Comment: Dan Bakal of US sustainability non-profit Ceres reflects on Climate Week NYC 2020 and how the big net-zero commitments from the likes of Walmart, Morgan Stanley, Uber and Microsoft demonstrate how the unprecedented events of this year have woken companies up to the urgency of the climate crisis
As the virtual dust settles after this year’s Climate Week NYC, it is clear that the Covid-19 pandemic has not weakened corporate ambition to tackle the climate crisis. In fact, it has strengthened it.
This past year has revealed just how vulnerable our society is to systemic risks and the dangers of ignoring science ‒ and how critical global cooperation and leadership from the private sector is. At Ceres, we’ve found that this year’s unprecedented global challenges are waking more companies up to the urgent need to act on climate, and pushing those already acting further along the road to leadership.
At the end of 2019, nearly 500 companies had committed to net-zero emissions targets. By the end of Climate Week just last Sunday, that number had tripled. Some 1,500 companies ‒ large and small and from virtually every sector imaginable ‒ have set goals to reduce their emissions to reach net-zero.
Morgan Stanley set a net-zero by 2050 target for its financed emissions, aiming to align its portfolio with the Paris Agreement
The most ambitious net-zero goals are ones that include interim science-based reduction targets and don’t rely on carbon removal to meet their goals. Retail mammoth Walmart hit both those marks last month, setting a net-zero by 2040 target for its direct and indirect (Scope 1 and 2) emissions (which includes all of its operations), including interim targets. This is positive progress, even though the lion’s share of the company’s emissions are Scope 3, or supply chain emissions, which the company acknowledges need to be addressed. Finance giant Morgan Stanley set a net-zero by 2050 target for its financed emissions, aiming to align its portfolio with the goals of the Paris Agreement. This is the first such Scope 3 commitment made by a US bank, and should inspire other financial institutions to decarbonise their lending portfolios.
Other companies making recent net-zero commitments include power company Entergy (net-zero by 2050 with interim targets), real estate multinational JLL (net-zero by 2030 with interim targets) and ride-sharing behemoth Uber, which announced it will set a Science Based Target alongside its net-zero by 2030 commitment.
During a year when travel and mobility changed dramatically, there was also an unmistakable focus on decarbonising transportation.
California’s Governor Newson, who oversees the world’s fifth-largest economy, issued an executive order phasing out gasoline-powered light-duty vehicles by 2035, which will spur a race to increase production of electric vehicles.
Walmart, which has the fourth-largest private tractor-trailer fleet in the US, included a substantial focus on vehicle fleet electrification in its net-zero target, announcing plans to fully transition its vehicle fleet to 100% electric vehicles by 2040. This ambitious commitment, which should allow Walmart to reach its net-zero target without relying on offsets, will send ripples out to its various supply chains.
Other major companies made announcements that will also have outsized impacts on the market. Uber announced it had joined the Corporate Electric Vehicle Alliance, an effort led by Ceres, which loosely aggregates corporate demand for EVs and supports EV-enabling policies to accelerate the US transition to electric vehicles. Urban mobility innovator Thyssenrupp Elevator also announced its new membership in the alliance, joining Amazon, DHL, Siemens, AT&T, IKEA and others.
Microsoft made a new pledge to be 'water positive', committing to replenish all of the water it consumes by 2030
Automaker Ford showed it received the EV market signal, announcing it would invest $700m to manufacture electric F-150 pick-up trucks, while creating 300 clean energy jobs.Underscoring that corporate climate action and water leadership go hand-in-hand, and building on the leadership it staked out this year with its commitment to be carbon negative” by 2030, Microsoft made a new pledge to be “water positive” by that same year, committing to replenish all of the water it consumes by 2030.
There is no doubt that it has been a challenging year for many companies, with a global pandemic creating disruption and upending some business models. Despite the obstacles, we’re seeing encouraging steps by major companies to drive the change we need, both within corporations’ own operations and throughout the economy.
We’re looking forward to making sure these companies hit their goals, and pull others along with them.
Dan Bakal is the interim program director of climate and energy, and the senior director of electric power, at Ceres, a US sustainability non-profit organisation working with the most influential investors and companies to build leadership and drive solutions throughout the economy.