Quantis touched down in Phoenix between February 26–28 for GreenBiz 2019 to showcase how robust metrics are key for setting science-based targets, building ambitious corporate sustainability strategies, mitigating risk and driving transformative change along the value chain. The premier annual event for sustainable business leaders, the conference brings together the brightest minds in sustainability, technology and business for an unparalleled look into the pressing challenges, emerging trends and biggest opportunities in sustainable business.
Ahead of the event, Climate Strategy & Science-Based Targets Lead Charlotte Bande and Senior Sustainability Consultant and planetary boundaries expert Marcial Vargas shared the business case for integrating planetary boundaries into corporate sustainability strategies and how companies can start taking meaningful action now.
To secure a world that is an average of only 1.5˚C above the current temperature, we need to act beyond carbon.
Question: What is the business case for aligning corporate strategy with science-based sustainability goals?
Charlotte Bande (CB): Setting ambitious climate strategies has several potential benefits, including improved brand reputation, increased innovation and risk mitigation. A bold climate strategy allows companies to anticipate new regulations as well as limit the impact global warming can have on its activities, ultimately making them more resilient to change and boosting investor confidence. It also pushes companies to reach operational efficiency, leading to bottom line savings and increased competitive advantage. (Watch our Ready>Set>Go Beyond! webinar series to learn more.)
Marcial Vargas (MV): Pressure from investors is definitely a big one. We’re seeing more investors ask us how carbon and other topics can be assessed in their portfolios in order to inform decision-making and ensure that the companies they invest in are taking steps to address environmental risks. Having a strong sustainability strategy and science-based goals are also important for creating internal engagement and attracting — and maintaining — talent. Millennials and younger generations in particular want to work for companies that are aligned with their values and are taking action to create positive change in the world. Finally, if we want to secure the economy and the environment, business models will have to change. And the world is not going to wait for stragglers. It can feel overwhelming, but it’s also a great opportunity. Constraints can serve as a real catalyst for innovation and push employees to find new solutions to pressing problems.
Question: What is science telling us that has changed the urgency to act?
CB: The latest IPCC Special Report has served as a rallying cry for government, NGOs and businesses to accelerate greenhouse gas (GHG) emissions reduction to keep global warming below 1.5˚C. The report made a clear distinction between the outcomes of a 1.5˚C and 2˚C future, revealing that the impacts under a 2˚C scenario could be two to ten times worse. For example, 9% of the world’s population would be exposed to extreme heat waves under a 1.5˚C scenario. This number could jump to 28% with a 2˚C increase. Additionally, coral reefs are expected to decline by 99% in a 2˚C scenario, as opposed to 70–90% with a 1.5˚C temperature rise.
MV: Science has also been telling us that if we want to secure a world that is an average of only 1.5˚C above the current temperature, we need to act beyond carbon. Reducing energy and focusing only on carbon might not be enough. The other eight planetary boundaries (freshwater, ocean acidification, land-system change, nitrogen and phosphorus flows, biodiversity, novel entities, ozone depletion and atmospheric aerosol loading) are inextricably linked to climate change and need to be addressed alongside carbon if we want to preserve the whole environment. This idea isn’t necessarily new, but we now have a better understanding of how these different systems are intertwined.
Question: Setting science-based targets for climate change has become best practice for accelerating meaningful corporate climate action. What accounts for this monumental shift away from more incremental and benchmarking-based approaches?
MV: In the past, sustainability leaders didn’t know how to set targets. Companies set goals based on theories, hypotheses and what was perceived as attainable. But companies are made up of people and people like to be reassured. SBTs offer that reassurance. Similar to a financial budget, SBTs work by allocating the global carbon budget the world can consume by 2100 between sectors and companies, looking at how they plan to evolve and what reduction potential they have. This allows companies to define effective environmental strategies and action plans strengthened by a recognized scientific approach rather than a simple hypothesis.
Question: We’re now starting to see the same momentum gathering around other topics, such as water, biodiversity, land use and oceans. Why is it relevant and important for businesses to act beyond carbon?
CB: Climate change is only one of the many risks our planet faces. The nine planetary boundaries are interlinked and for the Earth system to function properly and thrive, all of its ecosystem services must be in a state of equilibrium. Ocean acidification is one example of this. Ocean acidification — chemical reactions that occur when CO2 is absorbed by seawater — is critical to the health of our oceans, supporting marine life and regulating climate, but as atmospheric CO2 increases, so do CO2 levels in the ocean. This increases the acidity of the ocean and makes carbonate ions, an essential component of sea shells and coral skeletons, less available as well as raises ocean temperature. These changes can have a profound impact on biodiversity and could even amplify climate global warming. This is why we can’t approach carbon in isolation. All of these different systems impact one another and we need to make sure we are not addressing only one part of the problem.
MV: What’s more, some sectors are very dependent on environmental services. Take the food and beverage sector, for example, which relies heavily on freshwater and pollinating agents. To ensure the continuity and resilience of the sector and the food system itself, it is critical for companies to preserve these ecosystem services. Without these services, the whole system falls down. Of course, this will vary by sector, but in general by focusing solely on carbon, companies are missing out on a major opportunity to safeguard the future of their businesses and the planet as whole.
Question: Realistically, how far away are we from being able to set SBTs beyond carbon? Can they easily be measured?
MV: For topics such as freshwater and land-system change, which are well-measured, targets are a very near-future reality. For other issues, such as ocean acidification or chemical pollution, we still have some ways to go. These are topics we don’t know as much about either because they haven’t been studied extensively or in the case of biodiversity, they are incredibly complex by nature. The work of the Global Commons Alliance and the recently launched Earth Commission will help bridge this knowledge gap in a pragmatic way to make sure that we start moving forward on these issues. It’s a huge undertaking and the amount of time needed for each topic will vary greatly, but this is a major step forward in being able to define targets on the other eight Earth systems.
Question: So, should companies wait for the science to catch up or can they start taking meaningful actions now?
CB: According to the IPCC, we only have 12 years to turn things around — companies cannot wait any longer to take action. While we may not have all of the science to support all actions, there is already plenty that can be done. For climate, companies can set Science-Based Targets to align with a 1.5˚C trajectory. To take action on water, companies should identify water-stressed sites in the regions where they work and partner with local stakeholders to implement water stewardship projects. Every action counts!
MV: The truth is, we don’t need a target to take action on these topics. The challenge is that these issues, unlike carbon, are very regional and cannot be managed at the corporate or even planetary level. And so, a regional approach is needed. Context-based water targets are a great example of this approach and what can be done without having the exact science. The idea is that even if companies don’t know what their individual level of reduction should be, they can use other types of assessments to look at the regional level and identify the main issues in the areas they operate. From there, they can work with other local stakeholders to collectively address these issues.
Mars and Kering are two companies that are already exploring how to take action beyond carbon. Mars has been working with WRI on what science-based targets could look like for water and Kering has been doing similar work on biodiversity, recently publishing a white paper on integrating the planetary boundaries framework into corporate decision making. Both companies are established leaders in the sustainability arena and are pushing for these kinds of targets having seen how science-based targets helped drive the sustainability agenda within their companies and foster internal engagement.
Question: Ideally, should organizations be setting targets and acting on all nine planetary boundaries? Or should they focus efforts on tackling the topics where they have the greatest impact?
MV: In a perfect world, companies would set targets for all nine planetary boundaries. But we also need to be pragmatic. We don’t have enough data at this point for this to make sense and environmental sustainability is still not a top priority for a lot of companies. If we really want to accelerate change and move as fast as possible, companies should focus on topics that are the most relevant for their business. These are pressing issues and we can’t wait for the science to get there or for the maturity we need to move on all nine planetary boundaries. So right, focus on what is important and do it as well as you can.
CB: When identifying actions to address topics beyond carbon, it’s crucial for companies to ensure that these efforts don’t produce unintended consequences for other planetary boundaries — for example, taking actions that reduce emissions but could significantly increase water pollution or biodiversity loss.
Question: How can we create a sense of urgency for companies to act beyond carbon?
MV: For companies that are largely focused on carbon, we need to help them see that we won’t be able to tackle climate change without addressing the other issues as well. If they’re sincere about carbon, that probably means they are sincere about the environment. If it is clear that taking action on other environmental issues will help support climate action, they will get it. For everyone else, the focus needs to be on building a business case for sustainability that makes it clear that environmental risks are real business risks that can be very expensive. There are still a lot of companies that don’t realize they are harming their own business by not acting on environmental topics. Cultivating a deeper understanding of how the Earth system works will help build a stronger business case, but pressure from peers is likely to give a lot of companies the nudge they need to act — whether it’s to stay competitive or maintain relationships and contracts. Companies can help catalyze change by taking a close look at their supply chains, identify who is already engaged or big enough to have an impact on the entire value chain and make sure that they are doing their best to improve and engage others.
Senior Sustainability Consultant
Senior Sustainability Consultant