Leading companies recognize climate change as both a risk and an opportunity. A growing number are taking steps to strengthen their resilience to climate impacts, reduce their greenhouse gas emissions, produce innovative low-carbon technologies, and support policies enabling a smooth transition to a low-carbon economy.
Extreme weather disasters like intense storms, floods and droughts are becoming more frequent, imposing real costs on companies and the communities they help support. Climate change threatens facilities and operations, supply and distribution chains, and access to electricity and water. It can also prevent employees from coming to work and customers from buying products or services.
C2ES research shows that nearly all companies in the Standard & Poor’s Global 100 Index have identified physical risks that climate change poses to their businesses. Many of these companies regularly plan for and report climate risks. Many also see their resilience efforts as opportunities to reduce costs. Conserving energy or water, for example, not only safeguards against interruption in supply, but also saves money.
Companies across the economy are investing in renewable energy, setting and meeting emissions targets, incorporating a price on carbon into their business plans, and greening their supply chains. C2ES found that almost half of the 2016 Fortune 500 companies—and more than 60 percent of the Fortune 100—have set targets to reduce greenhouse gas emissions, improve energy efficiency, and/or increase the use of renewables. More than 80 percent of S&P 500 companies are measuring and managing their greenhouse gas emissions.
More than 500 companies have set greenhouse gas emission reduction targets in line with climate science, and more than 280 companies joined RE100, setting goals to be powered by 100 percent renewable energy. Three-quarters of companies in C2ES’s Business Environmental Leadership Council have set net-zero targets. Companies are also making their products more sustainable and encouraging their employees and customers to live more sustainably.
Addressing climate change as a business strategy also creates opportunities for companies to develop technologies, products, and services that mitigate climate change, and help customers adapt to the physical changes already underway. This creates a competitive business advantage, leads to economic growth, creates jobs, and speeds the transition to a global clean energy economy.
A 2019 analysis by a national association of business leaders, found that:
- Advanced energy is a $238 billion industry in the United States and $1.6 trillion worldwide. Revenue from advanced energy increased 11 percent in 2018, and the industry supports more than 3.5 million jobs across the nation.
- Globally, revenue from products and services that make buildings more energy efficient grew 9 percent in 2018, to a total of $298.5 billion.
According to UCLA’s Luskin Center for Innovation, as of November 2019, one in three Americans resides in a city or state committed to achieving 100% clean electricity. 67% of customer accounts are with utilities that have either carbon or emissions reductions goals. Despite the COVID-19 pandemic, renewable energy growth continued in 2020, accounting for nearly 90 percent of new global power capacity.
A growing number of leading companies are also voicing support for national and global climate policies that help them plan for business growth. Shortly after the 2020 election, 47 major U.S. companies signed on to a statement organized by C2ES urging the Biden Administration and Congress to enact ambitious, durable, and bipartisan climate solutions. Effective climate policies give businesses more certainty for short- and long-term planning and investments and help them better anticipate regulatory risks and economic opportunities. A patchwork of state and regional policies, on the other hand, ends up being costlier for companies to manage.
Companies continue to work with states and cities on climate and emissions initiatives. These efforts also contribute to greater resilience, community upgrades, and stronger emergency planning.
Stronger Business Efforts
Investors and other stakeholders are also motivating companies to climate action. Shareholders have passed resolutions calling on companies to measure and report their carbon footprints and to demonstrate that climate-related risks and opportunities are identified, assessed, and adequately managed. A growing number of mutual funds, which manage many Americans’ retirement investments, are voting in favor of climate change-related shareholder resolutions.
An industry-led task force in July 2017 recommended ways companies across multiple sectors can inform their lenders, investors, insurance underwriters, and other stakeholders about climate risks—and opportunities—for their businesses. More than 1,500 organizations, which represent a $12.6 trillion market capitalization and $150 trillion in assets, support these recommendations. State financial regulators as well as those in countries around the world are also encouraging companies to report climate change risks in their financial filings.
For examples of business climate action, see efforts from members from our Business Environmental Leadership Council.