Remember the revisions to The Business Roundtable Statement on the Purpose of a Corporation (a mission statement) back in August 2019? The CEOs of the top 200 companies in the U.S. redefined “purpose” away from the 1997 statement that focused on “shareholder primacy” to a 21st Century focus on “all stakeholders â customers, employees, suppliers, communities and shareholders.”
Some of the CEO signatories are now among the corporate leaders who participated last week in “LEAD on Climate 2022,” a large-scale business lawmaker education and advocacy event organized by Ceres, a leading sustainability non-profit organization. The participating companies included more than 100 large companies and investors that employ three million people in all 50 states, and total US$1.6 trillion in annual revenue and $4.6 trillion in assets under management.
This was the fourth such meeting of corporate influentials and legislative leaders under the banner of the LEAD coalition. Representatives from the participating companies met with congressional leaders in two days of virtual forums and called on the U.S. Congress to pass a comprehensive legislation package that includes funding for cleaner energy, transportation, infrastructure, environmental justice, and advanced manufacturing investments.
Susan Nickey, Chief Client Officer of Hannon Armstrong, a leading investor in climate solutions, said, “We are coming to LEAD on Climate 2022 because it is long past time for Congress to move forward on ambitious climate legislation that will supercharge the shift to a more sustainable and competitive business environment, helping companies and the country meet their climate goals while delivering economic gains across the United States.”
Looking beyond the U.S., where are we on global climate action for reducing greenhouse gas (GHG) emissions? Corporate Secretary magazine reports that in 2021 global companies with combined valuation of US$35 trillion had created emissions reduction targets or other commitments to cut in half their emissions by 2050. This report is based on research from the Science Based Targets Initiative (SBTi), which many companies sign on to as formal commitments. At the end of 2021, says SBTi, 2,253 companies in 70 countries and 15 industries (combined, more than 1/3 of corporate valuation) had “approved” 1,082 emissions reductions targets or commitments.
About half of the targets set by corporations align with the effort to keep global temperatures at 1.5C. SBTi says two-thirds of companies with such targets intend to cut emissions at a higher rate than required as part of the Paris Agreement on limiting global temperature increases. Between 2015 and 2030, most companies aligned with the 1.5C target will be cutting their emissions more aggressively.
We are sharing details of these reports from Ceres and Corporate Secretary in our Top Stories for you. While we have a challenging journey ahead in addressing rising temperatures, the good news is that corporate leaders are beginning to take important steps forward. The team at G&A looks forward to keeping you updated on further progress by companies and investors working to address this critical situation.