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Blog | Friday December 11, 2020

The Paris Agreement’s 5th Anniversary: Accelerating the Momentum for Net Zero

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December 12, 2020: this Saturday marks the fifth anniversary of the historic adoption of the Paris Agreement. The world’s nations reached consensus to take on the existential threat of climate change—to protect our planet, the natural resources upon which we depend, our health, and our communities. The monumental victory gave us hope. Unbeknownst at the time, five years later we are reflecting on the leadership of business, rather than government, in charting the way toward a net zero future.

The Paris Agreement set a long-term goal to limit the increase of global warming to well below 2°C above pre-industrial levels while pursuing efforts to limit it to 1.5°C. Through this agreement, countries agreed to peak global GHG emissions as soon as possible and then rapidly reduce them to reach net zero emissions in the second half of this century, on the basis of equity.

As part of BSR’s work with We Mean Business, we advocated for the adoption of the global net zero goal in the Paris Agreement. We sought an international agreement that would catalyze private sector action, making the transition to a low-carbon economy inevitable, irreversible, and irresistible.

Setting Paris-aligned emissions reduction goals—or science-based targets—has since become the gold standard for sustainable business. More and more companies have committed to goals representing their fair share of meeting the Paris Agreement. Their aggregate weight is now sufficient to dent the global emissions trajectory. For example, companies committed to the Science-Based Targets initiative now have aggregate annual operational emissions of 1.8 Gt/year—if they were a country, this would make them the world’s fourth largest emitter.

More recently, the private sector is stepping up its ambition to build net zero value chains no later than 2050, thus contributing to reaching the Paris Agreement’s 1.5°C goal. Because collaboration is essential to achieving this, companies are increasingly working together—within and across industries—to scale their impact. One example is Transform to Net Zero, a cross-sector group of climate leaders with the vision of enabling an inclusive net zero economy no later than 2050.

We sought an international agreement that would catalyze private sector action, making the transition to a low-carbon economy inevitable, irreversible, and irresistible.

The spike in business commitments to net zero targets is even more remarkable when considering the backdrop of regulatory weakness. However, 2020 is signaling an emergence of government leadership.

In September, the European Commission announced its plan to reduce EU greenhouse gas (GHG) emissions by at least 55 percent by 2030 compared to 1990 levels, putting it on a path toward climate neutrality by 2050.

At this year’s UN General Assembly, China—the world’s largest emitter—pledged to peak carbon emissions before 2030 and reach carbon neutrality before 2060. This commitment helps build desperately needed momentum to put the world on track to meet the Paris Agreement. However, with concerns about its current coal expansion, China’s forthcoming 14th five-year plan (2021-2025) will signal its first steps to reaching the 2060 goal.

Japan and South Korea recently also committed to carbon neutrality by 2050. Prime Minister Suga is focusing on green technologies as the driver of economic growth in Japan, the world’s fifth largest emitter. And the South Korean commitment followed the release of a Green New Deal, a national development strategy with an emphasis on expanding green jobs.  

In addition to these commitments from the EU and the three largest East Asian economies, a Biden Administration could put the Paris Agreement goals “within striking distance,” according to analysis from Climate Action Tracker. But the first challenges to reaching net zero emissions by 2050 are the near-term actions to cut carbon by 2030. Significant effort in this Decisive Decade is crucial to keep the world on track and avoid dangerous climate consequences.

Business action can demonstrate that the net zero economy is not merely possible but plausible.

As we reflect on the last five years and look ahead to the next five and beyond, we must remain laser-focused on results. National governments are now updating their pledges under the Paris Agreement, which will demonstrate how serious the public sector is in fulfilling their commitments. Business action can demonstrate that the net zero economy is not merely possible but plausible.

While ambitious climate policies are needed to catalyze business ambition, leading businesses will themselves continue to transition to a net zero, climate-resilient economy. We can no longer delay action, and we ought to seize the many opportunities before us to grow green jobs, improve air quality, deploy new products and services, and protect our communities.

Looking ahead to the Paris Agreement’s 10-year anniversary, BSR aims to make net zero corporate action so commonplace that there will be no doubt that we will make its vision a reality.

Blog | Wednesday September 18, 2019

Climate Week 2019: Time for Bold Commitments—and Action

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Climate Week 2019 comes at a time of both great distress and great promise. This is our great challenge and our great opportunity.

As we approach Climate Week, which kicks off with the UN Secretary General’s Climate Action Summit, it is clear that more action is needed. Globally, emissions continue to rise, despite Paris Agreement pledges. The impacts of a changing climate are coming faster than median predictions would have us believe, evidenced by stronger storms, increased flooding, and year-round wildfire seasons. Political will in many of the leading—and heaviest-emitting—economies is flagging, with the United States interfering with joint action. And there is already debate over whether a recession—if it comes—will again dampen public interest in climate action. Unfortunately, next week’s Summit is unlikely to match the urgency that Secretary General António Guterres is rightly and diligently fighting for.

It is essential that we recognize that, despite the serious efforts made since 2015, we are not yet pointed in the right direction or making sufficient progress. 

There are also, to be sure, many reasons to be optimistic. Public calls for action are intensifying. Bottom-up activism from company employees, students, and the general public is growing steadily. In the United States, the Democratic presidential contenders are in an unprecedented competition to generate the most ambitious climate plans. Around the world, nations, regions, and cities accounting for nearly one-sixth of global GDP have committed to net zero emissions targets.

Even more crucially, changes are reshaping the “real economy” as well. The end of the internal combustion engine in passenger vehicles is within sight—China and others are electrifying public transport—and investors are taking an increasingly aggressive approach to fostering a clean energy system.

Over the coming week, I will be looking for signs that the building blocks of decisive action are being put in place. A concerted effort that includes government action, business commitments, innovation, and financing is needed. New York will be awash in events, and the list of new commitments will be long. We must celebrate that, but we cannot stop there. It is essential that we recognize that, despite the serious efforts made since 2015, we are not yet pointed in the right direction or making sufficient progress. 

That’s why it’s so important that more governments join the U.K., France, California, and others with net zero by 2050 targets, along with tangible plans to achieve them. Business needs to align emissions reductions plans with a 1.5°C objective rather than a 2°C goal, a shift that more and more companies are embracing. To make this goal a reality, it is crucial that businesses ensure that their trade associations are acting consistently with the objectives of the Paris Agreement. Shell and BHP, amongst others, have taken this step in 2019, and more should follow. Financial flows are also essential. Investments also should be aligned with the need to support both the economies that are most vulnerable to a changing climate and the valuable commercial opportunities that will help us to build the clean energy economy. And we need to see wider uptake of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which will ensure that business strategy and reporting are also in line with climate ambition.

And while the UN General Assembly is possibly the ultimate expression of top-down leadership, some of the great hope and energy will come from ordinary citizens.

We know that heightened urgency is badly needed. And while the UN General Assembly is possibly the ultimate expression of top-down leadership, some of the great hope and energy will come from ordinary citizens. The fact that 16-year-old Greta Thunberg has become the most talked-about name when heads of state gather from around the world is both astonishing and thrilling. She has inspired millions to call for action, and this may provide what Al Gore calls the ultimate renewable energy: the will to shift to a clean economy that works for all.

As for BSR, we will push forward on several fronts, including climate resilience commitments, heightened commitments to clean transport, including an emerging sustainable air freight initiative, and calls for companies to align their lobbying efforts with their climate commitments. We will also be joining our partners in the We Mean Business coalition to build momentum for companies to embrace a truly Paris-compliant objective of limiting warming to 1.5°C and achieving net zero no later than mid-century. And our teams across the world will be participating in the climate strike taking place on Friday.

Climate Week this year is designed to create momentum to build towards a successful outcome at COP26 in Scotland next year, the intended five-year interval to assess progress toward the Paris Agreement. Given the trajectory we are on, the very concept of Climate Week is a misnomer. We are – or should be – living through Climate Era. Let us hope that the gathering in New York next week takes that to heart, makes bold new commitments over the next few days, and then gets to work to make those commitments a reality.

Blog | Tuesday February 12, 2019

Getting to a Price on Carbon: Opportunities for a New Generation of Collaboration

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As discourse on climate change continues to grow in the political, public, and business spheres, the outstanding question remains: What is the best solution? While advocates have long touted its promise, there is no consensus on the most effective form of a carbon pricing scheme or how to achieve it. This is the question we, along with business leaders and NGO partners, will explore at our CoLab event at GreenBiz 19.

The private sector and other key “non-state actors” in the U.S. have stepped up in a big way on climate action. More than 100 U.S. companies have committed to science-based targets, and over 3,600 companies, cities, universities, and other organizations have sent a clear message that We Are Still In with respect to the Paris Agreement, regardless of the position of the current administration.

As discourse on climate change continues to grow in the political, public, and business spheres, the outstanding question remains: What is the best solution? 

And yet, we know that this is not nearly enough to secure the prosperous low-carbon future we want while avoiding the worst impacts of climate change. Recent IPCC and other reports indicate that we are running out of time to take the bold, large-scale action needed and, despite the leadership shown by many organizations, we simply won’t get there without leveraging corporate and citizen ambition to drive changes in public policy that will enable faster and larger scale change.

Smart public policy will be critical to accelerate action and increase ambition on the part of thousands more companies, cities, and other players, while unleashing the massive capital needed to drive innovation. The Green New Deal introduced last week was met with both enthusiastic praise and harsh criticism—which raises the question: What exactly are these “smart” policies, and what can we do to achieve them?

Progressive policy advocacy is a tricky undertaking for business at the best of times, and in our current highly polarized political environment, it seems even more so. Earlier failed attempts (remember cap-and-trade?) cast a long shadow. And yet, there is reason to believe the time is right for an attempt that builds on lessons learned and takes advantage of bigger and more diverse constituencies for change.

There is broad agreement across the ideological spectrum that policies that put an effective price on carbon, while not a silver bullet, will be a key ingredient in enabling and accelerating our transition to a low-carbon economy. There is no shortage of specific policy ideas to consider, from fee-and-dividend, to tax shifting, to new and improved cap-and-trade schemes. What is far less clear is how we can best mobilize people and organizations around one or a small number of potential solutions in a way that enables durable political change on a national level.

As members of the We Mean Business coalition, BSR and CERES—together with many partners in the U.S. and internationally—have been working to catalyze the kind of business leadership we believe can drive policy ambition and accelerate the energy transition. While much of the recent activity in the U.S. has necessarily been “defensive” in nature (maintaining commitment to the Paris Agreement, preserving key government programs and policies, etc.), we are also working to develop a longer-term positive strategy for change. Ambitious new forms of collaboration between private-sector and other key players will be critical to any successful strategy, and we launched the BSR CoLab last year with exactly this kind of challenge/opportunity in mind.

Ambitious new forms of collaboration between private-sector and other key players will be critical to any successful strategy.

CoLab is BSR's incubator and accelerator of private-sector collaboration, mobilizing the collective power of business to solve some of the world’s biggest sustainability challenges. Driven by the collective ingenuity of business and stakeholders, CoLab ideates, designs, and scales collaborations that have transformational impacts.

On February 25, BSR and CERES will co-host a half-day workshop at GreenBiz 19 in Phoenix, Arizona, in which we will put our new CoLab methodology to work, exploring the prospects for powerful new collaboration(s) in pursuit of an effective public policy advocacy strategy to support climate ambition in the U.S., with a focus on, but not limited to, a price on carbon.

We are inviting selected companies and expert stakeholders to join us as we consider key questions such as:

• Do we agree on the problem we’re trying to solve? What are best objectives for getting effective price on carbon in the U.S.?
• What can we learn from past efforts to build political will for climate action in the U.S. (cap and trade in 2007-8) and how should that impact our next run?
• For companies, how can we elevate and align climate policy with other priorities for government relations? How do we create and communicate a compelling business case for corporate action?
• For social and political leaders and advocates, how can we build truly bipartisan popular support that will in turn enable bipartisan action?
• What is the best pathway to build unstoppable political force at the national level, and what are roles for local and state action as well as direct national-level and “mass-market” advocacy?

If you are interested in joining us in Phoenix, and/or for any efforts which may follow, please reach out to us at web@bsr.org.

Blog | Tuesday September 25, 2018

Climate Solutions Need Women at the Center

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The intersection of climate change and women, although rarely prioritized in decision-making or solutions, is not a new concept. But, as Mary Robinson said, “If we took away the barriers to women’s leadership, we would solve the climate change problem a lot faster.”

As Mary Robinson said, “If we took away the barriers to women’s leadership, we would solve the climate change problem a lot faster.”

In 2015, the international arena formally gave this women-climate nexus a platform within the Paris Agreement and the Sustainable Development Goals (SDGs). In 2017, UNFCCC countries adopted the Gender Action Plan at the climate negotiations. These international frameworks now recognize the intersection between gender inequality and climate change, as well as the need for the integration of women’s voices, skills, and knowledge in solutions. It is time for businesses to act by empowering women leaders to take climate action throughout their value chains.

Today, we are excited to launch a new report that highlights tangible ways of doing this. Companies can address climate risk more effectively and efficiently if they put women at the heart of their climate resilience strategies.

Women are disproportionately affected by climate change—not because they experience more climate impacts than men, but because women face underlying socioeconomic, political, and legal barriers that limit their choices in the face of climate change. Climate impacts exacerbate these barriers and ultimately hinder climate resilience activities from reaching their full potential.

For example, only 47 percent of women have an account at a formal financial institution, compared to 55 percent of men. Without bank accounts and financial resources, women cannot easily diversify their livelihoods or access financial capital before and after climate disasters. Additional barriers include norms related to unpaid work, limited access to income, discriminatory laws, land ownership restrictions, a lack of capacity-building resources, and a lack of voice. These barriers not only limit the adaptive capacity of women to climate impacts, but they also influence the adaptive capacity of communities and company value chains—in particular, agriculture (nearly 50 percent of smallholder farmers in some countries are women) and apparel (nearly 80 percent of apparel factory workers are women). 

Despite these deeply rooted barriers, women possess unique and key skills, knowledge, and experiences critical for climate resilience solutions, making them powerful change agents. For example, women make different choices than men that can help an agricultural community within a value chain thrive and adapt to climate change. For generations, women have been land stewards and have maintained local climate, plant, and seed-planting knowledge. This makes them natural targets for involvement in the creation and use of climate adaptation tools and trainings, in particular as men continue to move to more non-farm jobs and climate impacts continue to worsen.

Climate resilience solutions with a specific focus on women are a win-win: They tackle climate risk and gender inequality simultaneously, with clear benefits for business, women, and communities. For businesses, empowering women and also making them leaders in the development and implementation of these solutions can drive productivity and innovation, especially within sectors like agriculture and apparel that depend heavily on a female workforce. Companies can also protect raw materials, increase financial stability and returns, strengthen the resilience of local communities, and deliver other co-benefits, like stabilizing livelihoods, improving food security, and making progress toward closing the global gender gap, as part of this approach.

Businesses that recognize this can play an important role in developing these solutions within their own operations, and they can also collaborate with others to make progress. More specifically, they can:

• Act to put women at the center of all internal climate resilience approaches and solutions. In particular, companies can provide women in supply chains access to relevant trainings, inputs, financing, and technologies.
• Enable women throughout the value chain and broader community to effectively respond to climate-related events by linking them with local networks and partners, which can serve as mutual support mechanisms to strengthen climate resilience.
• Influence policymakers and other organizations to help address underlying inequalities, such as the lack of decision-making power of women, which are particularly challenging in the context of a changing climate. 

Through the Business Action for Women collaboration, BSR works with leading companies on climate change, including Mars, L’Oreal, and Coca-Cola, to share best practices and collectively develop innovative solutions that empower women to lead on climate resilience in agricultural supply chains from the ground up.

Real transformation for both climate resilience and gender equality will happen when companies tackle the structural and systemic barriers women face and involve women in solutions—putting women at the center of their climate strategies.

BSR’s climate and women nexus report is the fourth in our series, which also includes reports on the intersection between climate and supply chains, health, and inclusive economy. Stay tuned for more on the connections between climate resilience and human rights and a just transition to the low-carbon economy in the months to come.  

Blog | Thursday February 27, 2020

Purchasing Power: The Opportunity for Women’s Advancement in Procurement and Global Supply Chains

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2020 is a critical year for gender equality and women’s rights. Among other major milestones, this year marks the tenth anniversary of the Women's Empowerment Principles (WEPs), a framework guiding business on how to promote gender equality and women’s empowerment in the workplace, marketplace, and community. Women are essential in global value chains: as producers, employees, business owners, and consumers. The WEPs encourage companies to assess and address gender equality across the value chain, from increasing women’s representation in leadership positions, access to education, and training opportunities to gender-smart procurement that works with suppliers to ensure safe and inclusive workplaces. 

Over the past decade, 2,771 companies worldwide have become signatories to the WEPs. Companies have assessed their own practices to identify major gender gaps, designed strategies to promote more equal employment opportunities though human resources practices, policies, and objectives, and implemented workplace programs to equip women with more knowledge and resources, among other efforts. 

However, despite considerable advancements, we are still decades away from achieving gender parity. The World Economic Forum’s recent Global Gender Gap Report reveals that today, women have lower workforce participation than men (55 percent compared to 78 percent), hold limited leadership positions globally (representing 36 percent of senior managers and officials, with even lower representation in higher positions), face persistent gender pay gaps, and continue to be victims of sexual harassment and violence. 

Slow progress means missed financial and sustainability opportunities—gender equality plays a significant role in the fulfillment of other Sustainable Development Goals (SDGs), and achieving gender equality in the workplace could add USD$12 trillion to global economic growth by 2025.  

Why do procurement and purchasing practices matter? 

Advancing gender equality is transversal within companies and requires engagement from various departments to be fully realized throughout the business. Procurement holds tremendous power to promote gender equality across different profiles of women—as procurement leaders and team members, business owners, and workers of business partners and suppliers. Through employment practices as well as purchasing practices, procurement can enable more equal opportunities for women involved at the different stages of procurement.  

• Promoting women in procurement leadership: Gendered stereotypes widely contribute to women participating less in certain industries and jobs and, while initiatives exist to promote women in non-traditional jobs, such programs are yet to be considered mainstream. Just 14.7 percent of Chief Procurement Officer-level respondents to the Procurement Leaders’ Procurement Salary Survey 2020 identified as female. Furthermore, Oliver Wyman’s 2019 report found that procurement leaders recognize more creative and innovative team dynamics when women are included in the team, as well as more efficiency and economic benefits. 
• Procuring from women-owned businesses: Little is known about companies’ engagement with women-owned businesses. A forthcoming report analyzing the responses from over 1,000 companies who have reported against the WEPs reveals that only 4 percent of companies track the percentage spent on women-owned businesses, and 3 percent publicly report on it. Women-owned businesses still face a number of barriers as women struggle to access and fully participate in local and global value chains. Barriers include limited funding as a result of cultural and gender biases, time constraints given expectations about women’s roles as primary caregiver, and challenging business environments attributed to laws, politics, religions, and culture that negatively affect women. However, women-owned businesses represent the fastest-growing market segment in some regions, and globally, it holds the potential to strongly contribute to global economic growth and to the creation of new jobs.
• Fostering environments that empower women in the supply chain: Women represent a large proportion of workers in the supply chains but continuously encounter gendered challenges that are frequently overlooked, such as occupational segregation, more vulnerable working conditions, unequal pay, poor access to maternity rights, and limited access to training. The upcoming WEPs 2020 report finds that only 8 percent of companies have robust due diligence processes in place to assess potential negative impacts of their operations, particularly for women and girls. Furthermore, poor practices have disproportionate impacts on women. For instance, Human Rights Watch’s rights report on the apparel sector highlights the increase of sexual harassment and abuse as a result of intensified work periods. Empowering women can improve on turnover, absenteeism, and retention rates, foster more inclusive working environments, and provide more dignified working conditions.

So—what next? 

As we enter this new decade that demands real action on achieving gender equality—and with the upcoming International Women’s Day #eachforequal—there are three key questions procurement teams should consider to assess how their practices are promoting (or could promote) gender equality:

• How can your practices and processes enable—or limit—the growth of women in the purchasing department? Assess whether the employment practices and culture of the organization might be unconsciously constraining women’s full participation in the team. Commit to advancing women in your team together with a clear pipeline, metrics, and accountability. 
• How are you engaging with women-owned businesses? How could you contribute to increase and unlock the potential women-owned businesses hold? Set goals that encourage business relationships with women-owned businesses, e.g., through supplier diversity programs. 
• How could you leverage your procurement spend and supplier relationships to promote gender equality across your supply chain and incentivize suppliers to take a stand for women’s empowerment? Raise awareness on gender equality with your suppliers. Review your supplier scorecard and social audit process to integrate a gender perspective. Conduct gender responsive due-diligence to capture specific challenges that women may be facing with your suppliers. BSR has specific and publicly available guidance (linked above) for companies to make procurement tools more gender inclusive and is well positioned to support you in this process.  

Achieving gender equality is right and a human right—and it means better business and more productive supply chains. Let’s make this the decade of action where women share equally in the opportunities provided across global supply chains.  
 

Blog | Wednesday June 24, 2020

The Business Role in Creating a 21st-Century Social Contract

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Long before the urgent challenges of the COVID-19 pandemic and the long overdue focus on racial justice, diversity, equity, and inclusion changed history, it was clear that our social contracts—the relationship between individuals and institutions—were no longer fit for purpose.  

For much of the second half of the 20th century, the roles and responsibilities of business, government, civil society, and people remained relatively constant and provided vital protections to support healthy and productive lives. But today, people are relying on strained protection systems that fail to keep up with our 21st-century realities. And criticism is on the rise over the value of capitalism and the purpose of business, with the desire to build an economic system that delivers truly shared prosperity while preserving the natural environment.   

BSR launched our contribution to the essential work of modernizing social contracts in 2018. We are committed to taking this work forward, and today we are pleased to present our new report, The Business Role in Creating a 21st-Century Social Contract. 

We are at a hinge point in history where transformation is both possible and necessary. 

In addition to the profound structural changes already remaking our world, 2020 has delivered truly epochal change. At the time of the publication of this blog, COVID-19 has left a global death toll that currently stands at nearly 475,000 people, remade public finances, and threatens to eliminate the equivalent of 195 million jobs around the world. And the tragic murder of George Floyd—and far too many others—is a powerful reminder of the deep structural racism not only in the U.S., but also globally, in addition to other forms of discrimination that continue to plague all societies globally.  

2020 has demonstrated powerfully the importance of a fully functioning social safety net, public health systems, and global collaboration. We see more clearly that the world remains too focused on short-term thinking, leaving us extraordinarily susceptible to shocks that create wide social and economic destruction, with the greatest impacts on the most marginalized groups. In the United States, recent powerful examples of how systemic and institutional racism continues to plague the country, and Black Americans in particular, reinforce the urgency of ensuring a social contract based on more inclusive models and practices.   

We are at a hinge point in history where transformation is both possible and necessary. Reforms to the social contract are clearly needed to protect public health, economic security, and the right of all people to participate fully in society.  

Without a truly modern social contract, the ability of business to innovate and thrive will be compromised.  

There is also a powerful case for business to embrace and contribute to this effort, We believe this work is essential to lay the foundation for business success through increased trust, workforce development fit for the changing needs of business, stable economic conditions, and social consensus on the development and implementation of new technologies and business models. Without a truly modern social contract, the ability of business to innovate and thrive will be compromised.  

Achieving this ambition will require unprecedented collaboration among leaders from all sectors of society: business, government, philanthropy, and civil society, with a goal to define and align on a vision for a post-virus world grounded in equity and inclusion, what the new social contract must deliver, and the roles of each sector in translating that vision into reality. The world is looking for leadership in a time of profound change. Business can and should fully embrace and fulfill its appropriate role by asserting leadership and innovation in its own practices, collaborating with business partners and other stakeholders, and using its voice to call for the public policy solutions that are so badly needed. 

The paper we are publishing today is a first step toward this vision. It speaks both to the underlying structural issues that prompted this effort as well as the new context brought by the pandemic and the renewed call for diversity, equity, and inclusion, not least concerning racial justice. We hope it serves as a foundation for further discussion with companies and other partners about how to make progress. Working together will be critical to achieve these crucial objectives and to turn our current crisis into an opportunity to create models that enable more resilient, fair, and sustainable economic and human development.  

The time is right to pursue a grand bargain that can create a more inclusive economy that enables people to thrive in dignity, preserves the natural world on which we rely, and creates more just and humane institutions that respect the rights of all. With this effort, we can truly meet the moment, and build the future. 

Blog | Thursday September 1, 2022

Empowering Executives and Activating Boards: The New Nexus of Sustainability Governance

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In a world that is buffeted by disjunctive change, Boards of Directors face a new reality: their ability to provide effective stewardship and oversight depends on their capacity to act on a diverse array of sustainability questions that are reshaping business:

“How can the company address the risks of climate change and the energy transition? How will they respond to rising expectations to take public positions on questions that once would have been considered too ‘political?’ Can the business meet investor expectations on ESG while also delivering strong financial performance in the near term?”

Unless they take urgent and significant action, most boards will fail those tests.

From a governance perspective, boards are now both discharging long-established duties and being asked to address entirely new questions. As legendary corporate governance attorney Martin Lipton noted:

“The legal rules as to directors’ duties have not changed. What has changed are the expectations of investors and other stakeholders.”

Spotlight on ESG Disclosure Mandates 

In addition to existing duties, there is also a raft of new mandates that have put ESG at the front and center for boards. For example, the European Commission Proposal for a Corporate Sustainability Due Diligence Directive (CSDDD) explicitly establishes a “duty to act” on the consequence of their decisions relating to sustainability, climate, and human rights impacts on the company. 

The Corporate Sustainability Reporting Directive (CSRD) will also require boards to be a part of the company’s due diligence process and to sign off on sustainability information within a company’s management report.  

In the US, the Securities and Exchange Commission’s proposed climate rules would require companies to publish climate-related information in financial filings, including the governance of climate-related risks.  

Globally, the International Sustainability Standards Board published exposure drafts that will require climate disclosure in line with the Task Force on Climate-Related Financial Disclosures recommendations and an explanation on board governance and oversight.

This is only the beginning of the raft of new duties on boards addressing climate, social impact, human rights and corporate governance.

Building Future-Proof Business Strategies

Beyond stakeholder expectations and legal duties, it is increasingly apparent that board engagement on sustainability is essential to building resilient business strategies that help companies manage risk, compete in the market, and deliver value for business and society to thrive. 

Deeper understanding of sustainability can help a board understand and govern on critical issues, like how climate change is raising the costs of agricultural inputs and driving up insurance prices, or why the company is having difficulty hiring top talent in a region that fails to respect LGBTIQ+ rights, or the impact of potential new regulations on human rights in supply chains. 

Furthermore, board engagement on sustainability is valuable in creating a shared understanding and alignment between the board and management. Many CSOs and C-suite leaders have grappled with sustainability topics for years. As boards increasingly turn to sustainability executives for answers, there is an opportunity for collaboration: on the one hand, empowering executive leaders to engage at the board level, and on the other, activating boards of directors to provide effective oversight and strategic guidance.

Key Priorities That Support Strategic ESG Decision-Making

Management and boards have a vital opportunity to collaborate in building resilient business strategies that respond to these new expectations, protect against emerging risks, and pursue new frontiers. To seize the moment, BSR believes there are three critical areas for boards to address sustainability.  

• Competencies and Structure: Board members with the right knowledge, competencies, expertise in relevant sustainability topics, and diverse backgrounds are better positioned for effective leadership and resilience. 
• Strategy: A clear understanding of how material topics, emerging issues, and stakeholder impacts shape business strategy will be critical for board oversight and “future-proofing” the business for resilience.
• Oversight: Goals, incentives, and accountability are valuable in promoting effective board oversight and alignment with management.  Meaningful disclosure is a key aspect of delivering on that oversight.

BSR is proud to build on its 30-year history of working with companies to develop and deliver ambitious approaches to sustainable business, including advice to Boards on approaches that enable them to provide strong stewardship with a positive impact on society. That’s why we’re excited to launch a renewed focus on helping executives and boards align on shared understanding, effective action, and corporate leadership on sustainability.

Our objectives in this work are to empower executives and CSOs to engage, inform, and activate boards on sustainability. We also seek to activate Boards as partners to provide strategic direction that strengthens their company’s ability to deliver on ambitious sustainability strategies that enhance business success. 

BSR’s work with boards focuses on offering credible sustainability expertise tailored to each company’s unique context:

• Building competencies and enhancing structure through ESG/sustainability introductions, thematic training, addressing diversity, equity, and inclusion, and institution effective ESG governance throughout the board and organization
• Providing strategic guidance and identifying emerging risks through scenario analysis, stakeholder insights, and the work of our Futures Lab. We also support the development and facilitation of sustainability and stakeholder engagement approaches and advisory panels 
• Promoting ESG oversight and transparency by providing guidance on the evolution of regulations, frameworks, and expectations on corporate reporting and disclosure
• Delivering trusted on-going advisory to boards and executives, supporting ongoing efforts and responding to emergent issues

In 2022 alone, boardrooms have scrambled to deal with one ESG crisis after another: the fallout of Russia’s invasion of Ukraine, the rollback of reproductive rights, killer heatwaves, and labor disputes, among others. 

Companies are making strategic investments to ensure their businesses are prepared to meet the challenge of the climate crisis, advance equitable societies through their investments, ensure that new technologies and business models have the support of society, and address rising interest from investors, employees, customers and communities.

The question is no longer whether Boards have a role in sustainability; it is how well equipped they are to meet a changing world. The most sustainable—and most successful—businesses will be the ones that address changing needs, expectations, and opportunities. And the most successful Boards will be the ones that ensure these challenges are met. 

BSR looks forward to partnering further with Boards and executives from inside and outside the sustainability functions to advance this new era of leadership. If you would like to discuss this topic further, please reach out to our Business Transformation team.

Blog | Monday February 17, 2020

Sustainable Business in Asia: Three Environmental Drivers of the Decisive Decade

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Climate change is a global threat, endangering communities, resources, and economies around the world. For businesses in particular, climate change is a significant risk—to workers, operations, and supply chains. Many companies are already mobilizing: to limit their own impact, many are setting emissions reduction targets; to adapt to the growing risks, some are evaluating where their supply chains are located as well as what energy sources they use.

Companies with operations in Asia will face a unique set of challenges and opportunities as we enter the decisive decade of the 2020s. BSR has identified the following trends relating to climate and the environment that are likely to impact how companies do business in the region. We have identified these trends based on our work with companies in Asia, including our engagement with stakeholders throughout the region.

We expect these trends to impact sourcing strategies and supply chains, access to finance, employee engagement, sustainability leadership, and increasingly market and consumer engagement. For sustainable business to thrive in the next decade, companies need to be aware of:

1. The Increased Focus on Climate and Sustainability Determining Access to Finance

Climate change impacts and risks—such as rising sea levels, increasing cyclone intensity, water stress, and drought—pose a significant threat to Asia. China alone has 14 coastal cities and 154 million people in low-elevation zones. Indonesia has the world’s second largest coastline, exposing 60 percent of its population to sea-level risk and coastal surge; furthermore, Jakarta, its capital, is sinking. 

Climate risks, impacts, and the need for planning and resilience are being integrated into banking risk, banking relationships, and the Task Force on Climate-related Financial Disclosures. This means that the increasing global focus on carbon and climate will impact key relationships between businesses and their financial services providers. As their bankers begin to ask more pointed and specific questions, all businesses—including conglomerates and family-run businesses seeking access to global capital—will need to integrate deeper understanding of climate risks: from hazards such as flooding, to business exposures as demand for products/services change, to vulnerabilities of local infrastructure and communities. The financial imperative to understand climate risk is driving greater CFO engagement on climate and sustainability and will continue to do so. As a consequence, companies are having to develop greater firm-level competency, awareness, and integration of both climate and sustainability into their core business strategies. 

2. China’s Continuing War on Pollution

China has been waging and will continue to wage three battles: for clean air, clean water, and clean land. As this continues over the coming decade and is further integrated into the 14th Five-Year Plan, the war on pollution will continue the changes already being driven: polluting enterprises are being shut down, moving, or needing to significantly invest in pollution control as governmental enforcement, standards, and local government oversight change. Supply chains are experiencing—and will continue to experience—the impacts of this war on pollution in terms of increased supply chain uncertainty and supply chain movement as critical China-based suppliers in tier two or three cease operations or move to new locations.

3. Differing Country Investments in Renewable Energy

Individual countries’ choices to enable investments in renewables (or not) will be important to global supply chains and are highly variable around Asia—with Vietnam appearing to innovate and Indonesia at a crossroads where “an over-reliance on thermal coal and unsustainable sources…will lock the country into polluting energy supplies, for years, if not generations, to come.” Continued use of coal and other fossil fuels affects businesses’ Scope 3 carbon emissions—and most probably lock countries into higher energy costs over the course of the decade. 

As global business begin to contemplate fossil fuel-free supply chains, energy generation options in countries will become increasingly important. Whether is it a carbon tax in the producing country or a carbon tax at the border to the market country, this needs to be accounted when looking at value chain locations. Local energy options and future energy infrastructure development plans will need to be on the radar of procurement and supply chain leadership. 

Businesses already doing business in Asia or those with plans to expand operations and supply chains into the region need to pay attention to these trends as we move into the new decade. BSR’s Asia team can help develop strategies specific to the region to advance your company’s sustainability agenda—please feel free to reach out and connect with us.

Blog | Wednesday March 1, 2023

Building Responsibly: Raising Ambition for over One Million Workers

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Philippe Fonta discusses his new role as Director of Building Responsibly, unique challenges facing industry workers, and how he plans to accelerate impact in the year ahead.

Could you tell us about “Building Responsibly”? What is your mission and strategy for impact?

Building Responsibly (BR) is a collaborative initiative led by BSR that gathers a group of leading engineering and construction companies. We promote the rights and welfare of workers in the sector across the entire supply chain.

The initiative enables members to protect worker rights across the industry—even in contexts where the rule of law is limited. By creating and adopting common principles, developing tools to support implementation, and engaging workers, clients, governments, civil society, and international organizations, BR can really make a significant impact as a collective group rather than working alone.

Representing over one million workers across more than 100 countries, BR members have committed to implementing ten Worker Welfare Principles—a global standard to advance the safety, security, and welfare of construction and engineering workers. This requires the participation and collaboration of a wide set of stakeholders (including companies, NGOs, and industry associations).

What’s your role at BR?

BSR provides executive leadership and secretariat support for BR. Having joined BSR in 2022 as Director for Industries and Transport, I have now taken up a new role as Director of BR.

Primarily, I ensure that innovation and leadership remain key drivers in our collaborative approach, while utilizing the best available resources to advance the work program and raise ambition. I check that the quality of our work really makes a difference and effectively delivers impact. It all comes down to teamwork, members are different, even if the sector’s objectives are the same for every stakeholder. I also promote BR’s mission, work program, and achievements in various meetings in order to solicit the interest of potential new members and partners.

Tell us about your previous industry experience.

I have 25 years of experience in sustainability management, both within multinational industrial companies and non-profit organizations. I understand the constraints, challenges, and opportunities for industrial conglomerates as well as the expectations of their various stakeholders and society at large.

I spent eight years leading the Cement Sustainability Initiative (CSI), one of the flagship collaborative projects of the World Business Council for Sustainable Development (WBCSD). Gathering 25 global members from the cement manufacturing sector, CSI developed and implemented commonly agreed principles on sustainable issues such as climate, health and safety, and supply chain management, implementing them, and reporting on key indicators to deliver impact. Advocacy at major international forums was also a part of my role. I promoted the work of CSI and made our work accessible to a wider community of cement manufacturers.

What are the key challenges members face when protecting workers’ rights? How can BR help?

The engineering and construction industry relies on a massive number of workers and is a major provider of employment opportunities worldwide. Large real estate and infrastructure projects have fueled a construction boom, attracting millions of migrant workers, especially when there are not enough local workers or the local workforce doesn’t have the required skills.

This rapid growth has given rise to challenges around the rights and welfare of workers, which has been further highlighted by media and civil society organizations. Many companies in the engineering and construction industry have longstanding commitments to the health, safety, and welfare of workers. They are keen to expand on their existing programs, policies, and standards to further promote the rights and welfare of workers in their operations and subcontracting chains—even in contexts where the rule of law is limited.

BR enables business to collaborate around these shared values, advance their programs by sharing best practices, agree on common approaches and standards, develop tools, and engage clients, civil society, and international organizations. As a pre-competitive initiative, BR will ensure that companies can engage in mutually beneficial measures and policies in a safe space.

So, what’s going to be keeping you busy in the coming months?

As the new Director of BR, my first task is to ensure a smooth and efficient onboarding, gain trust from BR members and build on the excellent work led by the current secretariat. I plan to bring BR to the next level, and for that, we need to ensure the effective implementation of the Welfare Workers Principles. At the same time, we will need to bring these issues (and upcoming ones) at a speed and scale that will deliver real impact. This can be achieved by enhancing outreach and communication on the work, commitments, and achievements of BR (via publications, presentations, and conferences), attract the attention of potential new members, including in Asia and Latin America, expand the type of issues managed collectively at BR while ensuring that all the legal requirements associated to sharing information within companies of a same sector are respected. This is certainly challenging, but exciting and my previous experience at CSI should be helpful!

To learn more about Building Responsibly, please contact us.

Sustainability FAQs | Tuesday November 1, 2022

Net Zero Targets

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This FAQ sets out the BSR perspective on net zero targets. We believe that setting science-based net-zero targets—and more importantly, taking ambitious action to achieve these targets—is core to the role that companies should play in helping achieve the Paris Agreement’s stretch target of limiting global warming to 1.5°C above pre-industrial levels.

Defining Net Zero

What is the definition of net zero?

The Intergovernmental Panel on Climate Change (IPCC) defines net-zero emissions as the point when “anthropogenic emission of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period.” Put more simply, net zero is achieved when remaining human-caused greenhouse gas emissions are counterbalanced by removing greenhouse gas emissions from the atmosphere via carbon removal.

Why do we need company net zero targets?

The Paris Agreement established our collective vision for a net-zero economy in which we limit warming to 1.5°C above pre-industrial levels. However, current climate science predicts warming in the range of 2.5°C-4.0°C, bringing irreversible changes to oceans, ice sheets and global sea levels, and causing impacts such as extreme heat and weather, species loss, crop yield reductions, fishery decline, disrupted supply chains, public health crises, and displaced communities.

BSR’s vision is an inclusive net-zero economy no later than 2050, which the IPCC has concluded is needed to hold warming to 1.5°C. While some governments (such as the EU-27, China, Japan, South Korea, Canada, South Africa, the United States, and over 100 other countries) have established their own net-zero pledges, company net-zero targets are also needed to build net-zero economies.

What is the definition of a company net-zero target?

Companies need clear direction on what net-zero targets are and which actions drive real climate progress, and for this reason the launch of the Science Based Targets initiative (SBTi) Net-Zero Standard in late 2021 marked a significant milestone.

The SBTi Net-Zero Standard is the first science-based and independently certifiable standard that assesses a company's net-zero targets and clearly grounds them into 1.5°C-aligned short-term and long-term action. The 

SBTi Net-Zero Standard gives companies confidence that their near-term and long-term targets are scientifically sound, aligned with what is needed to contribute to a habitable planet, widely understood by stakeholders.

The SBTi Net-Zero Standard defines a net-zero target as:

• Reducing scope 1, 2, and 3 emissions to zero or to a residual level that is consistent with reaching net-zero emissions at the global or sector level in eligible 1.5°C-aligned pathways.

• Neutralizing any residual emissions at the net-zero target year and any GHG emissions released into the atmosphere thereafter.

The SBTi Net-Zero Standard sets out four key elements that make up a net-zero target: (1) a near-term science- based target; (2) a long-term science-based target; (3) mitigation beyond the value chain; (4) neutralization of any residual emissions.

What are near-term science-based targets and why are they important?

Near-term science-based targets are 5-10-year greenhouse gas mitigation targets that require companies to align their Scope 1 and 2 targets with a 1.5°C pathway goal while Scope 3 ambitions should retain a threshold of well below 2°C. When companies reach their near-term target date, they must calculate new near-term science-based targets to serve as milestones on the path towards reaching their long-term science-based target.

Near-term science-based targets are needed to galvanize the immediate and ambitious action needed for significant emissions reductions to be achieved by 2030. Near-term emissions reductions are critical to not exceeding the global emissions budget, which is the maximum amount of cumulative emissions consistent with limiting warming to a 1.5°C pathway.

What are long-term science-based targets and why are they important?

Long-term science-based targets show companies how much they must reduce value chain emissions to align with reaching net-zero in line with 1.5°C pathways by 2050 or sooner (2040 for companies in the power sector).

Long-term science-based targets are needed to drive economy-wide alignment and long-term business planning to reach the level of global emissions reductions needed for climate goals to be met based on science. A company cannot claim to have reached net-zero until the long-term science-based target is achieved.

Does a company need both near-term and long-term science-based targets?

If a company sets a long-term science-based target to reach the level of decarbonization required to reach net- zero at the global or sector level in 1.5°C pathways within a 10-year timeframe, the near-term science-based target is not required.

What is “mitigation beyond the value chain” and why is it important?

The concept of “mitigation beyond the value chain” refers to mitigation action or investments outside of a company’s value chain, such as activities that avoid or reduce greenhouse gas emissions or remove and store greenhouse gases from the atmosphere.

Mitigation beyond the value chain involves companies playing a critical role in accelerating the transition to net- zero economies and increasing the likelihood that the global community stays within a 1.5 ̊C carbon budget.

Mitigation beyond the value chain represents ambitious action, but is not substitute for the reduction of a company’s own value chain emissions.

What is “neutralization of any residual emissions” and why is it important?

The concept of “neutralization” refers to measures that companies take to remove carbon from the atmosphere and permanently store it to counterbalance the impact of their own emissions that remain unabated.

Although the SBTi Net-Zero Standard expects companies to reduce their emissions by at least 90%, some residual emissions may remain, and these emissions must be neutralized to reach net-zero emissions.

Should science-based targets vary by industry?

Yes. The SBTi Net-Zero Standard includes both a “cross-sector pathway” and multiple “sector-specific pathways” for setting science-based targets. Companies in the power generation, forestry, land-use, and agriculture sectors are required to set targets using “sector-specific pathways”, while companies in all other industries can choose between a “cross-sector pathway” or one of several “sector-specific pathways” that either have or are in the process of being developed.

What is the scale of emissions reduction is envisioned?

Using the “cross-sector pathway” companies are expected to set “near-term science-based targets” that reduce emissions at a linear annual rate of 4.2%; however, some “sector-specific pathways: vary significantly from the cross-sector pathway in the near-term. For “long-term science-based targets” most companies are expected to reduce emissions by 90% or more from 2020 levels.

How should scope 1 and 2 emissions be addressed in net-zero targets?

Near-term science-based targets must cover at least 95% of company-wide scope 1 and 2 emissions.

How should scope 3 emissions be addressed in net-zero targets?

Companies with scope 3 emissions that are at least 40% of total emissions must (1) cover at least 67% of their scope 3 emissions in near term science-based targets and align to well-below 2°C ambition, and (2) cover all material sources of scope 3 emissions in the value chain (with a materiality threshold of 90%) in long-term science-based targets and align with 1.5°C scenarios.

Do “avoided emissions” count towards net-zero targets?

A company’s product avoids emissions if it has lower life cycle emissions relative to a different product providing an equivalent function. Companies should pursue avoided emissions as part of their climate strategy, and products with lower life cycle emissions will help other companies achieve their net-zero targets—however, avoided emissions occur outside of the product’s life cycle, do not count as a reduction of a company’s scope 1, 2 and 3 emissions, and are not relevant for a net-zero target.

Does the purchase of “carbon credits” count towards net-zero targets?

The purchase of carbon credits from outside the value chain can be complementary to achieving net-zero targets, and companies can increase their impact by reducing emissions beyond their own value chain through credits and other forms of climate investment. However, carbon credits do not count as reductions toward meeting science-based net-zero targets and companies should only account for reductions that occur within their operations and value chain. Companies should make all viable efforts to reduce emissions consistent with a 1.5°C trajectory before looking to purchase credits.

High-quality carbon credits can enhance reductions and removals in the near term, including for hard-to-abate industries, and contribute crucial funding to activities that avoid, reduce, or remove emissions. These include reduction of short-lived climate pollutants and urgent action to stop tropical deforestation. The use of credits, whether avoided emissions credits, reduced emissions credits, or removal credits, must also meet the conditions of approved third-party standards and/or governments.

Company investment in carbon credits should also deliver additional social benefits or synergize with other environmental benefits, such as progress towards the Sustainable Development Goals. In addition, investment in underfunded climate solutions can bring down their price over time, target innovation in the value chain, decrease residual emissions over time.

Business Transformation

What is BSR’s ambition for companies?

BSR believes that net-zero goals are needed to incentivize decarbonization of the value chain and spur the business transformation needed to achieve the Paris Agreement’s stretch target of limiting global warming to 1.5°C above pre-industrial levels.

For this reason, we only support long-term science-based targets that are accompanied by near-term science- based targets that commit companies to both decarbonize their own footprint and transform their value chains to be consistent with a 1.5°C pathway.

What is business transformation and why does BSR emphasize it?

BSR defines business transformation as reshaping key business functions, models, products, and services to build inclusive net-zero value chains, and we emphasize action to mitigate scope 3 emissions.

Unlike decarbonizing a company’s own GHG footprint via scope 1 and 2 reductions, which can be largely accomplished by sustainability and operations functions, building a net-zero value chain has much broader implications to a company’s growth strategy and operating model. Companies will need to undertake business transformation towards net-zero value chains, harnessing functions outside sustainability and operations, and we encourage companies to think strategically about the business transformation needed to achieve net-zero targets.

What about the impact on people?

The adverse impacts of climate change will be exacerbated for communities that already face underlying socioeconomic inequalities or injustices, and net-zero targets are intended to mitigate these impacts. However, it is essential that climate justice—which we define as the recognition that climate change disproportionately impacts some communities over others and exacerbates underlying systemic inequalities —is central to any company climate action plan.

We emphasize the following three priorities in actions to achieve net-zero targets:

• A just energy transition: It is essential that the transition to a net-zero economy doesn’t leave behind workers and communities traditionally dependent on fossil fuel industries for jobs and livelihoods, including women who are underrepresented in today’s “green jobs” economy. Planning, dialogue, and engagement with workers and stakeholders is essential for a just transition, which aims to ensure social and economic opportunities of climate action are maximized and that fundamental labor principles and rights are upheld.

• Upholding Human Rights: The development and procurement of decarbonization technology and renewable energy requires the mining of metals and minerals—however, the extraction of many of these materials are associated with armed conflict, land and water grabs, violation of the rights of Indigenous peoples, the denial of workers’ rights to decent work and a living wage, and other human rights abuses. Companies need to establish business practices based on the UN Guiding Principles on Business and Human Rights to address the actual and potential adverse human rights impacts associated with this transition, implying more integrated approaches to climate change and human rights strategy.

• Ensuring Equitable Access to Clean Energy: When companies implement net-zero targets across their value chains suppliers will need access to renewables energy to meet their customers’ expectations. However, not all markets have access to clean technologies or renewables in the electrical grid, and under- resourced communities are more likely to experience energy insecurity and lack access to affordable, efficient, secure, and reliable clean energy. Identifying gaps in access to energy across the value chain is an important step to deciding what proactive actions companies can take—such as policy advocacy, financing, and coalition building—to counter inequities in access to clean energy.

How does BSR define climate leadership?

BSR believes that climate leadership means going beyond the minimum requirements of an SBTi Net-Zero Standard. We emphasize:

• Selecting a net-zero target year earlier than 2050 if a company’s footprint is largely in developed countries

• Setting and delivering an interim emission reduction target consistent with a 1.5°C trajectory

• Compensating for emissions outside the value chain enroute to your target year

• Implementing business transformation across functions

• Supporting communities which have suffered from climate injustice when implementing net-zero commitments

• Using a company’s influence to advocate for policy which advances climate justice and supports a just transition for all.

What are the main criticisms of net-zero targets, and what is BSR’s perspective on these criticisms?

Net-zero commitments are also increasingly subject to five criticisms which implementation must address to be truly credible and transformative.

Critique: Net-zero commitments divert attention from immediate abatement, effectively licensing short-term emissions.

Response: Companies with net-zero targets must also set and deliver an interim emissions reductions target following a 1.5°C trajectory, for example under the Science-Based Targets initiative, or as part of the Race to Zero campaign.

Critique: Net-zero commitments, which are typically based on a company’s fair share of global net-zero carbon dioxide by 2050, should not be inequitable between developed and developing countries.

Response: Companies whose emissions footprint sits largely in developed countries who have high historical emissions, should aim to achieve net zero ahead of 2050.

Critique: By focusing attention on removals which net out emissions in the target year, net-zero targets divert attention from immediate climate investments outside the value chain needed to keep 1.5°C within reach.

Response: Companies can dramatically increase their impact on the climate crisis by not merely abating emissions in the value chain on route to net-zero, but also compensating for emissions outside the value chain, for example by investing in climate solutions and methane reductions.

Critique: Net-zero commitments may greenwash business-as-usual action.

Response: Building a net-zero value chain requires genuine business transformation across functions, from supply chain engagement and procurement, to finance, and research and development and product design. Net-zero implementation then must demonstrate business transformation across these functions, including integration into the company’s business strategy with a clear climate action plan which has been vetted and approved by shareholders.

Critique: Net-zero commitments perpetuate climate and environmental injustice, for example in BIPOC and low wealth communities.

Response: Companies can support these communities through its net zero implementation. For example, renewable electricity can be purchased from companies with a proven track record of increasing energy access, carbon credits can be selected which benefit these communities, and low-carbon products and services can be procured in a manner which improves the equitable distribution of benefits of the net zero economy. This is where net-zero implementation strategies intersect with equity in the sustainability agenda.