World leaders, business executives and activists are back in New York City for Climate Week and the United Nations General Assembly — and everybody's talking about California. 

In case you missed it: Last week California legislators approved a pair of bills that require all large public and private companies operating in the state to disclose their greenhouse gas emissions to investors and the public. Business leaders organized by the sustainability nonprofit Ceres <a href="https://www.ceres.org/sites/default/files/Asm%20Approps%20Major%20Companies%20and%20Institutions%20Support%20SB%20253.pdf" target="_blank">came out in support of the bill</a> before it passed. They say their progress in tracking and disclosing the full scope of their emissions proves it's possible for other companies to do the same. 

As lawmakers and business coalitions enjoy a victory lap at Climate Week, we're taking a closer look at the landmark legislation and the ripple effects it could send well outside the Golden State. 

<h2>Why corporate climate disclosure matters</h2>

"There was a billion-dollar weather and climate disaster event every four months in our country in the 1980s. By 2010, there was one every three weeks," Mindy Lubber, CEO and president of Ceres, said at a press conference on Tuesday. "This year, we've experienced more than a billion-dollar event every two weeks." 

Indeed, extreme weather cost the United States <a href="https://weather.com/news/climate/news/2023-08-08-billion-dollar-disasters-january-july-2023-noaa#" target="_blank">nearly $40 billion</a> in the first eight months of 2023 alone. But the impacts these disasters and other climate disruptions have on corporate bottom lines is less understood, because many companies don't calculate it. "People are operating in the dark," Lubber said. "I can tell you of the 700 investors we work with, they want to understand: What are the risks from climate [change], and what are the opportunities? They cannot make a decision about building a portfolio without adequate information." 

In 2022 surveys, <a href="https://www.citizen.org/news/survey-reveals-retail-investors-want-sec-to-require-climate-disclosure/" target="_blank">70 percent of U.S. investors</a> said they would support mandatory climate disclosure in the U.S. 

<h2>What the California climate disclosure rules require</h2>

The two recently passed bills — <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB253" target="_blank">Senate Bill 253</a> (SB 253) and <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB261" target="_blank">Senate Bill 261</a> (SB 261) — are on Gov. Gavin Newsom's desk, and <a href="https://www.politico.com/news/2023/09/17/newsom-corporate-climate-disclosure-bill-00116439" target="_blank">he confirmed this week</a> that he will sign them. The bills require the California Air Resources Board to develop rules that mandate public and private companies with annual revenues exceeding $1 billion to disclose their greenhouse gas emissions. 

Crucially, the rules will cover emissions created upstream and downstream in a company's value chain (known as Scope 3). Though Scope 3 comprises <a href="https://www2.deloitte.com/uk/en/focus/climate-change/zero-in-on-scope-1-2-and-3-emissions.html" target="_blank">around 70 percent of corporate emissions</a> on average, it's <a href="https://www.iea.org/data-and-statistics/charts/number-of-companies-in-the-s-and-p-500-reporting-energy-and-emissions-related-metrics" target="_blank">left out by many companies</a> that currently disclose. 

The rules will apply to around 5,500 companies doing business in California, lawmakers said. Companies will be required to disclose emissions from their direct operations (known as Scope 1) and those from the electricity they purchase (known as Scope 2) by 2026. Mandatory Scope 3 disclosure will come into force a year later, with financial penalties waived for three years as a transition period.

"SB 253 does not dictate how they should reduce their carbon emissions. But by making clear that within a couple of years these emissions are going to become public, the corporations have a huge incentive to innovate to reduce those emissions," said California state Sen. Scott Wiener, who represents San Francisco and parts of San Mateo County. "We're going to see in a few years who's walking the walk and who's just talking the talk. And I hope that after a few years before the implementation, the companies that are walking the walk are going to be a much higher number than they are today."
<figure role="group"><img alt="attendees at climate week 2023 clap as california governor gavin newsom says he will sign bills that mandate climate disclosure" data-entity-type="file" data-entity-uuid="c08014e2-3252-42b3-abdd-39d43a231ea2" src="/sites/default/files/inline-images/attendees%20at%20climate%20week%202023%20clap%20as%20california%20governor%20gavin%20newsom%20says%20he%20will%20sign%20bills%20that%20mandate%20climate%20disclosure.jpg" width="1500" height="1000" loading="lazy" /><figcaption>Attendees are all smiles during California Gov. Gavin Newsom's remarks at Climate Week. (Image: <a href="https://www.flickr.com/photos/theclimategroup/53195269458/in/photolist">The Climate Group</a>/Flickr)</figcaption></figure><h2>Insiders predict a race to the top that goes way beyond California</h2>

Lawmakers say Californians will benefit directly from the new climate disclosure rules. "As a member who currently represents environmental justice communities who live near the harbor — who are seeing the emissions and feeling them every single day, the impacts of bad air quality, as well as the severe, tangible impacts of climate change — this will deeply, deeply benefit my constituents and constituents across the state of California," said state Sen. Lena Gonzalez, who represents Long Beach and Southeast Los Angeles. 

But given California is the fourth largest economy in the world, the implications could stretch far beyond its own borders. "As disclosure becomes real, some companies are going to step up, clean up and really lead, and other companies are going to be forced to do the same," said Mary Creasman, CEO of <a href="https://envirovoters.org" target="_blank">California Environmental Voters</a>, which lobbies in support of climate and environmental legislation in the state. "There's going to be pressure out there like we've never seen to change business-as-usual." 

The fact that thousands of multinational companies will be compelled to disclose their emissions may also make it easier for other markets to pass similar legislation. "SB 253 marks a major advancement in detailed emissions disclosure, potentially revolutionizing corporate responsibility in combating climate change for the world, not merely California," said Kentaro Kawamori, CEO of the carbon accounting firm Persefoni. "As the global community confronts the pressing need for climate action, California's leadership might inspire comparable efforts in other states and countries."

Markets including the <a href="https://www.anthesisgroup.com/mandatory-tcfd-climate-risk-reporting/#:~:text=TCFD%2DAligned%20Disclosures%20become%20Mandatory,on%20Climate%2Drelated%20Financial%20Disclosures." target="_blank">U.K.</a>, <a href="https://www.ey.com/en_jp/sustainability/whats-next-for-japanese-sustainability-disclosure-standards#:~:text=Under%20the%20rules%2C%20all%20listed,%2C%20Governance%20and%20Risk%20Management)." target="_blank">Japan</a> and the <a href="https://www.cooley.com/news/insight/2023/2023-08-11-eu-adopts-long-awaited-mandatory-esg-reporting-standards#:~:text=Disclosures%20on%20climate%20change%20mitigation,gas%20emissions%20and%20transition%20risks." target="_blank">European Union</a> already moved to mandate climate disclosure within the past two years. While it's too early to say whether those rules amounted to this type of sea change, early evidence indicates it is a likely outcome. "We don't have a lot of data yet as to how it has changed things," Lubber told us. "But we do know when a company ... makes a declaration and commitment to doing it — and that's public and you're showing how you're going to do it and you're accountable — it drives behavior change. And it probably does that as well as anything else I can think of." 

<h2>What about the SEC? </h2>

Last year the U.S. Securities and Exchange Commission (SEC) <a href="https://www.triplepundit.com/story/2022/-sec-climate-change-denial/739811" target="_blank">issued draft language</a> for mandatory climate disclosure rules that would apply to all large publicly-traded companies operating in the country. The release date for the final rule has been pushed back several times and is now expected toward the end of this year. It's also still up in the air as to whether the final SEC rule will include mandatory reporting of Scope 3 emissions. 

But if and when the SEC does mandate climate disclosure, companies will be well positioned to translate the work they're doing in California to comply with the federal rules. 

"For us as an industry association, it's very important to have harmonization among reporting requirements," said Chelsea Murtha, director of sustainability for the American Apparel and Footwear Association, which represents more than 1,000 brands and <a href="https://www.aafaglobal.org/AAFA/AAFA_News/2023_Press_Releases/Industry_Groups_Support_CA_Climate_Data_SB253.aspx" target="_blank">came out in support</a> of the legislation. "We worked with Sen. Wiener and Ceres to get language in the bill that made sure that if you were reporting to the SEC and that was a substantially similar disclosure, it would work in California. We were really glad to see pieces like that come together and make this a process that was really designed to help businesses succeed."

<h2>The bottom line: Climate disclosure won't fix it, but it's a major step forward</h2>

Disclosure won't solve our climate problems, but in the spirit of sunlight as a proverbial disinfectant, transparency is a crucial piece of the puzzle. "There's no doubt that it's only a first step," Lubber told us. "Once companies analyze their risk and measure it, they can then manage it. It's very hard to come up with a climate plan to act without knowing what the problem is."

Ceres provides <a href="https://www.ceres.org/resources/reports/climate-transition-action-plans" target="_blank">toolkits</a> and direct consultation to help companies translate the data from their disclosures into time-bound <a href="https://www.triplepundit.com/story/2023/climate-transition-action-plans/783621" target="_blank">climate transition plans</a>, and it will continue to do so as California's rules come into force, Lubber said. 

"The public, investors and regulators want to know what is the risk to a company, and that's why they have been calling for climate risk disclosure," she told us. "Good information is just that — not the panacea, but it provides the base to make smart decisions about managing carbon emissions."

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California's Climate Risk Disclosure Rules Are the Talk of Climate Week

Reforestation pledges are perceived as a politically neutral, publicity-friendly way for corporations to demonstrate their commitment to reduce greenhouse gas emissions in the fight against climate change. But forestry experts have begun drawing attention to significant shortcomings in conventional tree-planting programs. Instead, they advocate for a new approach, called forest landscape restoration, that provides for overall ecosystem health and community well-being.

<h2>What’s right with planting trees</h2>

The benefits of trees have been part of the public conversation for generations, fostered in part by corporate tree-planting programs that emphasize soil retention, water conservation and runoff prevention.

In contrast, the carbon sequestration benefit of trees has not been on the public radar until recent years. Nevertheless, scientists dating back to the 17th and 18th centuries were already beginning to piece together the elements of photosynthesis, in which trees and other plants capture and store carbon dioxide from the air.

By the late 19th century, scientists also assembled evidence that human-related carbon emissions were producing a “<a href="https://earthobservatory.nasa.gov/features/Arrhenius/arrhenius_3.php" target="_blank">hot-house effect</a>,” leading to a rise in global temperatures. These early observations were finally quantified in the 1950s when methods to measure the impact of tree and plant growth on global carbon dioxide levels emerged.

Though it took another 60 years or so, the scientific quantification of <a href="https://www.fs.usda.gov/features/trees-are-climate-change-carbon-storage-heroes" target="_blank">tree-based carbon sequestration</a> set the stage for business leaders to champion large scale tree-planting programs as a climate action tool.

<h2>What’s wrong with planting trees</h2>

<a href="https://www.triplepundit.com/story/2020/mastercard-ceo-climate-action-about-survival-not-altruism/86286" target="_blank">Corporate interest</a> in tree-planting jumped in recent years alongside new research demonstrating that large-scale planting programs could become a powerful carbon sequestration strategy.

In 2019, for example, a Swiss research team estimated that an area of the Earth equivalent to the U.S. could be available for reforestation, <a href="https://ethz.ch/en/news-and-events/eth-news/news/2019/07/how-trees-could-save-the-climate.html" target="_blank">capturing 300 billion metric tons of carbon</a> from the atmosphere as the new trees mature.

Corporate interest in tree-planting is also supported by high-profile environmental groups, non-governmental organizations and other groups such as the World Economic Forum, which set a <a href="https://www.1t.org/" target="_blank">trillion-tree goal</a> at the 2020 launch of its “1t” reforestation initiative. 

However, by 2020 red flags were already beginning to emerge. One key issue is WEF’s focus on planting trees to produce lumber, paper and other forest products. In that context, it is no surprise that the initiative <a href="https://www.npr.org/2020/01/22/798644791/president-trump-climate-change-and-1-trillion-trees" target="_blank">received support</a> from former Republican President Donald Trump, despite his long record of <a href="https://www.nytimes.com/2016/11/19/world/asia/china-trump-climate-change.html" target="_blank">undermining climate science</a>.

In voicing support for the WEF initiative, the Trump administration also referenced <a href="https://trumpwhitehouse.archives.gov/articles/president-trump-signs-one-trillion-trees-executive-order-promoting-conservation-regeneration-nations-forests/" target="_blank">forest commodities</a> and related key words like <a href="https://www.doi.gov/pressreleases/trump-administration-furthers-commitment-one-trillion-trees-initiative" target="_blank">forest management and productivity</a>. Similarly, the 2020 “Trillion Trees Act” sponsored by Republicans in the House of Representatives <a href="https://www.congress.gov/bill/117th-congress/house-bill/2639/text" target="_blank">commingled forest products with environmental goals</a>.

In July, <a href="https://apnews.com/article/climate-change-republicans-trillion-trees-01e455acce4397c0376e82bfa18b72c2" target="_blank">Associated Press reporter Stephen Groves</a> noted that the trillion trees bill, which is hung up in committee, “checks the right boxes” for Republicans. “It is friendly to the timber industry and touts a climate solution — sequestering a massive amount of carbon from manmade emissions — that would also partially alleviate the need to wean the country off fossil fuels,” Groves wrote.

<h2>The need for a more holistic approach</h2>

On Friday, The New York Times published an <a href="https://www.nytimes.com/2023/09/15/opinion/wildfires-treeplanting-timebomb.html?unlocked_article_code=6Yh-kEGxW1PU4zsgfGMex2V319Dt7bubeg1qEWjwL_tRWvz4q-AvqUpOS6TXUNg0qLM2WPr8RglSj5SncGfGbvO4w5MbkNnZYl7Umnq81g6oVw6zV3r04GfaLQj5EFImcQQolc35eRuGAkf2kbG1No5fIEaaLGTUk-vJghO31RB9BYxvhm8lr8GW3_dUvbNuzaXDYU-tUPH2OU1pwKKUazLblVUbXJXJSh8tt76LcVEotISV5zFIgI-P9Ym8Ttr-Kt7l8Efs3A2fNKk2dw5NRIem7Q4bDMly7JoVQbJq3x9zX3WcII5Z7YEB3_yIMZsypTPJ19pXkVziHZ8IXygeO3dE4mccEw&amp;smid=url-share" target="_blank">op-ed by the essayist Claire Cameron</a>, who explained one good reason why entwining forest commodities with tree-planting initiatives does not necessarily result in an environmentally desirable outcome. That’s because commodities reforestation tends to focus on just one species, with an eye on future harvests.

“Forestry experts understand that a monoculture of trees — like the black spruce saplings we were planting, six feet apart in neat rows — has made wildfires <a href="https://www.bcfpb.ca/wp-content/uploads/2023/06/SR61-Landscape-Fire-Management.pdf" target="_blank">more likely</a> and much worse when they occur,” Cameron wrote, in recollection of the summer she spent planting trees in Canada. The area had been clear-cut, and it would be harvested again once the new trees matured. 

“Much later, I learned that the trees we were planting, black spruce, are so combustible that firefighters call them gas on a stick,” she added. 

Cameron also drew attention to a June report released by the independent watchdog organization Forest Practices Board of British Columbia, which linked monoculture tree-planting programs to an <a href="https://www.bcfpb.ca/wp-content/uploads/2023/06/SR61-Landscape-Fire-Management.pdf" target="_blank">increased risk of severe wildfires</a>.

<h2>A more sustainable approach: Forest landscape restoration </h2>

In a naturally regenerated forest, fire-susceptible trees would be cushioned by other fire-resistant species that retain more moisture. This type of consideration is at work in the emerging field of forest landscape restoration.

“More than just planting trees, forest landscape restoration aims to restore the natural functioning of ecosystems in deforested and degraded landscapes, while also supporting the livelihoods and well-being of the people who live there,” Fran Price, who leads the WWF's Global Forest Practice initiative, <a href="https://sdg.iisd.org/commentary/guest-articles/turning-commitments-into-leadership-through-forest-restoration/" target="_blank">wrote in an op/ed</a> for the International Institute for Sustainable Development.

Forest landscape restoration does not preclude human activity in forests. Instead, the focus is on engaging local communities in long-term, <a href="https://www.iucn.org/our-work/topic/forests/forest-landscape-restoration" target="_blank">sustainable forest management practices</a>, aided by the latest science as well as Indigenous and traditional experience.

Among other case studies, WWF cites a <a href="https://wwf.panda.org/discover/our_focus/forests_practice/forest_climate/forest_climate_publications/?3449441/Inspiring-Practices-Local-Livestock-Farmers-Lead-the-Way-in-Implementing-Sustainable-Land-" target="_blank">pilot program</a> in the Amazonian province of Tahuamanu, Peru, where to livestock farmers are implementing practices aimed at reducing the rate of deforestation while increasing productivity.

<h2>Challenges and opportunities: It’s all about the seeds</h2>

Corporations seeking to support forest landscape restoration initiatives should be aware that there is no one-size-fits-all solution.

“Community-based forest management is widely recognized as one of the more effective measures for stopping deforestation,” <a href="https://forestsolutions.panda.org/case-studies/community-forestry-in-the-mekong" target="_blank">WWF observes</a>. “However, the effectiveness of community management is dependent upon the broader socio-economic context, including tenure type, community governance, local capacity, opportunity cost and incentives.”

Business leaders can ensure the success of reforestation initiatives by raising the engagement of these under-represented local communities.

For example, one key factor in a successful, large-scale landscape restoration initiative is the availability of a <a href="https://www.triplepundit.com/story/2023/native-seeds-shortage/765596" target="_blank">sufficient supply of native seeds</a>.

A research team recently <a href="https://www.mdpi.com/1424-2818/15/9/981" target="_blank">studied the challenges</a> besetting seed supply systems in Burkina Faso, Cameroon, Ghana and Kenya, which  set a collective commitment to restore 24.1 million hectares (more than 93,000 square miles) of degraded land. Challenges they face along the way include a “lack of policies, capacity building, financial investment and involvement of local community members,” the researchers observed. 

“A greater involvement of stakeholders from different societal levels and sectors would be an important step in building a better foundation for further capacity development,” they added.

They identified building up a community supplier network for natives seeds as a key step toward achieving successful restoration initiatives. That provides several opportunities for corporate involvement, including help with procuring digital tools and mobile phones. 

In addition to increasing the supply of high-quality native seeds, the network would provide new income opportunities for local communities and incentivize the conservation of native species. 

As the forest landscape restoration movement grows, business leaders have new opportunities to demonstrate that their understanding of tree-planting has also matured into a more sustainable model that avoids the environmental mistakes of the past and focuses on community well-being.

Image credit: <a href="https://unsplash.com/photos/3BlVILvh9hM" target="_blank">Olena Bohovyk</a>/Unsplash

The Forest Landscape Restoration Movement Fills the Tree-Planting Pledge Gap

Most people wouldn’t see corporate advocacy as a source of great hope for the world, as stories about business efforts to block change continue to make headlines. <a href="https://www.ft.com/content/a7d272c8-a1e0-4975-92de-88c99d763157" target="_blank">The Financial Times</a> reported that major chemical and plastics manufacturers are lobbying to weaken a proposed U.N. treaty on plastics. <a href="https://techcrunch.com/2022/04/22/google-facebook-apple-eu-lobbying-report/?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAABlpcOnp2pY6A3UA5qxB9b2IO8-JsWEK_qVcrn38vmIC-e65F4yF837XzaZjLfNWxTM4CNOlGIEuXq-0hnObKgWhp68aoQ8RWw8gQn6xkQIFGFbvBEwPJAiQUX3WZ7WX2MUZ4GRN6YL6XsWvza76bG_eumrYyTX2yad126zgB1VB" target="_blank">TechCrunch</a> reported a concerted push by the major tech firms to "weaken EU rules" on data and consumer privacy. <a href="https://qz.com/ipcc-report-on-climate-change-meat-industry-1850261179" target="_blank">Multiple outlets</a> described how lobbying from the meat industry caused the removal of plant-based policy recommendations from the latest Intergovernmental Panel on Climate Change (IPCC) report.

This is everything people distrust about business: working to serve its own direct interests and delay action, block change and dilute progress on major societal issues. And it lays the ground for populist rallying cries to "drain the swamp."

Unsurprisingly, this isn’t the kind of corporate advocacy we’re recommending. In our new book, "The Activist Leader," we describe how businesses can take action to make a meaningful impact on societal issues — and can draw on that experience to add their voice to the public discourse in order to mobilize further action. When this happens, advocacy becomes an important contribution that a business can make. The way businesses have spoken out on LGBTQ+ inclusion shows how this can work in practice. 

<h2>LGBTQ+ rights: Businesses speaking out to advance inclusion </h2>

Against a backdrop of steady progress toward inclusion globally, millions of LGBTQ+ people are experiencing a new intensity of discrimination, harassment and violence. In some regions, LGBTQ+ rights have become a geopolitical wedge issue, an assertion of national values in opposition to a global culture: in Eastern Europe, for example, or some African countries. Against this backdrop, many global businesses struggle to reconcile how they operate in these territories with their vocal support for LGBTQ+ inclusion as a company.

As this situation developed, we heard from business leaders wanting to speak out but finding it hard to do so — not only because of the potential impact on their business, but also because of the safety of their employees. To help find a coherent and collective business voice on this subject, Brunswick established <a href="https://www.brunswickgroup.com/open-for-business-i5372/" target="_blank">Open For Business</a> as a coalition of global companies working to advance LGBTQ+ rights even in challenging countries. 

The Open For Business approach centers on data-driven advocacy: Rather than become embroiled in a clash of moral systems, the coalition makes the case that open, inclusive societies are better for business and better for economic growth. Marshalling evidence that shows how open, inclusive policies are associated with increased levels of entrepreneurialism, stronger high-value business sectors, greater foreign direct investment and, ultimately, greater economic competitiveness and resilience resonates with economic policymakers. The coalition has grown to more than 40 high-profile global companies that include Accenture, Burberry, Diageo, Facebook, GSK, Google, Lego, Mastercard, McKinsey and Unilever. 

The data-led approach has delivered a track record of successful advocacy. Used by local frontline nonprofit groups, highly vocal global LGBTQ+ champions and business leaders alike, Open For Business reports have become part of court proceedings in Uganda, Hong Kong and India, each with positive rulings for LGBTQ+ equality. They’ve been part of winning campaigns for marriage equality in Costa Rica, the Czech Republic and Taiwan. The reports on the economic case for LGBTQ+ inclusion have made headlines and changed the conversation in countries in East Africa, Eastern Europe and the Caribbean. 

But why would the global drinks business Diageo, or the tech giant IBM, or the cosmetics brand L’Oréal speak out on LGBTQ+ rights? At first pass, it might seem somewhat random. However, for these companies and others in the coalition, their advocacy is grounded in strong positions and hard work to establish an inclusive culture for their own workforce, often built up painstakingly over years.

It’s not a sudden response to media headlines. They know their employees want to know where they stand on this issue, in the light of their stated principles as global companies. They feel conflicted by the rise in anti-LGBTQ+ sentiment and policies in some places that are dissonant with their long-held principles and are seeking mechanisms that enable them to speak up.

The power of the collective voice elevates the potential of each individual company to advocate for inclusion to policymakers and other influential corporate stakeholders. 

Stepping into the public arena, armed with data and standing in common cause with partners, underpins the credibility of the company’s voice – on any subject from net zero to inclusion – and makes issue-led advocacy an impactful element of activist leadership. 

This story was adapted from "<a href="https://www.amazon.com/Activist-Leader-Mindset-Doing-Business-ebook/dp/B0B4HSMLXT" target="_blank">The Activist Leader: New Mindset for Doing Business</a>" by Jon Miller and Lucy Parker, published this week by HarperCollins. Copyright © 2023 by Lucy Parker and Jon Miller. Reprinted courtesy of Harper Collins Inc 

Image credit: <a href="https://unsplash.com/photos/i6cYSbuyYmk" target="_blank">yyananran</a>/Unsplash

LGBTQ+ Inclusion and a New Form of Corporate Advocacy 

As the <a href="https://www.triplepundit.com/story/2023/business-leadership-climate-change/770991" target="_blank">material business risks</a> from climate change become increasingly clear, <a href="https://www.accenture.com/us-en/insights/sustainability/reaching-net-zero-by-2050#:~:text=More%20than%20a%20third%20(34,sophisticated%20measures%20cut%20even%20faster." target="_blank">more than a third</a> of the world’s largest 2,000 companies have set goals to reach net zero emissions by 2050 or sooner. Many companies have gone even further, setting emission reduction targets that are in line with what the latest climate science says are needed to meet the goals of the Paris Accords and limit global warming to 1.5 degrees Celsius. They are also <a href="https://www.triplepundit.com/story/2023/corporate-climate-disclosures/777106" target="_blank">disclosing information</a> about the impacts of their business on carbon dioxide and other greenhouse gas emissions, water quality and scarcity, and nature.  
  
This is tremendous progress and highlights that companies see opportunities to be had in tackling these risks. But awash with targets and goals, investors and other stakeholders still have one core question: What meaningful and measurable actions are companies taking today, and in the near-term, to meet these targets?  
  
Climate transition action plans have emerged as a leading framework for companies to identify, plan, and implement strategies that reduce climate-related risks and maximize opportunities.  These actions should be specific, time-bound and, if possible, quantified to detail the emissions reductions that companies expect to achieve.  
   
While targets and disclosures are both deeply important, too often companies lack a forward-looking strategy that defines how they will work to achieve these targets in the next three to five years — both within and beyond their operations.   
  
In fact, organizations that analyze and track climate action — such as the Science-Based Target initiative, Net Zero Tracker, Transition Pathway Initiative and CDP — have found that an alarming number of companies have yet to develop these plans. For instance, out of nearly 19,000 companies that annually report their climate impacts to CDP, <a href="https://www.cdp.net/en/articles/climate/new-cdp-data-shows-companies-are-recognizing-the-need-for-climate-transition-plans-but-are-not-moving-fast-enough-amidst-incoming-mandatory-disclosure" target="_blank">only 13 percent</a> have disclosed a sufficient number of indicators to be considered a credible plan — and only 0.40 percent of companies met all 21 of CDP’s key indicators.  
  
Every company knows that delivering on a goal takes a plan. Just as companies set goals and develop detailed plans for driving sales, investing in new markets or recruiting talent, they also need a detailed climate action transition plan for delivering on their goals for slashing emissions and addressing their exposure to climate risk.  
  
And the pressure on companies to deliver these plans is ramping up. In 2022, Ceres counted just nine investors asking companies they held to publish transition plans via shareholder resolutions. In 2023, that number jumped to 61.  
  
Addressing the Ceres Global climate conference in March 2023, Mary Schapiro, vice chair for global public policy at Bloomberg and vice chair of the Glasgow Financial Alliance for Net Zero, said: "If 2021 was the year of mainstreaming net-zero commitments and 2022 was the year of target-setting and developing the frameworks to operationalize these commitments, we are now calling 2023 the year of transition plans."  
  
The momentum is building as investors are already implementing transition action plans to mitigate the risks climate poses to their portfolios. To help companies create and implement these plans to achieve their emissions reductions targets, <a href="https://www.ceres.org/climate/ambition2030" target="_blank">Ceres’ Ambition 2030 initiative</a> and our partners have developed action-oriented guidance and tools. At a high level, we outline four components for every transition plan:  

<ol><li>Actions a company will take to reduce its Scope 1, 2 and 3 emissions, covering its entire supply and value chains, in line with limiting global temperature rise to 1.5 degrees Celsius. </li>
	<li>Actions to identify, manage, and address climate risks and opportunities and incorporate these considerations into core business strategy and governance. </li>
	<li>Actions to advocate for public policies that support and enable the achievement of corporate climate targets and economy-wide emissions reductions.</li>
	<li>Actions to consider and support workforces, suppliers, customers, impacted communities and other stakeholders in the transition to a net-zero-emissions economy. </li>
</ol>The time for action is now, and we encourage all companies to follow these guidelines as they develop the plans to make their targets a reality. 

Image credit: <a href="https://unsplash.com/photos/0w-uTa0Xz7w" target="_blank">Karsten Würth</a>/Unsplash

Moving Beyond Targets: The Time is Now for Climate Transition Action Plans 

“Desperation is inspiration,” New York City Mayor Eric Adams said today as he convened multiple sustainability events running parallel to the United Nations General Assembly.  

At the Concordia Summit, a gathering of cross-sector social impact professionals, the mayor of the nation’s largest city alluded to his own diabetes diagnosis as he urged action on climate, immigration and social inequity. 

“My body looked fine but was breaking down internally. I was too busy taking selfies. I should have taken internal selfies,” Adams told a standing room crowd at a Sheraton New York Times Square hotel ballroom. “It is, to me, the analogy of our globe. Our planet is our body.”
<figure role="group"><img alt="nyc mayor Eric adams speaks at climate week" data-entity-type="file" data-entity-uuid="d90adb80-e531-4f0b-a835-f5730d52071e" src="/sites/default/files/inline-images/eric%20adams%20climate%20week.jpg" width="1579" height="1999" loading="lazy" /><figcaption>New York City Mayor Eric Adams speaks to the press along the sidelines of Climate Week and the United Nations General Assembly. (Image courtesy of the author)</figcaption></figure>Adams, who said he overcame diabetes by adopting a plant-based diet and losing 30 pounds, took a bow for introducing a vegetarian menu to city-owned hospitals, and to public schools on Mondays and Fridays. 

The first-term Democrat used the Concordia address to take aim at stable, affluent nations for failing to fight harder to slow global warming, referencing smoke from Canadian wildfires and mass migration from weather- and war-ravaged nations as symptoms being felt in New York. 

“Walls, boundaries and geographic lines are not going to curtail the crises,” he said.

In addition to the Concordia Summit and the U.N. General Assembly, New York is host this week to the Clinton Global Initiative, Sustainable Development Goals Leaders Summit, numerous Climate Week events and the Global Citizen Festival. TriplePundit and its parent company, 3BL, will be there and bring the relevant news to you across our channels.

NYC Mayor on Climate Crisis: ‘Desperation is Inspiration’

Textile production uses an enormous amount of water. At <a href="https://archive.ellenmacarthurfoundation.org/assets/downloads/A-New-Textiles-Economy.pdf" target="_blank">93 billion cubic meters each year</a>, that’s 4 percent of all freshwater utilized worldwide. From the farm to the manufacturing plant, water is an integral part of the textile industry. If not managed responsibly, this can cause scarcity and competition for limited resources in regions where textiles are produced.

<a href="https://www.welspunindia.com/" target="_blank">Welspun India</a>, a home textiles supplier for numerous brands on the international market, has taken an innovative approach. As a result, it uses zero fresh water during the manufacturing process. And while the same method could be utilized by more manufacturers worldwide, it’s unlikely to be emulated on a large scale so long as quarterly earnings take precedence over long-term sustainability.

“You might say that you created a sustainable product, but it's not a sustainable product when you create it in a facility which is not sustainable,” Dipali Goenka, CEO of Welspun India, told TriplePundit. 

<h2>Socially responsible water usage</h2>

The road to freshwater-free textile manufacturing began in 2003 with the need to get factories up and running in an area that had been devastated by an earthquake years earlier. Supporting the community was also imperative to Welspun's operation in the Kutch region of Gujarat. “Organizations cannot work in isolation, they need … everybody together,” Goenka said. “So that's what we did. We built up communities, setting up schools there, empowering women.”

Welspun also recognized that it couldn’t monopolize the water supply in such an arid region. “Textiles are a big guzzler of water,” she explained. “There's one river that feeds that area." The Narmada River is known as a "<a href="https://timesofindia.indiatimes.com/city/ahmedabad/narmada-gujarats-lifeline-that-defines-political-currents/articleshow/96044314.cms" target="_blank">lifeline</a>" for the Indian states of Gujarat and Madhya Pradesh, stretching more than 800 miles and providing water to hundreds of communities. "We realized as, an organization, we had a huge responsibility," Goenka said. "If we are going to guzzle that much water and the communities will go without water, how fair is that?”

In order to solve the water problem, the company built a sewage treatment plant to process wastewater from three towns in the Kutch region. On top of the potable water that comes out of it, the municipalities are also paid a commission. It’s a win-win situation for the company, local communities and the region’s farmers.

“We can take the sewage from the communities and recycle it and use it back into our operation, so we don't use a drop of fresh water in our operations,” Goenka said. “We are really proud of it.”
<figure role="group"><img alt="Dipali Goenka, CEO of Welspun India" data-entity-type="file" data-entity-uuid="b382247e-3d41-477d-bdd0-f5ed3595d132" src="/sites/default/files/inline-images/Dipali%20Goenka%202.jpg" width="800" height="1200" loading="lazy" /><figcaption>Dipali Goenka, CEO of Welspun India.</figcaption></figure><h2>A community mindset</h2>

It’s a refreshing perspective that is a product of Welspun’s <a href="https://www.triplepundit.com/story/2023/busting-myths-esg/781471" target="_blank">environmental, social and governance (ESG)</a> policy to become an agent of change. And the stance is going strong since, keeping pace with the company’s growth. “The capacities that we have today, the magnitude is huge,” Goenka explained, adding that the company makes 1 out of every 5 towels in the U.S.

While the tactic sounds like a simple way for manufacturers to make a huge difference in developing regions where <a href="https://inweh.unu.edu/toward-a-world-free-of-untreated-wastewater-breaking-the-catch-22-situation-faced-by-developing-countries/" target="_blank">wastewater treatment is lacking</a> or insufficient, it also takes a substantial amount of purpose to put the future well-being of a community over immediate profit. And that’s something too many businesses still aren’t willing to do.

“It's a very heavy investment,” Goenka said, pointing to the need for a change in mindset. “Everybody has to look at becoming agents of change.” Instead of doing business for the sake of business itself, she wants to encourage companies to consider everyone involved and take the bigger picture into account.

Beyond the water treatment plant, Welspun also supports cotton farmers through teams and artificial intelligence (AI) dedicated to improving the sustainability of their agricultural practices. It also promotes certification with groups like the <a href="https://bettercotton.org/" target="_blank">Better Cotton Initiative</a>. “Better Cotton Initiative uses far lesser water than what a regular cotton crop would use,” she explained.

<h2>Community betterment doesn’t end with water</h2>

The company’s ESG initiative also seeks to uplift women in the community by providing village work centers where they can earn an income and gain financial literacy. Another initiative helps women make use of their backyards for income. “We help them learn how to use those … for kitchen gardens where they can sell and earn their livelihoods as well,” Goenka said, explaining that more than 45,000 women have been impacted through the company’s efforts.

“In the communities, we have two schools as well. But we also are reaching out to communities and impacting around 100,000 children,” she said, noting that Welspun reaches out with digital education as a part of its efforts.

Welspun India is demonstrating its dedication to ESG by focusing on the community as a whole. And where many corporations would have no problem using up scarce water resources to the detriment of the local people and farmers, the company’s refreshing perspective on corporate responsibility and long-term outcomes versus short-term profits has instead benefited those stakeholders.

Image courtesy of Welspun India

Looking Toward the Long-Term With Zero Fresh Water Textile Manufacturing

The <a href="https://www.grandviewresearch.com/industry-analysis/chocolate-market" target="_blank">$100 billion</a> chocolate industry is at a crossroads. Rising global demand for chocolate and other cacao products has <a href="https://www.foodpolitics.com/2020/12/the-cocoa-industrys-big-problems-farmer-poverty-and-child-labor/" target="_blank">failed to improve the livelihoods</a> of farmers in the main cacao-growing regions of West Africa and Southeast Asia. With increasing consumer demand for sustainable sourcing, along with growing awareness of labor and climate risks linked to tropical agriculture, the industry needs to shift, and fast. 

“Consumers are becoming more and more aware about sustainability,” says Alexi Ernstoff, global science lead at the sustainability consulting firm Quantis, who works with many companies in the cacao sector. “The longer companies wait, the more expensive and difficult it's going to become.”

Revelations about the <a href="https://www.triplepundit.com/story/2023/address-child-labor-cacao/780171" target="_blank">prevalence of child and forced labor</a> on cacao farms in West Africa, driven primarily by low prices, forced a reckoning around ethical sourcing across the industry. Media coverage of this made for embarrassing headlines for brands. And for parents, the thought of the chocolate they give their children being produced by another child living in poverty was powerful. 

“There are several reasons why cacao sourcing is challenging,” says Troy Pearley, executive vice president at the U.S. branch of fair trade chocolate purveyor <a href="https://www.divinechocolate.com/divine-world/us/our-story/" target="_blank">Divine Chocolate</a>. “One, it’s very difficult to earn a living income as a cacao farmer. They often struggle to meet their basic needs, and this creates challenges for farmers to properly maintain their family life and the upkeep of their farms.”

In the traditional model, most chocolate companies, and any users of cacao, purchase the ingredient from one of the big trading companies: Cargill, Olam and Barry Callebaut. Those companies collect cacao from countless farmers, often via a network of traders, meaning there is often limited visibility into their supply chains.

The truth is, brands are often as surprised as consumers when allegations of child labor, deforestation or human rights abuses are found along their supply chains. It’s a feature of a broken system, where price was the key factor, not sustainability, and due to brands lacking relationships with farmers.

But some companies, big and small, are returning to the field and finding ways to source directly, with real benefits for farmers. One is Divine Chocolate, a high-end chocolate brand founded in 2016 with the goal of doing business radically differently. From the start, it's taken a completely novel approach, eschewing the big traders entirely. To enable better sourcing, transparency and communication with cacao growing communities, Divine Chocolate works with groups like Fairtrade International, who work directly with farmers to meet a set of strict social and environmental standards. 

“Change cannot be made unless key stakeholders are engaging and recognizing that it’s our responsibility to be a catalyst for positive change within the cocoa sector and confection industry,” Pearley says.

Divine Chocolate started not in a factory in the U.S., but in the cacao farms of Ghana. The company's experts trained farmers to stop using pesticides, encouraged eco-friendly cultivation, and set up special units to ensure child labor could be prevented and that children could receive proper education. In recent years, they’ve started to promote agroforestry, growing cacao alongside natural forests in a mixed ecosystem. It’s far beyond the basic requirement of not sourcing from farmers using child or forced labor.

“You must be proactive, because the root cause of these issues within the supply chains is poverty,” Pearley says. 

Divine Chocolate is a relatively small player, and while its work has had an impact on communities, it’s not enough to shift the industry. But on the island of Sulawesi in Indonesia, the major chocolate manufacturer Mars is showing that even big brands can source directly, with clear benefits for both profit and sustainability. 

Mars set up its own cacao gathering and processing facilities in Sulawesi over recent years, buying directly from farmers, not traders, as it had done before. This allows the company to help farmers invest in better-quality cacao — for example by purchasing better agricultural inputs or training in new techniques, says a spokesperson for Mars Indonesia. It also means Mars can ensure farmers are meeting <a href="https://gbr.mars.com/sustainability-plan" target="_blank">the company's policies</a> around sustainability and human rights.
<figure role="group"><img alt="cacao farmer indonesia" data-entity-type="file" data-entity-uuid="20dfe92e-0f17-4c15-a9d3-06895c65bc4b" src="/sites/default/files/inline-images/cacao%20farmer%20in%20indonesia.jpg" width="1024" height="768" loading="lazy" /><figcaption>A farmer photographed with unprocessed cacao on the island of Sulawesi, Indonesia, in 2005.</figcaption></figure>The consumer goods giant is already seeing financial results. It was able to grow its sourcing from Sulawesi even as overall cacao production in the region fell, due to the ability to pay a higher price and the relationships built with growers. 

Meanwhile, in West Africa, Divine Chocolate is taking things a step further, not only sourcing directly from farmers in Ghana via Fairtrade, but also giving them ownership. The Kuapa Kokoo farmers union are not just suppliers, but also co-owners of Divine Chocolate. That means they benefit from every bar sold in grocery stores around the world. 

“Divine Chocolate believes in farmer ownership,” Pearley says. “It has enabled the folks that are most affected negatively in the supply chain to make good decisions for themselves that have long-lasting benefits.”

There is a strong need for more brands to look to innovative models like these and learn from how they engage with farmers, says Ernstoff of Quantis.

“One thing that is helpful is when companies see their peers moving,” Ernstoff says. “Really the goal is to reach that middle 60 percent of companies, bring the evidence [to] show them they need to make changes, and convince them that this is extremely important.”

For Pearley, Divine Chocolate’s success shows there is a way to source cacao sustainably and ethically, but it will require companies to think differently. If they don’t, they’ll pay the price later.

“Cutting corners will always put you at risk of participating in reckless behavior,” Pearley says. “Companies that have more focus on the bottom line will always be at risk for committing unintentional, unthinkable acts.”

Image credits: <a href="https://unsplash.com/photos/evRB-x0TJkM" target="_blank">Michele Blackwell</a>/Unsplash and <a href="https://flickr.com/photos/hartanto/307322887/in/photolist" target="_blank">hartanto</a>/Flickr

The Chocolate Industry Has A Lot of Problems. Could Direct Sourcing Help Brands Solve Them? 

The artificial intelligence boom is in full swing, as generative AI tools like Jasper and ChatGPT take over our workplaces and AI-based chatbots play feature in everything from the way we shop to the way we learn. Globally, <a href="https://www.ibm.com/downloads/cas/GVAGA3JP" target="_blank">77 percent of businesses</a> are using or exploring AI, but smaller companies with fewer resources tend to be slower to adopt. The technology giant Salesforce is looking to extend the potential of AI to another group at risk of falling behind. 

Nonprofit organizations provide a vital lifeline to underserved people and communities worldwide, but many are understaffed, strapped for budget and could use some help of their own. AI technologies have the potential to automate mundane tasks and support dynamic new tools for the people and communities nonprofits serve. But nonprofit leaders aren't exactly known as technology trailblazers, and lack of resources when it comes to tech means that many miss out on the opportunities emerging technologies can afford.

"When we think about digital transformation and the AI revolution that we're in right now, how the world is undergoing this incredible shift, we want to make sure the organizations that are serving our communities — those on the front lines, working day in and day out — really have the tools they need to do that work," said Naomi Morenzoni, SVP of philanthropy for Salesforce.

Indeed around 74 percent of nonprofits consider digital transformation a “need-to-have” or “must-have,” according to <a href="https://www.salesforce.org/wp-content/uploads/2022/12/salesforce-nonprofit-trends-report-5th-edition-120822.pdf" target="_blank">2022 Salesforce research</a>, but many struggle to move beyond the row of dusty desktop computers donated in decades past.

<a href="https://www.salesforce.com/news/stories/ai-grants-for-nonprofits-2023/" target="_blank">Salesforce's newest accelerator</a>, AI for Impact, is looking to change that by providing funds, technology and coaching to help nonprofits unlock the potential of AI to further their missions. 

"I think of AI, and generative AI in particular, as augmenting the superpowers of nonprofit staff and leaders. It helps them do what they do best in a more efficient or effective way," Morenzoni said. "The AI for Impact Accelerator brings together unrestricted funding, donated technology, as well as one-on-one coaching from Salesforce experts and staff to help them as they're shaping and developing those strategies." 

<h2>From skills-matching to teacher simulations: Inside the AI for Impact Accelerator </h2>

The first round of the AI for Impact Accelerator will distribute $2 million in funding to help six nonprofits develop new solutions using AI.

The organizations vary in their size and approach, but all focus on education and workforce development. The U.S. organization <a href="https://perscholas.org/about-per-scholas/" target="_blank">Per Scholas</a>, for example, connects people with the skills and resources they need to switch careers into technology. That takes the form of free technical training, as well as coaching and consultation. It's highly impactful work — with more than 20,000 graduates moving on to successful tech careers — but it often relies on individualized services that can be difficult to scale. 

"These are often individuals who've maybe been a cashier at Walmart or a floor manager at Chipotle. They have a lot of skills and experience managing a high volume of customers, doing operations or dealing with complex situations, but it's hard to translate those skills directly to a traditional tech resume," Morenzoni explained. 

Per Scholas' career coaches work with learners one-on-one to build resumes and cover letters that clearly connect their skills to what's needed by technology employers. "But that's really time and labor intensive," Morenzoni said. 

Through AI for Impact, Per Scholas is looking to automate the first pass of the process with an AI tool that matches each learner's experience with in-demand skills, allowing career coaches to spend more time on the nuanced conversations that can really set learners up for success. 

The nonprofit is definitely onto something: Surveys suggest <a href="https://www.resumebuilder.com/3-in-4-job-seekers-who-used-chatgpt-to-write-their-resume-got-an-interview/" target="_blank">nearly half of all jobseekers</a> now craft their resumes and cover letters with the help of generative AI tools like ChatGPT, so it's easy to see how a custom AI solution could make this crucial step of the job search faster and easier for Per Scholas staff and the people they serve.  

<img alt="Salesforce AI for Impact" data-entity-type="file" data-entity-uuid="502ecfd5-63aa-442c-91ff-29b1995b0d60" src="/sites/default/files/inline-images/Salesforce%20AI%20for%20Impact.JPG" width="1500" height="1000" loading="lazy" />

Meanwhile, in the U.K., the nonprofit <a href="https://tdtrust.org" target="_blank">Teacher Development Trust</a> is looking to mirror the success of another industry to help educators do their jobs better. "Flight simulation has transformed the way that pilots fly," Morenzoni explained, and the nonprofit hopes to do the same with teacher simulations.

As a former teacher, Morenzoni knows all about the difficulties that come with managing a classroom and the doubt that can creep in after facing difficult situations. "Being in the classroom can be a really lonely experience, and classroom management is really, really hard," she said. "I used to leave a situation and and think, 'Oh gosh, how could I have handled that differently?' Maybe I'd talk to my department chair, and they would give me some coaching." 

The Teacher Development Trust aims to automate this process for the 4,000 educators it serves annually across the U.K. "Their idea is creating an on-demand, chat-based simulation for teachers where they can put in their exact environment, what happened in the classroom, what their mix of students are, and get fed back a real-time simulation — based on the pedagogy we know is trusted from the Teacher Development Trust — to help guide those teachers in the process of responding," Morenzoni said. "Again, it's taking that superpower of one-on-one coaching and making it scalable and making it faster so those teachers can really get the support they need." 

Likewise, the U.S. organization <a href="https://collegepossible.org/about/" target="_blank">College Possible</a> is developing an AI-driven platform to assist coaches as they work to get students from underserved communities into college, while the global organization <a href="https://www.careervillage.org" target="_blank">CareerVillage.org</a> aims to leverage AI to "put the world’s greatest career coach in the pocket of millions of young people."  

The organizations will be incubated in a six-month cohort, where they'll receive coaching from Salesforce experts about how to build their solutions effectively and <a href="https://blog.salesforceairesearch.com/meet-salesforces-trusted-ai-principles/" target="_blank">ethically</a> in order to maintain user trust. More than 300 Salesforce employees signed up to provide pro-bono coaching to nonprofit partners. Six will ultimately serve as coaches, with their skills closely matched to each nonprofit's needs. 

"One of the things we hear consistently from our nonprofit partners is that the talent gap and being able to access top talent around technology is a real challenge," Morenzoni said. "Being able to connect them with our developers, architects, and data scientists to provide one-on-one coaching and support is invaluable for those organizations." 

Coaches will be available for another six months after the cohort wraps, and the nonprofits will have free access to Salesforce products for two years to support the development of their AI solutions. 

<h2>More work is needed to help nonprofits unlock the power of AI</h2>

While it's too early to tell how an accelerator model like this can work for nonprofits, Salesforce is already seeing promising results from its first nonprofit accelerator launched last year. The four nonprofits incubated in Salesforce's <a href="https://www.salesforce.com/news/stories/salesforce-accelerator-for-nature/" target="_blank">Accelerator for Nature</a> are already starting to implement new solutions using technology — including the nonprofit <a href="https://rfcx.org/our_work" target="_blank">Rainforest Connection</a>'s AI acoustic monitoring tool that can pick up the sounds of illegal deforestation.

Results like these demonstrate the untapped potential of AI for nonprofits, but much more work is needed in order to help them realize it. "During this moment of an AI revolution where everyone is moving as fast as possible, we need to make sure that these organizations are not left behind," Morenzoni said. 

Salesforce pioneered the <a href="https://www.triplepundit.com/story/2017/salesforceorg-corporate-philanthropy-social-enterprise/56126" target="_blank">1-1-1 model of philanthropy</a>, donating 1 percent of corporate equity, 1 percent of product and 1 percent of employee time to community causes since its inception. Thousands of companies have signed up to do the same through the <a href="https://pledge1percent.org/pledged/" target="_blank">1% Pledge</a>, and Salesforce is looking to get more leaders on board. 

"Every company should be stepping up with its technology, its products, its services, and its people to serve our communities," Morenzoni said. "And to do that effectively, they have to start with listening. They have to start with trust, and they have to be led by the organizations who are doing the work day in and day out."

Image credits: terovesalainen/Adobe Stock and Salesforce

AI for Impact: Skilling Up Nonprofit Leaders for the Latest Generative Technology

Some U.S. businesses are trying to cool off the heated partisan pushback against the corporate ESG (environmental, social and governance) movement by <a href="https://www.triplepundit.com/story/2023/americans-think-esg/783186" target="_blank">avoiding specific references to the term</a>. However, in some cases, this lack of communication masks a strong commitment to decarbonization and other ESG principles. The U.S. construction industry provides a good example, as bottom-line interests continue to support the ESG movement, regardless of what words are used. 

<h2>Stepping up the pace on carbon reporting</h2>

Over the past two years, the anti-ESG movement <a href="https://www.triplepundit.com/story/2022/anti-esg-office-holders/761261" target="_blank">has gone far beyond partisan rhetoric</a> to include a rising tide of <a href="https://www.triplepundit.com/story/2023/municipal-green-bonds-esg/764771" target="_blank">state-level laws</a> and multi-state, coordinated <a href="https://www.triplepundit.com/story/2022/texas-blackrock-fossil-energy/754656" target="_blank">legal attacks</a> designed to protect fossil energy interests and inhibit renewable energy investment.

Even as this unfolded, the leading trade organization of the U.S. construction industry, the Associated General Contractors of America (AGC), launched a new <a href="https://www.agc.org/news/2023/05/31/new-agc-task-force-tackle-carbon-reporting-and-reduction-tips-construction-industry" target="_blank">Task Force on Decarbonization and Carbon Reporting</a> this spring. The move is particularly significant on two counts. 

First, by using decarbonization in the task force’s name, the trade group shows it is not just possible but easy to confront the anti-ESG movement on a fundamental pillar of the ESG movement, without using those specific words.

Second, AGC emphasized that the Decarbonization Task Force is the first initiative to be raised under its purview that is focused on hands-on action steps rather than simply issuing reports. That approach raises the profile of the task force to the level of a noteworthy action needed to address an issue of great significance to the industry.

The task force was assigned to engage with AGC’s 27,000 members and 10,500 associated firms on carbon reporting and goal-setting, with the aim of developing an "industry playbook" on carbon reporting this year.

<h2>Putting an end to the “climate hoax”</h2>

<a href="https://www.agc.org/news/2021/08/03/construction-association-launches-new-initiative-address-climate-change-pushing" target="_blank">In an August update</a>, AGC went a step further — advocating for the construction industry to work with project developers to reduce carbon emissions before and after construction.

That end-to-end approach is an important step, because construction activity by itself accounts for under 2 percent of U.S. greenhouse gas emissions, according to AGC. The built environment accounts for far more emissions, at roughly 33 percent in the U.S. Some estimates range up to 40 percent overall.

AGC is also a good example of a trade organization that has dispensed with climate skepticism once and for all. The organization leaves no room for hedging or accommodating “both sides” of the climate crisis.

The new Decarbonization Task Force builds on the work of AGC’s previously formed Climate Change Task — which <a href="https://www.agc.org/news/2021/08/03/construction-association-launches-new-initiative-address-climate-change-pushing" target="_blank">issued a report in 2021</a> focused on how the Joe Biden administration's climate policies will impact the construction industry. The report raised significant concerns for industry stakeholders, but its overall emphasis was on the potential for new growth opportunities across the construction industry as a result of new Biden administration climate policies.

As for climate skepticism, AGC maintains a <a href="https://www.agc.org/climate-change" target="_blank">climate change page</a> on its website, in which CEO Stephen E. Sandherr makes it clear that businesses have no obligation to debate climate science.

“The construction industry is the delivery vehicle for building a greener, more climate friendly future,” Sandherr wrote firmly.  “Finding a way to ensure that what our members build is more efficient will have a significant impact on climate change."

<h2>Uniting for net-zero</h2>

To cast the arguments against climate action even further into irrelevancy, the new Decarbonization Task Force has positioned itself as part of a global effort.

The task force was co-created by the U.S. branch of the leading global construction firm Skanska. As a climate-forward firm headquartered in Sweden, Skanska brings its considerable experience on carbon reporting to the U.S. effort. Among other initiatives, in 2019 Skanska joined with the Carbon Leadership Forum to help create the Embodied Carbon in Construction Calculator.

The task force “unites some of the biggest construction companies to support the industry’s decarbonization efforts,” said the group’s chair, Myrrh Caplan, who is national vice president of sustainability at Skanska U.S.

<h2>Where are the workers?</h2>

The anti-ESG movement is primarily focused on <a href="https://www.triplepundit.com/story/2023/anti-woke-legislation/764301" target="_blank">protecting fossil energy stakeholders</a>, but it has also manifested in other elements of commerce including <a href="https://www.triplepundit.com/story/2020/diversity-training-red-scare/706151" target="_blank">diversity training</a> and other corporate <a href="https://www.triplepundit.com/story/2022/dei-bystander-effect-court-stacking/744056" target="_blank">DEI (diversity, equity and inclusion) initiatives</a>.

The pushback has worked to some extent, but it may hit a brick wall in the construction industry.

A growing <a href="https://www.triplepundit.com/story/2023/skilled-trades-high-demand/781046" target="_blank">shortage of skilled workers</a> should help motivate the industry to make a greater effort to recruit outside of its traditional white, male workforce. As additional motivation, President Biden’s climate bills also include environmental justice provisions, as well as stipulations for hiring women and other groups underrepresented in the construction industry.

If AGC really is serious about positioning the U.S. construction industry to take full advantage of new climate policies during the Biden administration, then its <a href="https://www.agc.org/diversity" target="_blank">diversity and inclusion initiatives</a> will be part and parcel of the effort, no matter what they call it. 

Image credit: bannafarsai/Adobe Stock

U.S. Construction Industry Steps Up the Pace on ESG, Without Saying 'ESG'

The term ESG is fine, according to a recent poll of 1,000 Americans. Despite continued polarization related to the acronym, which stands for environmental, social and governance, the majority of Americans believe it’s the best way to describe a company’s approach to improve business, society and the environment. Before we get to the data, though, it’s important to understand why we asked this question in the first place.

<h2>How did we get here?</h2>

Over the past year, a rising chorus of conservative U.S. voices have claimed that ESG is “<a href="https://www.triplepundit.com/story/2023/anti-woke-not-working/769921" target="_blank">woke capitalism</a>,” or corporate virtue signaling about social and environmental concerns which they see as beyond the bounds of business.

The issue drew President Joe Biden’s <a href="https://www.reuters.com/business/sustainable-business/biden-vetoes-resolution-block-labor-dept-rule-esg-investing-2023-03-20/" target="_blank">first presidential veto</a> in March of this year, defending legislation related to ESG investing and bringing the issue into the national spotlight. ESG is facing such a significant backlash that BlackRock CEO Larry Fink, long one of the financial industry’s staunchest proponents for purpose and ESG, <a href="https://time.com/6291317/larry-fink-esg-climate-action/" target="_blank">doesn’t even want to use the term</a> — though BlackRock's policies around society, the environment, and business governance remain unchanged.

It’s also important to establish that whatever you call them, sound ESG practices <a href="https://www.triplepundit.com/story/2023/busting-myths-esg/781471" target="_blank">are not new</a>, and are indeed vital to operating a responsible, ethical, and profitable business. As Fortune sustainability reporter Eamon Barrett <a href="https://fortune.com/2023/03/09/why-s-is-often-the-overshadowed-sibling-to-e-and-g/?tpcc=nlceodaily" target="_blank">observed</a>, “major corporations documenting their environmental, social, and governance policies for investor scrutiny is actually a decades-old process.” At its core, ESG is a means to broaden the lens on what constitutes key drivers of business value, accompanied by efforts to measure and report on what matters for individual company operations via standardized reporting frameworks. 

<h2>Americans say ESG is a-okay</h2>

We partnered with <a href="https://www.carolconeonpurpose.com/social-impact-creative-agency" target="_blank">Purpose Collaborative</a> member <a href="https://www.reputationleaders.com/" target="_blank">Reputation Leaders</a>, a global research and thought leadership consultancy, to ask Americans what term they feel best describes “the approach companies take to improve business, society and the environment.” 
ESG and sustainability are tied for the top, at 23 percent each. Corporate social responsibility is second, at 21 percent, followed by purpose (11 percent), corporate citizenship (8 percent), stakeholder capitalism (7 percent) and stewardship (5 percent).

<img alt="ESG research statistics — public opinion" data-entity-type="file" data-entity-uuid="290614ff-6865-4175-b626-66cfe363891b" src="/sites/default/files/inline-images/ESG%20Research%20Stats.png" width="2640" height="1485" loading="lazy" />

Across demographic groups, ESG and sustainability are the favored terms among men, while women prefer “corporate social responsibility,” a phrase that connotes a sense of obligation. ESG is also the top choice for younger audiences, particularly those aged 25 to 34, while consumers aged 55 to 64, prefer the term “sustainability.” There are regional differences, as well. People living in the Northeast prefer sustainability, while their Southern and Midwestern counterparts prefer ESG.

Reputation Leaders also analyzed the tone of media coverage related to Americans’ top three terms: ESG, CSR and sustainability. CSR garnered the largest share of positive sentiment at 37 percent, with sustainability in second place at 32 percent and ESG trailing at 20 percent. ESG was the only term to have a significant amount (10 percent) of negative sentiment.

<h2>What now?</h2>

This study can help support companies in exploring the terms they will use to discuss the impact their business has on society. It is important to develop a clear, shared perspective and take a long-term view.

From <a href="https://www.ft.com/content/7ab0bfb0-b37c-463d-b132-0944b6fe8e8b" target="_blank">the United Nations to the World Economic Forum</a>, global leaders are advocating for businesses to embed a <a href="https://netpositive.world/book/" target="_blank">net-positive approach</a> into their operating models to accelerate innovation and impact. Increasingly, employees, customers, supply chain partners, and others are asking about the ESG commitments of the companies they work for or with. Business leaders need to have answers and a strong point of view on which issues are most important to their business, and why. Our best advice? Don’t worry about what you call it — stick to your organization’s long-term, strategic commitments to stakeholders, society and the environment.

When it comes to communications, here are three ways to help depolarize the conversation:

<ul><li>Be clear about the goals of ESG. ESG is not about imposing a set of values on business. It provides a framework for companies to assess and optimize their value and impact. </li>
	<li>Increase transparency around ESG data and metrics. This will help to ensure that investors and other stakeholders are making informed decisions.</li>
	<li>Embrace standardized reporting frameworks. This will make it <a href="https://www.ibm.com/topics/esg-frameworks#:~:text=ESG%2520reporting%2520frameworks%2520are%2520used,ESG)%2520aspects%2520of%2520the%2520business." target="_blank">easier to compare</a> companies' ESG performance — think: the Task Force on Climate-Related Financial Disclosures (TCFD), the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB).</li>
</ul>Yes, the polarization will continue, especially as the 2024 presidential election nears. As the world continues to endure climate impacts from extreme heat and flooding to record-breaking wildfires, there also will be greater demand for businesses to address environmental challenges.

Scores of studies suggest that ESG — done right — drives sustainable competitive advantage and can accelerate organizational growth over the long-term. An impressive <a href="https://www.morganstanley.com/ideas/sustainable-investing-sentiment-covid-19?tpcc=nlceodaily" target="_blank">80 percent of investors</a> believe that companies with strong ESG practices can generate higher returns and make for better long-term investments, according to research from Morgan Stanley. 
  
By continuing to show a link between ESG issues and the business, we can help to make the debate around ESG more constructive and less polarizing. This will ultimately benefit businesses, investors and society as a whole. Reputation Leaders is a global thought leadership consultancy. Our people are passionate about business as a force for good, believing that profit and purpose can co-exist by aligning brand purpose with responsibility towards the environment, society and corporate citizenship. <a href="https://www.reputationleaders.com" target="_blank">Reputation Leaders Ltd</a> managed the study which ran with 1,000 nationally representative respondents in the U.S. in July 2023.

The Purpose Collaborative is a global group of 45+ firms and subject matter experts in 20+ countries with 500+ professionals, all developing breakthrough work to help organizations accelerate their purpose, ESG, and sustainability commitments. Member capabilities include research and data analytics, employee engagement, sustainability strategy and reporting, digital marketing, creative programming and storytelling, and video production. Learn more <a href="https://www.carolconeonpurpose.com/social-impact-creative-agency" target="_blank">here</a>. 

Image credit: blacksalmon/Adobe Stock

We Asked Americans What They Think About the Term “ESG.” Their Answers Were Eye-Opening

Women entrepreneurs play a key role in climate resiliency and adaptation, says Lizz Welch, CEO of International Development Enterprises (iDE). “Women in leadership … are much more communal in our approaches and recognize the benefits that can accrue based on really taking into account climate change,” she told TriplePundit.

The global economy could increase by a net $5 trillion to $6 trillion by empowering women at the same rate as men, according to a recent <a href="https://we-fi.org/wp-content/uploads/2022/06/We-Fi-Case-for-Investment.pdf" target="_blank">study</a> from the Women Entrepreneurs Financial Initiative. Likewise, it stands to reason that the response to the climate crisis could look different under equitable leadership. Yet women continue to face significant barriers to entrepreneurship.

Welch and iDE are working to support and empower women entrepreneurs in the developing world. It is from this capacity that women have a stronger connection to the environment — and they’re quicker to adapt to changes in that environment, Welch said.

“In the smallholder context, iDE does a lot of work in African agriculture, for example," she said. "The role of women, often both in the family and in the community, is that they're in charge of the cooking, in charge of energy for the household, often in charge the labor that needs to go into the farm. So, women are very aware of the patterns and changes in the climate and rainfall and are quicker adopters of improved seeds and technology.”

These women consistently reinvest about 90 percent of their profits back into their households and communities — whereas the men only reinvest about 30 to 40 percent, Welch said. Female agricultural entrepreneurs in Africa also produce 70 percent of the food, though they only own 15 percent of the land.
<figure role="group"><img alt="Lizz Welch, CEO of iDE, visits women entrepreneurs in Zambia. " data-entity-type="file" data-entity-uuid="beb313d6-3fd7-4377-bab6-efb548a0d4f9" src="/sites/default/files/inline-images/20230403_ZAM_Elizabeth%20Welch%20CEO%20Visit_Photo%20by%20Pezo%20Siabasimbi_7140_0.JPG" width="1500" height="945" loading="lazy" /><figcaption>Lizz Welch, CEO of iDE, visits entrepreneurs in Zambia. Image credit: Pezo Siabasimbi</figcaption></figure>The recognition of changing patterns and willingness to adapt that women entrepreneurs demonstrate has the potential to spill over to climate action when they are in positions of power that allow them to affect larger change. <a href="https://www.jstor.org/stable/30044614?seq=1#page_scan_tab_contents" target="_blank">Researchers have known</a> for some time that governments with a larger percentage of women in their national assemblies were more likely to agree to climate treaties.

This is, at least in part, due to women having <a href="https://climatecommunication.yale.edu/publications/gender-differences-in-public-understanding-of-climate-change/" target="_blank">a better understanding of the risk</a> the climate crisis poses to themselves, wider society and the environment. And their personal risk <a href="https://www.bbc.com/news/science-environment-43294221" target="_blank">is greater</a>. Of those displaced by climate change and its ensuing disasters, 80 percent are female, according to <a href="https://news.un.org/en/story/2021/11/1105322" target="_blank">the United Nations</a>.

Women’s potential to take a stronger stand on climate action is layered, Welch said. “Starting at the very smallest unit of change. It’s at the household level, then it’s communities and districts, [then] national and international,” she said. “Women bring much more of that community fabric into what they're working on, so when you add that up, you're seeing changes at each one of those levels. It becomes a bit of a snowball effect.”

While gender parity is a long way off, it isn’t a magic fix for the climate crisis either. “I still think there's a chunk of the global population that hasn't fully recognized the depths of impacts that climate change is having on everyday life,” Welch said. “I think that's still a limitation that we have to overcome as a global community.”

Still, women are demonstrating their resilience in real time. “The big distinguisher here is really that [women’s] community level focus is not only on improving things within their household but really within the community and within the country,” she said. “Women are very, very quick to identify barriers to growth and progress, and then to invest their time and energy in solving those issues.”

Empowering Women Entrepreneurs Could Boost Climate Action 

The accumulation of microplastics in the environment has drastically increased since 2006, resulting in over 170 trillion microplastic particles in the world’s oceans, researchers estimated in a <a href="https://journals.plos.org/plosone/article/authors?id=10.1371/journal.pone.0281596" target="_blank">recent study</a>. The authors highlight years of increased plastic production and waste generation as potential culprits. Plastic can be found in almost everything, including fabrics like polyester and nylon. And laundering clothes that are made with those fabrics is a primary source of the microplastic pollution that makes its way into waterways and, eventually, the ocean.  

<a href="https://www.unep.org/news-and-stories/story/fashions-tiny-hidden-secret" target="_blank">Roughly 60 percent</a> of all textiles are made from plastic fibers, which can release up to 700,000 microplastic fibers each laundry cycle that do not break down naturally, according to <a href="https://www.gulp.online/" target="_blank">Gulp</a>, a company offering a potential solution to this problem.

Gulp’s washing machine filter is the first sustainable, long-lasting, microfiber filter of its kind. And it catches up to 90 percent of the microfibers from each load of laundry. 

“Gulp is about creating a long-term solution for one of the biggest challenges of our time. Gulp is a sustainable, scalable piece of technology that empowers people to become part of the solution and make a real difference,” Adam Root, the founder and CEO of Gulp’s parent company, <a href="https://matter.industries" target="_blank">Matter</a>, said in a statement. “It’s easy to install and use, and it’s designed to fit washing machines across Europe in millions of homes."

Consumers don’t need a plumber to install the self-cleaning filter. It connects to washing machines with simple push-fit connections compatible with the standard hoses in the U.K. and EU. An LED light signals when the filter is full, and consumers have the option of sending the filtered microfibers back to Matter for analysis or disposing of them in their trash. The majority of landfill sites in the U.K. and Europe are sealed due to the regulatory requirements, so the filtered microfibers likely will not end up leeching into nearby waterways. 
<figure role="group"><img alt="The Matter team stands next to a washing machine. " data-entity-type="file" data-entity-uuid="ee27b184-118f-453d-83eb-31a94280b26d" src="/sites/default/files/inline-images/Matter%20team%20group%20shot.jpg" width="1500" height="1000" loading="lazy" /><figcaption>The Matter team. </figcaption></figure>Matter <a href="https://matter.industries/news/matter-accelerates-growth-with-10-million-series-a-funding" target="_blank">recently raised</a> $10 million of Series A funding that enables the company to scale its microplastic filtration technology and accelerate its solutions for commercial and industrial applications. The funding is “rocket fuel across the entire business,” Root told us. 

“We are looking at how we can scale the laundry side of the business, but also we’re moving to the industrial space, such as wastewater treatment plants, textiles, factories, really developing it at scale,” Root said. While Matter is moving forward with scaling its industrial technology, the Gulp filter is probably the product closest to being ready for broad commercial application. 

A major driver of Matter’s effort to scale is the legislative environment, Root said. France set the benchmark as the first country to <a href="https://www.europarl.europa.eu/doceo/document/E-9-2020-001371_EN.html" target="_blank">take legislative steps</a> in the fight against plastic microfiber pollution with mandatory microfiber filters on washing machines to be introduced by 2025. 

In the United States, a <a href="https://matter.industries/news/matter-accelerates-growth-with-10-million-series-a-funding" target="_blank">microfiber filtration bill</a> was also introduced in California, the world’s largest sub-national economy. Starting in 2029, all new washing machines sold in the state must contain a microfiber filtration system with a mesh size of 100 micrometers or less. The bill passed its first committee hearing in March 2023.   

“The legislation moving into place is moving the big players. There are around eight manufacturers to represent about 80 percent of the West’s market for [washing machines],” Root said. “Matter’s position is to be a brand behind a brand, so we are really looking at us working into other people’s supply chains and then scaling it through to get into the mass market. I think legislation will be a big driver toward that, and that will then enable the biggest players to be moving in that space.”

The Gulp filter is only available in the U.K. and EU, but the company is working to introduce the technology in the United States in roughly a year and a half, Root said.

In the meantime, educating consumers about the problems posed by plastic microfiber pollution — and that current options for dealing with the problem may do more harm than good — is really important, Root said.

“We’ve seen disposable filtration systems coming onto the market, but you are throwing away more plastic than you are capturing, so that’s not going to work at scale,” he said.

In addition, there needs to be greater awareness of the impact of microfiber pollution on microorganisms, such as the plankton that live in bodies of water, consume carbon dioxide for food, and release oxygen back into the environment, Root said. 

“These guys represent the largest sequestration of carbon on our planet and also produce the majority of the world’s oxygen,” he said. “People think of washing machines and oceans being so disconnected, but unfortunately they’ve never been so connected in our time.”

Images courtesy of Matter

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Editorial Team

We report the business case for sustainability.

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