Companies Challenged to Adopt Science-Based Climate Goals

December 17, 2016

Companies Challenged to Adopt Science-Based Climate Goals
by Robert Kropp

Over 100 publicly traded companies have reported to CDP that they will adopt science-based emissions reduction plans, and letters from members of the Interfaith Center on Corporate Responsibility intend to hold them to their promises.

SocialFunds.com — It’s still too early to know with certainty what will happen to support from the US for the Paris climate accord, but the outlook is not good. President-elect Trump’s choice to run the Environmental Protection Agency is Scott Pruitt, who has repeatedly sued to agency itself over environmental regulations; he also disputes the scientific validity of climate change. And the Department of Energy has stated it will reject Trump’s request for “a list of employees who worked on various climate change priorities in President Obama’s administration, including the Paris climate agreement and the social cost of carbon.”

Yet, regardless of the position on climate change to be taken by the incoming administration, the science of climate change is indisputable; so much so that according to the Interfaith Center on Corporate Responsibility (ICCR), over 100 publicly traded companies “indicated in answers on the CDP’s annual Climate Survey that they would be adopting science-based targets within the next two years.”

Considering the current political winds, it is most timely that ICCR members have sent letters to those companies, “calling on the companies in which we invest to develop robust, science-based targets to aid in this transition” to a low-carbon economy. According to the Science Based Targets initiative, a science-based emissions reduction target is “consistent with the global effort to keep temperatures well below the 2-degree threshold.”

As a faith-based investor organization, ICCR has since its founding in the early 1970s highlighted the imperative of aligning moral values with investment strategies. “The world’s poorest, most disadvantaged communities, those who have benefited least from the growth of the fossil fuel-driven economy, are predicted to be most directly impacted by climate change,” Rev. Michael Crosby said. “Ethical business practices are in the long-term interests of these companies and they should act quickly to reduce GHG (greenhouse gas) emissions by adopting meaningful and science-based targets.”

Yet the long-term financial sustainability of companies makes a compelling case for setting science-based GHG reduction targets as well, ICCR members point out in their letters. “Ambitious emissions reduction targets provide the context needed for strategic investments to transform business models, create and penetrate new markets, prepare companies for regulation, and help identify risks and opportunities,” the letters state. “Moreover, according to CDP analysis, strong targets are associated with positive financial returns.”

“Industry leaders recognize that the setting of robust GHG reduction targets is critical for the long-term vitality of their businesses,” ICCR Program Director Christina Herman said. “We are hopeful that our letter helps companies to see the importance of their contribution to the fight to preserve a stable climate on which the global economy depends, and moves them to make their emissions reduction promises a reality.”

While a majority of companies have established some form of emissions reduction goals, the infrequency of science-based targets means that only one-quarter of reductions required by science will be realized, according to a recent CDP report. But according to Paul Simpson, CEO of CDP, “We have seen a significant increase in the number of companies committing to set science-based targets since the Paris agreement.”

“We need to build on this momentum and bring the rest of the business world on board,” Simpson continued. “With the private sector responsible for up to 70% of global emissions, it is critical that they act now to prevent the most dangerous effects of climate change.”

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