Companies as Gamechangers for Global Environmental Protection
When it comes to reaching global climate protection goals as defined, for example, by the Paris Climate Agreement, corporate climate action is increasingly coming under scrutiny. Because of the greenhouse gas emissions associated with the extraction of resources, production of goods and services, and energy consumption, companies are major contributors to global warming. At the same time, companies drive innovation and develop technologies that are urgently needed for a low-carbon economy, e.g., for providing large amounts of green electricity, electrifying mobility, and producing green steel or cement.
Aside from their systemic contributions, companies are also expected to define their own climate strategy for reaching net zero emissions by mid-century at the latest – that is the new guiding star of climate ambition. In practice, this means reducing corporate emissions as much as possible and neutralizing any residual emissions through carbon removal technologies. In this context, the corporate sphere of responsibility has strongly expanded in recent years, from the company’s operations to its entire value chain.
To combat climate change, it is important to move towards a circular economy, which is the opposite of our current “take, make, waste” economy. This linear way of doing business and organizing society is not only very inefficient but also contributes to other major problems like pollution and the loss of biodiversity in addition to exacerbating climate change. Studies have shown that 45 percent of global greenhouse gas emissions stem from the production of materials, products, and food. The circular economy, which focuses on long lifecycles for resources and on closing material and energy cycles, can help address several ecological crises at the same time. The concept not only takes into account that resources are finite, but also opens up a variety of opportunities for companies, e.g., by leveraging product-as-a-service (PaaS) business models.
Another up-and-coming topic area that is closely related to climate and circular economy is biodiversity. After the global community has adopted the Global Biodiversity Framework (GBF) at the biodiversity conference in Kunming and Montreal at the end of 2022, it is now up to both states and corporates to contribute to nature protection. Companies are asked to analyze, assess and report on their dependencies, impacts, risks and opportunities related to nature loss – not just by regulation, but increasingly also by investors and civil society. At the moment, we are witnessing the formation of an ecosystem of initiatives, standards, providers and tools such as the Taskforce on Nature-Related Financial Disclosure (TNFD) or the Science-Based Targets Network (SBTN).
At econsense, we support our members in their net zero transformation, putting a focus on developing strategies and suitable governance instruments in line with stakeholder expectations. We keep our members informed about new scientific findings and regulatory developments and facilitate exchanges with relevant actors.