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Time for boards to stop greenwashing, get serious about net-zero carbon

Tuesday, July 27, 2021 @ 8:53 AM | By Helle Bank Jorgensen


Helle Bank Jorgensen %>
Helle Bank Jorgensen
Companies and countries all over the world are committing to net-zero goals and pledges to diversity, equity and inclusion, human rights — the list goes on. In fact, we are in the middle of the biggest commitment to a green future in history.

Fewer have set science-based targets, as those targets come with a bit more scrutiny. The website Sciencebasedtargets.org reports: “Over a thousand companies worldwide are leading the zero-carbon transition by setting emissions reduction targets grounded in climate science through the Science Based Targets initiative (SBTi). Hundreds of them have raised their ambition by committing to Business Ambition for 1.5°C.”

We need to add a lot of zeros to the “over a thousand companies” in order to get to a net-zero carbon economy.

Many boardrooms around the world are presented with net-zero goals. Many are asked to nod to those goals. Some are given information about what goals the competitors are setting, and what the talent, customers and investors are expecting and demanding from the board. Some boards approve, some feel comfortable doing so and are hoping for the best; others are afraid to be called out on greenwashing but approve them anyway, because “everyone else” is setting goals.

I’m all for commitments, goals and especially science-based targets. Unfortunately, goals, targets and commitments are worthless without accountability and enforcement — and that goes for countries as well as companies.

Eleven years ago, in 2010, at the United Nations Framework Convention on Climate Change’s COP15, developed countries committed to a goal of mobilizing $100 billion per year by 2020, to address the needs of developing countries.

A long list of developed countries pledged but, according to the OECD 2020, not all have delivered.

Now, we are looking forward to COP26 in Glasgow and the stakes are high. The impact of a changing climate is being seen and felt all over the globe — and people and companies are starting to realize that after COVID-19 there is no more “normal.”

Supply chains are, and will likely be, more disrupted “than normal.” We will have water shortages that will affect companies’ ability to produce as they were used to doing. We will have climate refugees disrupting global stability. We will have major transitions that will cause anxiety, from those retiring, to those entering the job market, to parents wondering what world they are leaving to their children.

And we haven’t even put the COVID-19 pandemic to bed in many developing countries that desperately need a just transition. No wonder that the World Health Organization has declared mental health issues a pandemic alongside COVID-19.

Sunset, not sell

Boards of directors are needed more than ever to ask for and question the scenario analyses behind how climate change will affect their company’s assets and determine whether they are or will become stranded. We need to have boards ask how climate change will affect employees, suppliers, customers and the future supply and demand of their goods and services.

We need boards to ask if it is time to sunset, not sell, activities that are not part of a net-zero future — and we need boards to look to the horizon, into the sunrise, for the activities that will become the businesses of the future.

Now is the time to innovate, but also focus on how to transform existing business activities to a net-zero future.

That does not happen by itself. It does not happen by wishing that things were brighter or by producing fancy reports about commitments without allocating budgets and resources to walk the talk. It does not happen by talking about the small percentage of new business activities while continuing to spend most funds on existing old-economy activities. And it does not happen by selling those activities that are not part of the future net-zero economy to companies or organizations that do not have the same values or reputational risk at stake.

Climate change is not about who can make the biggest promises, but about who can deliver net-zero solutions and report on them in a transparent and accountable manner.

It is about saving the life on this planet we call our home.

Let’s stop greenwashing and green-wishing, let’s start green-walking — or rather, running “as if your life depends on it.” Because it does.

Helle Bank Jorgensen, hbj@competentboards.com, is the CEO of ESG Competent Boards Inc., which offers the global online Competent Boards Certificate and Designation Program, that train leaders to identify and proactively act upon material ESG, climate and sustainability risks and opportunities. She is an experienced board facilitator, board member and serves on His Royal Highness Prince of Wales A4S Global Expert Panel and World Economic Forum (WEF) Expert Network for Corporate Governance, Leadership and Emerging Multinationals. She is a business lawyer and state-authorized public accountant by training.

Photo credit / Kolonko ISTOCKPHOTO.COM

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