By Meg Szabo, Bloomberg Live
The Bloomberg Sustainable Business Briefing: Accelerating Climate Action October 7 virtual event brought together leaders from business, finance and nonprofit sectors for a series of conversations examining how they can work together to create meaningful progress and an effective response to the threats of climate change.
Click here to view video of the full discussion.
- Helen Clarkson, CEO, The Climate Group
- Filip Engel, Vice President of Sustainability, Public Affairs, Branding and Marketing, Ørsted
- Maria Mendiluce, CEO, We Mean Business Coalition
- Daniel Shurey, Vice President, Sustainable Finance Americas, ING Capital LLC
- Kate Wilson, Senior Director of Sustainability, Vail Resorts
- Mallika Kapur, Deputy Global Editor, Bloomberg Live
- Leslie Kaufman, Reporter, Bloomberg Green
- Akshat Rathi, Reporter, Bloomberg Green
2020 has been a watershed year for climate action, with the Covid pandemic providing an unexpected opportunity for climate change. Maria Mendiluce, CEO, We Mean Business Coalition, kicked off the event stating, “through the Covid pandemic, the world has realized that the climate crisis could be bigger than the Covid pandemic, and that we need to get ready.” Helen Clarkson, CEO, the Climate Group, agreed, adding that this is the moment for climate action. “We’re seeing this really interesting emergence of some kind of consensus finally that there’s a way you can tackle the environment and jobs in a cohesive, strategic, systemic way.”
With the Climate Group managing some of the largest corporate global initiatives and climate action commitments, including RE1000, EP100 and EV100, Clarkson stated that ambitious targets are a key component for accelerating climate action. “We definitely want companies making commitments when they don’t know how to get there. That’s what leaderships is, and it’s not empty because what we find is when you set that big audacious goal, particularly when it comes from the CEO, that gives a very important internal signal within that company that this is what we’re going to do, and it really opens up the space for innovation.” Mendiluce shared an example from IKEA. “The CSO told me when they came up with the EV target, they had no clue how we were going to make it. But they achieved it five years in advance.”
Clarkson concluded by highlighting the importance of policy incentives in driving business action, using electric vehicles as an example of how well it can work. “We look a lot at the interaction between markets and policies, we bring together these big demand-side commitments and then we use those both to say to the supply side, ‘you need to provide more vehicles,’ but also say to governments, ‘if you change these policies, actually you will accelerate the market.’ So for EVs we’ve been pushing very hard for bringing forward the end date at which combustion engines will be sold. A lot of governments have set a 2040 date, we’re campaigning to bring that forward to 2030. And it’s those incentives where you can see the businesses are leading on this agenda and understanding how you can help use policy to shape markets to allow businesses to achieve what they need to do.”
Mendiluce ended on the importance of including these incentives in the economic stimulus packages that governments are currently considering. “We have done a study to analyze how to provide incentives to the stimulus packages, and the five measures that we have included are investing in renewable energy on the grid, electric vehicles, energy efficiency and natural climate solutions.”
The second panel of the Bloomberg Sustainable Business Briefing: Accelerating Climate Action featured sustainability leaders from Ørsted, Vail Resorts and ING Capital LLC.
Filip Engel, Vice President of Sustainability, Public Affairs, Branding and Marketing, Ørsted, kicked off the session sharing their sustainability journey. “At Ørsted we have transformed in a decade or so, being totally based on fossil fuels, coal, oil and gas to today being totally dedicated to green energy. We have done that by closing down our coal plants, we have divested oil and gas, and we have built up an offshore wind business and have become the world’s leader in offshore wind. At the same time, we are focusing a lot on onshore wind and also solar energy and storage.
Engel also highlighted the importance of ambitious targets. “Our biggest contribution in accelerating climate action is taking a lead in developing offshore wind as an industry, and that is by setting ambitious targets. We scaled offshore wind much faster than we thought, we also thought it would take a long time to bring down the cost of offshore wind, but by scaling the technology we managed to bring down the cost of electricity of offshore wind to make it cheaper much faster than anyone thought. So, just between 2012 and 2017, the price of offshore wind fell almost 70% and today it’s cheaper to build offshore wind than coal and gas–fired power plants, then the same goes for onshore wind and solar, too.”
Kate Wilson, Senior Director of Sustainability, Vail Resorts, also shared how they used setting ambitious goals as part of their sustainability strategy. “In 2017 we announced our commitment to zero, so that’s our commitment to a zero net operating footprint by 2030 across all 37 of our resorts, which includes a commitment for zero net emissions, zero waste to landfill and zero net operating impact of forests and habitat.”
She also discussed the importance of collaboration, sharing a few partnerships, including working with Ørsted on a new wind turbine farm that came online this June. “Once it’s operational for a year next summer, it will address more than 90% of our North American scope 2 emissions.”
Vail Resorts has also partnered with PepsiCo and TerraCycle to create Adirondack chairs and patio future as well as a terrain park from recycled chip and snack wrappers. “Working together and partnering and pushing each other is a really important part of that acceleration for us.”
Daniel Shurey, Vice President, Sustainable Finance Americas, ING Capital LLC, highlighted the key ways financing institutions can address climate action. First, “financial institutions need to look at themselves to make sure that their own footprint is Paris-aligned.” Second, “thinking about what we don’t finance. Exclusion criteria on certain sectors and certain activities that will never get us to where we need to go.” Lastly, focusing on what areas you do finance. Shurey said, “this is where we believe ING can make the most impact. You need to look at every single sector, you need to work out exactly what each sector needs to do to be able to align to a Paris-based future, and then you need to look at the technology and financing gap of where companies are today versus where they need to go. We use things like thematic financing, green bonds, sustainability bonds and, more recently sustainability-linked loans and bonds as well as a way to incentivize corporates to really get on track to Paris.”
Engel underscored the importance of policy action now. “Governments have played a huge role in making the cost of green energy come down and making it cheaper than fossil fuels. It would not have happened without other governments subsidizing the first years of the life of green energy.”
Wilson concluded with her thoughts on what it will take to address climate change. “Setting bold goals and then partnering with communities, other companies, governments and cities so we all can move forward together. It’s time to think big and bold and take action and work together to figure out how we will get there.”
Shurey added, “I think the key question is not what is the reward for doing this, but what is the financial penalty for not taking climate action seriously. And when we get to the stage where the financial markets are thinking more along those lines, then we know that we’ve made serious and decent progress in this space.”
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