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Business Fit for 1.5°C | Event summary

The will to act is a renewable resource!

In his opening address, Al Gore, CEO and founder of The Climate Reality Project, spoke candidly about the responsibility of the private sector in terms of meeting the climate targets that will safeguard our planet. At the same time, he pointed out that by adopting innovative solutions, businesses can remain competitive and profitable as they lead the transition to a clean energy future. With proper follow-through, the Sustainability Revolution will ultimately benefit businesses, employees, and communities.

Defining holistic business models

Why are emissions increasing when so many countries have defined climate neutrality targets? Jouni Keronen, CEO of the Climate Leadership Coalition, explained how inadequate carbon taxes and the lack of targets for carbon sinks are resulting in the ongoing subsidization of carbon products, meaning that emissions continue to rise despite net-zero targets in countries representing 90% of global GDP. In response to this challenge, the Climate Leadership Coalition is calling for robust carbon pricing instruments and greater investments in carbon sinks. While the task of governments is to set objectives and secure the necessary infrastructure, and while the role of cities and citizens is to accelerate and drive demand, the role of businesses is to invest and innovate. NESTE, for example, is developing sustainable aviation fuel made from waste and residues and is using waste plastic as a raw material. The company’s increased share price illustrates how sustainability really can be profitable. Other Nordic examples include SSAB, a company producing fossil-free steel from sustainable fuels, a process with a potentially massive impact in terms of global steelmaking; Spinnova, which makes textiles from wood and waste that have a far smaller footprint than cotton; the creation of solein, a sustainable protein made from solar-generated electricity and air; and the K Group, a retail company that encourages its customers to make sustainable choices. These companies are the “early birds,” implementing pioneering solutions that make good business sense.

Kirsten Dunlop, CEO of EIT Climate KIC, emphasized the need for systemic changes and a profound shift in how we perceive the role of innovation. Business paradigms must be transformed, with a structural shift to regenerative models and new patterns of consumption.

Eleni Michalopoulou of the World Economic Forum and the Stockholm Environment Institute then outlined the close links between air pollution and climate change, pointing out that while there are targets and guidelines for reducing GHG emissions, a clear plan is also needed to tackle the 7 million deaths attributed each year to air pollutants. She described how the Alliance for Clean Air has developed a guide to help businesses quantify their emissions of air pollutants as an integral part of their broader net zero strategies.

Sharing tools for transition

A panel of three speakers presented the available tools that can be used by businesses to set and meet ambitious pledges. Alberto Pineda described how the Science-based Targets Initiative works with companies to drive the adoption of targets that are consistent with the level of decarbonization that is urgently needed. The initiative’s newly developed standard identifies the key aspects of credible net zero targets, identifies tools for mitigating carbon change, and incentivizes companies to undertake short-term actions as well as making long-term capital investments. Science-based target setting is a growing movement: companies are keen to play their part and a wealth of guidance and support is available.

Swedish entrepreneur Katharina Paoli then spoke about the value of using “smart nudges” to achieve behavioral change. Behavioral psychology and choice architecture can be used to design situations in which it is easier for people to make the right decisions. One example is the visualization of complex information, such as CO2 emissions: while quoting lists of figures may have little impact on behavior, illustrating transportation options on an interactive map is more likely to provide the digital nudge that will encourage individuals to adopt smarter travel habits.

Ingmar Rentzhog’s presentation focused on communicating to businesses how it is profitable to save the planet and extremely expensive to destroy it. As a way of driving change, the social medial review platform he has pioneered makes it possible to give “climate love” to companies adopting positive solutions, and a “climate warning” to companies that need to speed up their efforts.

Accelerating regulatory opportunities

Chiara Martinelli, director of Climate Action Network Europe, spoke of the importance of the EU Climate Package for businesses that are facing economic losses as a result of climate change. However, while the target of 55% GHG emissions reductions agreed by the EU by 2030 does create opportunities for businesses, this needs to be turned into a “Fit for 1.5°C” package to ensure that the level of urgency is met, which will in fact mean reductions of 65%. The presentation made by Antoine Colombani, a member of the cabinet of Frans Timmermans, first vice president of the European Commission, focused on the Effort Sharing Regulation, which is part of the Fit for 55% package. The ERS sets national targets for reductions in sectors that fall outside the scope of the Emissions Trading System. A separate trading system for road transportation and buildings allows for the capping of emissions in these two sectors, while the new system would go hand in hand with a social climate fund to redistribute the proceeds to affected households. New regulations are also planned in relation to vehicle emissions, infrastructure for zero-emission vehicles, energy efficiency in buildings, and the phase-out of fossil fuels in heating and cooling in order to achieve the target of 55% reductions by 2030. The proposals that are currently being negotiated, form an integrated package including pricing incentives and regulatory instruments, as well as targets and the measures required to reach them.

Changing for good

In the context of a roundtable in which the three participants represented employees, nature, and culture, Macdara Doyle of the Irish Congress of Trade Unions first outlined the situation in Ireland with respect to the just transition. While progress in Ireland is positive on paper, with a new climate law and action plan and binding targets in place, the reality on the ground is very different. Peat harvesting, for example, was halted abruptly, with the rapid disappearance of 1,000 jobs despite the fact that workers in the sector had already negotiated a gradual wind-down to embrace the change they knew was inevitable. Employees who had been enthusiastic about climate action were left without support from government and management, eroding trust in the transition process. In this context, communication is essential: employees need to have a role in shaping their own future, making them agents of change rather than passive observers of the changes being forced on their communities.

Professor Fern Wickson, representing the voice of nature, offered three key considerations: 1. everything is connected: the climate crisis cannot be tackled in isolation but must be approached in an integrated way along with issues such as biodiversity loss, injustice, inequity, and pollution; 2. nature works in circles rather than straight lines: everything that is produced comes back as either nourishment or pollution; and 3. doing no harm is no longer sufficient: we must actively restore and regenerate to compensate for damage already done, by opening up multiple pathways and listening to multiple voices.

Representing the voice of culture, Caitlin Southwick, founder of Ki Culture, talked about the potential contribution that can be made to the climate conversation by the cultural sector, where skills such as creativity, communication, problem-solving, and empathy can help to give audiences a sense of ownership and agency.

Looking forward

The three panelists stressed the importance of starting conversations and building awareness in a positive way, providing positive narratives, nudges, and ideas, showcasing solutions and celebrating success. There is no room for blame: finding fault is unproductive and rights and wrongs are rarely clear cut. Ambiguities can and should be acknowledged while empowering people through stories of hope to co-create a vision of the future.

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