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EXCLUSIVE – As businesses face pressure from regulators and investors, consumers, and their own staff to address the climate crisis, Maria Mendiluce, chief executive of the We Mean Business Coalition, has shared her thoughts about what leadership looks like.
Mendiluce has been working with the public and private sectors for more than 25 years to bring about climate action.
Many of those who were there observed that non-state actors such as cities, towns, or the private sector participated in unprecedented numbers at COP26. The COP was the largest to date, with more than 38,000 delegates – most not representing nations.
Over 260 corporate initiatives were signed during the two-week period in Glasgow. Existing initiatives also included Race to Zero grew still furtherFollowing strong progress in conference preparations, he was able to speak.
This is a clear sign. Businesses are no longer asking whether they should act on climate; they know that ensuring a liveable future – It is as the Intergovernmental Panel on Climate Change, (IPCC), puts it – is business-critical.
But many have argued that the time for mere signals is too late – that urgent action needs to be taken, investments leveraged, technologies scaled and communities educated in a way that is aligned with climate science and the principles of a just transition. Many of those initiatives that made headlines at COP26 have been closely scrutinised. For example: The Glasgow Financial Alliance for Net-Zero (GFANZ), was announced at COP26 that membership had surpassed a collective £130trn of assets under management, or 40% of the world’s total. Green groups pointed to the fact that members had not pledged to align asset classes with a netzero-by-2050 roadmap at that point.
Reflecting on this, Mendiluce tells edie: “You cannot expect that, at the moment of the announcement, there is full delivery.
“The announcements were big and bold. Of course, there is the suspicion that they are greenwashing or that they won’t meet commitments. The reality is that we need to give them time to deliver but – of course – we don’t have too much time, so the first actions need to happen now.”
Greenwashing can be cut through
Mendiluce speaks with edie before her appearance at The Sustainability Leaders forum (scroll down to see more details). where she will be delivering a keynote talk on the theme “All in for 1.5C: The key ingredients for our climate action cocktail”.
Since the IPCC’s first major report on the economic, natural and social impacts of 2C of global warming and 1.5C global warming in 2018, governments have been pushing for 1.5C as the new standard of commitment. This increase in ambition can also be seen in private sector. Net Zero TrackerPublicly listed businesses that account for 75% of global revenues now have an objective to public net-zero.
However, not all targets can be equal. Schemes like the Science-Based Targets Initiative’s (SBTi) net-zero standard are going some way to address what has often been dubbed a “wild west” situation, but the Shangri-La of 100% credible corporate climate commitment is still a way off.
Net-Zero Tracker’s own stocktake revealed that almost seven in ten businesses have not set net-zero targets that cover all of their indirect (Scope 3) emissions. Nearly four out of ten businesses have no Scope 3 targets. Scope 3 emissions from large multinationals are often more than 11 times greater than direct emissions. This means that these targets allow businesses to avoid most of their climate responsibilities.
Research by organisations such as South Pole, Inspired Energy, The New Climate Institute, Carbon Market Watch.
With this in view, edie asks Mendiluce about her views on the key elements of a credible corporate approach towards climate change.
There are certain requirements for We Mean Business coalition members. These include a net-zero goal for 2050, or sooner; a commitment not to emit any more than half of the world’s emissions by 2030; and 1.5C aligned science-based targets. Just three businesses had verified 1.5C-aligned science-based targets in 2018 – Tesco, BT and Carlsberg. 1,5C certification is now a goal for 1,275 companies. Soon, the minimum SBTi requirement will be met.
But targets are just one ingredient – and are ultimately meaningless without action.
Mendiluce explains how the coalition uses a framework of four points to lead on climate. These points are:
- Ambition
- Action
- Advocacy
- Accountability
Setting credible and ambitious emissions targets falls into the first point, while ‘action’ relates to the delivery of these targets on the ground. ‘Action’, Mendiluce explains, also covers measures to ensure a just transition and action across the “wider scope of environmental issues, including the protection of nature”.
The latter two points, ‘advocacy’ and ‘accountability’, are the ways in which businesses can – and should – show leadership beyond their own four walls. The coalition’s definition of advocacy covers both policy lobbying and engagement and engaging “peers” (companies in the same sectors or geographical markets).
On policy lobbing, Mendiluce notes: “With more policies, more companies will do what the leaders are already doing.
“I think there is a strong regulatory influence… which is definitely a key driver [of corporate climate action]. Beyond disclosure mandates, we need to create a situation where companies doing better on sustainability do better in the market.”
Mendiluce believes that even without mandates, voluntary initiatives such as the SBTi could play a crucial role in informing policymakers and laggard business. She says: “The value of voluntary initiatives is that they are helping companies to prepare for what is to come on a mandatory business.
“This is important because, even if there are a few companies, they can send a signal. They are showing the world what can be done and what should be done.”
Disclosure and collaboration
These points on ‘advocacy’ tie in well with Mendiluce’s thoughts on the fourth and final point, ‘accountability.
The Coalition defines accountability partly to mean the need for accountability. It includes publicly reporting on progress towards key environmental goals as well as learnings from the process. In other words, a sustainability report stating that a business has met an emissions target does not go far enough – it should also explain the initiatives it delivered to get there.
In this way, Mendiluce explains, “other companies, perhaps with less resource, can then replicate their journey”.
“Accountability is particularly important because the business community is under many different strains right now,” she adds, alluding to the continued Covid-19 recovery, energy price crisis, so-called “great resignation” and the Russian invasion of Ukraine. Research has repeatedly supported this conclusion.These challenges will be the most difficult for sustainability work at SMEs.
It is encouraging that knowledge-sharing, collective de-risking, and knowledge-sharing are already core principles of many collaborative industry initiatives on climate. The Zero Carbon ForumRestaurants and brewers the British Retail Consortium’s Climate Action Roadmap.
Maria Mendiluce at edie’s Sustainability Leaders Forum 2022
edie’s biggest event of the year is returning as a live, in-person event for 2022.
The Sustainability Leaders Forum, which will take place on 7-8 and 9 March 2022 will bring together hundreds professionals for inspiring keynotes as well as dynamic panel discussions, interactive workshops, and facilitated networking. There will also digital tickets.
Taking place at London’s Business Design Centre, the event will feature more than 60 speakers, including experts from Natural England, the Green Finance Institute, the World Economic Forum and the Centre for Climate Repair. We’re planning our most diverse and inspirational programme yet.
Click here to view more information and book your pass.
Maria Mendiluce is appearing on Day Twp of the Forum (9 March). She will deliver the opening keynote speech of the Forum (9 March).
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Sarah George
