the #ParisAgreement can be determined in a forward-looking manner. Alignment refers to the percentage difference between the #production plan of a #corporation and production that is aligned with a #pathway aimed at achieving the Paris #climate goals. #KeyTakeaways 🏦 The risks stemming from the transition towards a decarbonised economy can have a significant effect on the credit portfolio of a financial institution. If the transition towards a decarbonised economy becomes disorderly, there will be a growing need to quantify the transition risks in banks’ credit portfolios. 💸 Based on forward-looking production data for assets within the sectors most impacted by the shift towards a low-carbon economy, this report assesses the risk stemming from the (mis)alignment of banks’ financing with EU policy objectives. 🏦 The euro area banking sector shows substantial misalignment and may therefore be subject to increased transition risks, and around 70% of banks are also subject to elevated reputational and litigation risk. 💸 A more in-depth analysis reveals the underlying factors contributing to the elevated transition risk in credit portfolios, which largely stems from financing counterparties that are either too slow to phase out their high-carbon production capacities or too slow to build out their renewable energy production capacity. 🏦 Banks can apply the approach used in this report to further develop their alignment assessment capabilities to help determine the transition risks they face as well as meet the impending disclosure requirements under the European Banking Authority’s Implementing Technical Standards (EBA ITS) on Pillar 3. The #download link of the #report: https://lnkd.in/d9feBTFg