Against the backdrop of record-breaking temperatures and the relentless surge of extreme weather events, the call for urgent climate action is more imperative than ever before. Innovation Forum's spring conference on climate action for business brought together leading experts and professionals to discuss the challenges and opportunities in translating climate commitments into tangible actions.
The discussions at the conference carried a clear undertone of urgency, emphasising the need to accelerate and scale efforts to meet net-zero targets and drive effective change. Experts discussed the impact of net-zero targets on sourcing practices, sustainable procurement's role in supply chain engagement, the significance of supply chain data in driving sustainable transformation, and the implications of mandatory climate disclosure on business.
From commitments to action: net-zero roadmaps
The conference opened with a session highlighting the significance of net-zero targets, with more than one-third of the world's largest companies now committed to achieving them.
While these commitments are commendable, there is growing consensus that many brands are lagging in their efforts to meet these ambitious goals. Experts stressed the need for organisations to establish clear and credible short-term and interim targets that drive urgency and maintain accountability.
How effective are policy tools?
There was a consensus that mandatory climate disclosure requirements, such as those from the EU's Corporate Sustainability Reporting Directive and the US Security Exchange Commission, companies are now under pressure to report on scope 3 carbon emissions, energy use, climate risks and mitigation strategies. Effective disclosure can enhance reputation and attract responsible investors – after all, as was said more than once at the conference, “we can only manage what we can measure”.
However, concerns were raised that these disclosure requirements are inadvertently delaying concrete decarbonisation actions. With the company-level disclosure approach focusing too granularly on emissions attribution. To achieve comprehensive systems-level change and reach decarbonisation goals, stakeholders need to be focusing on broader economic system changes. Alternative policy instruments, such as the US Inflation Reduction Act, which inject capital to scale effective solutions, can play a pivotal role in driving the necessary transformation.
During discussions, speakers emphasised the need for a comprehensive approach that combines carbon removals and emissions reductions. We heard case studies of nature-positive production, which harnessed regenerative agriculture principles, to actively remove carbon from the atmosphere, enhance soil health and promote biodiversity.
2022’s biodiversity COP15 was cited as a turning point, highlighting the need to move beyond carbon-centric perspectives and give biodiversity a seat at the table of the global climate action agenda. While there remains more work to be done on nature-positive production, the increasing corporate commitments to the preservation and enhancement of biodiversity alongside emissions reduction, signals a moment of progress in our collective response to the climate crisis.
VCM under fire
Voluntary Carbon Markets (VCMs) offer valuable mechanisms for companies to support nature-positive initiatives and offset unavoidable emissions. Inevitably, scepticism remains regarding the credibility of some projects. Hence, rigorous due diligence into methodologies and verification processes will be vital to ensuring their integrity.
Carbon credits are not a standalone solution for net zero goals but can be a valuable tool to complement other emission reduction efforts, once feasible measures are in place.
Conference participants discussed some innovative financing options that promote equitable sharing of decarbonisation costs among stakeholders, preventing an unfair burden on suppliers. Procurement experts stressed the importance of tailoring engagement, providing capacity-building support, and implementing incentive structures for sustainable practices. Suppliers actively engaging in climate efforts can be rewarded with longer commitments and better payment terms.
Climate justice was also a key theme highlighting the urgency of addressing the disproportionate impact of climate change on vulnerable communities. Business leaders discussed how they can take responsibility to protect the rights of workers and communities heavily reliant on carbon-intensive industries through a “just transition” climate action plan.
Measuring and reporting
Measuring, monitoring, and verifying scope 3 emissions remains a core challenge for organisations. Experts stressed the importance of employing accurate and standardised methodologies to effectively assess these emissions. By understanding their scope 3 emissions, companies can identify the most impactful areas for mitigation efforts and set science-based targets in line with SBTi guidance.
As businesses face increasing reputational risks and regulatory scrutiny due to the EU Green Claims Directive, the need for authentic and credible communication with consumers regarding climate matters has become paramount. During the conference, speakers shared insights on how establishing credible claims committees can ensure transparent and trustworthy messaging, fostering consumer trust in the process.
The way forward
The climate action conference emphasised the urgent need to translate climate commitments into tangible actions. While net-zero targets are becoming the norm, organisations share concerns about meeting these ambitious goals. To drive effective change, clear short-term targets, equitable financing, and policy instruments are crucial.
Nature-positive production and voluntary carbon markets can offer valuable mechanisms to remove emissions, but credibility is key. Additionally, working with suppliers across the value chain is essential.
Finally, while measuring and reporting scope 3 emissions is challenging, it holds merit for benchmarking against progress, as long as it doesn't distract from on-the-ground implementation.
Join Innovation Forum in Washington DC on 8th and 9th November as we continue these vital conversations on climate action. We’ll be sharing best practices and assessing how business transformation, supply chain innovation and low-carbon solutions can deliver results on the ground. Find out more here.