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Climate Week Insights: Highlights from Sustainability Discussions
Participating in events during Climate Week can trigger a mix of emotions: excitement, inspiration, and even anxiety. However, one thing that Climate Week offers with certainty is a platform for global business leaders and professionals to unite in the pursuit of sustainability. Over the span of 5 days, 400 sessions were hosted around the city. Our attendance at events hosted by corporations, universities, and international organizations afforded us a firsthand view of some of the discussions that unfolded. This article shares a thread of common topics that took center stage at the conference and remained consistent throughout conversations within the community: generative AI, technology and data, finance, transparency, governance, and collaboration.
1. Generative AI is Driving Climate Action and Bridging the Sustainability Data Gap
At the heart of the discussions on data and technology was the power of generative AI to analyze data needed for climate action and compliance. As technology evolves, so do solutions developed by startups and big tech. In the past few months, we’ve all experienced how ChatGPT is making information accessible in ways that weren’t possible before. Similarly, generative AI for climate change will be revolutionary in increasing access to emissions data.
We saw climate solutions for corporations and cities powered by Google Cloud’s AI, including Environment APIs on Google Maps Platform and a new “Flood Hub” platform that provides flood forecasting capabilities to 80 countries. Another such example was IKEA’s partnership with Winnow; together, they utilized an AI solution that allowed kitchen staff to pinpoint patterns of waste and make informed decisions to minimize food waste. Through this strategic partnership, IKEA was able to cut food waste in its stores by 54% and was the first major corporation to meet the Sustainable Development Goal of halving food loss and waste by 2030.
Having accurate data is crucial for trust and integrity, internal decision-making, and compliance with rapidly emerging climate disclosure regulations. While accessing granular data has been a huge challenge for large organizations with a global supply chain, generative AI is helping to close the sustainability data gap.
2. Finance and ESG Roles are Converging
The evolutionary nature of ESG regulations has increased the need for integrated reporting, with businesses requiring sophisticated carbon accounting systems that mirror the rigor of financial accounting. With carbon now being treated like a currency – priced and taxed – there will be a natural convergence between the roles of Chief Financial Officers and Chief Sustainability Officers.
Businesses will need to manage carbon as a critical asset and apply the principles of finance flows to sustainability accounting practices. SAP is pioneering this effort by introducing the concept of the “green ledger,” which applies ledger-based accounting to carbon, allowing companies to manage their carbon emissions and balance their “carbon books” much like their financial ones.
3. Legislation and Regulation Inform One Another for Decarbonization
Discussions around the role of policy in climate change highlighted the ways in which legislation and regulation complement each other in achieving emission reduction goals. Legislation, such as climate bills and clean energy legislation, establishes a broader vision and framework for decarbonization efforts and provides the authority and funding needed to drive meaningful change and invest in clean technologies and practices. Regulation, often enacted by government agencies like the Environmental Protection Agency (EPA), provides the detailed guidelines and standards necessary to translate broader legislative mandates into concrete actions.
Today, the interplay between regulation and legislation is becoming increasingly evident with the passing of the Inflation Reduction Act (IRA), which provides a historic investment in clean energy and contains a variety of tax incentives, loans, and grants to improve energy efficiency and climate resiliency. Speakers from the EPA outlined the ways in which they will be leaning on the IRA to see what actions are doable when designing a regulatory approach toward emissions reductions in the coming months.
4. Transparency and materiality assessments can help companies build consumer trust and manage communication risk
At a time when sustainability has become a buzzword that companies use day in and day out, it’s easy to wonder – which companies can we really trust? One of the key hurdles organizations are faced with when tackling sustainability is avoiding greenwashing. Despite the lack of regulations that currently exist against greenwashing, companies can face huge reputational risk by putting out false statements or reports about their sustainability metrics.
It was promising to hear business leaders recognize the need for more authentic communication around sustainability. Today, civil society and GenZers have made it clear that they value honesty and transparency from corporations. They would rather hear that a company has reduced emissions by 64% and know it’s real than hear about a 100% reduction in emissions and worry about it being false. Discussions were forward-looking and laid out some actionable steps companies can take to avoid greenwashing, including avoiding vague language, making the science of climate change accessible to customers, ensuring accurate carbon accounting, and being honest about the challenges faced through the sustainability journey.
One big step that businesses can take is conducting materiality assessments to understand which aspects of sustainability are most relevant to their unique business models and target efforts into the areas where they can have the greatest impact. The role of governance was also emphasized, with C-suite level executives playing an important role in not only establishing sustainability goals but also setting the tone for honest, transparent communications that are streamlined across the company.
5. Partnerships are Critical to Achieving Impact at Scale
As we all (should) know by now, sustainability can’t be tackled by one individual or one business alone. Throughout Climate Week, the role of strategic partnerships in driving positive change shone through and many exciting examples of partnerships were shared.
One such example was the Eco-Beauty Score consortium, which consists of 36 cosmetics and personal care companies working together to build an assessment methodology and scoring system for cosmetic products. The consortium aims to address the problem of the environmental impact of cosmetic products by providing increased transparency to consumers through an industry-wide environmental impact assessment and scoring system. The intent is to provide greater transparency on the footprint of cosmetics products and enable consumers to make more sustainable choices.
Discussions across the events illuminated critical themes in corporate sustainability, serving as a catalyst for reflection and action. From the transformative potential of AI to the role of strategic partnerships, these insights can provide a roadmap for businesses committed to addressing climate challenges and advancing a sustainable future. Antonio Guterez, secretary general of the United Nations, said: “The future is not fixed. It is for leaders like you to write it”.
This post was co-authored by WatchWire sustainability analysts Prerana Tirodkar and Annika Prinz.
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