By reducing their emissions, businesses will not only help the environment but also save on costs. In other words, decarbonizing your supply chain is good for efficiency savings. New tools are available to help businesses do this ahead of likely new SEC regulations (Photo Gilles Mingasson/Getty Images)GETTY IMAGES
Last week, the UN Secretary-General, in his now typical fiery rhetoric, declared the “era of global boiling has arrived.” Some pundits immediately criticized it, dismissing it as another example of “climate fanaticism,” despite ongoing wildfires and extreme heat temperatures ravaging several parts of the world. Amidst the back and forth over the extent of the threat posed by climate change, it is easy to lose sight of the fact that taking action and showing leadership on climate change also brings opportunities.
There is certainly no shortage of media attention being given to the very real risks extreme heat waves, wildfires and fires pose to not only families and communities but also businesses, including in the US. In Texas, for instance, record-breaking temperatures are leading to increasing numbers of heat-related illnesses, especially among outdoor workers – such as those in the hospitality industry. This prompted a so-called “Extreme Heat Conversation” between President Biden and the Mayor of San Antonio to announce new on-the-job relief for exposed workers, such as guaranteed water breaks. As well as immediate health risks, such extreme weather also leads to higher energy bills for families at a time when they’re already feeling the pinch.
All of this underscores the clear urgency to take action on climate change. And yet, in addition to addressing these threats head-on, providing relief where needed, and developing methods to adapt to increasingly unpredictable weather, society should also not lose sight of the opportunities that can come with taking swift action to rapidly reduce our carbon footprint.
The impact of the Inflation Reduction Act (IRA) is a case in point. In the first 6 months since the IRA’s passage, 100,000 new clean energy jobs were reportedly created – alongside an unprecedented boom in new factories. Globally, the benefits could be even greater: investing in clean energy has the chance to create 24 million additional new jobs worldwide in the next 20 years just by the changes necessary to hold global warming to 2° C. Meanwhile, reducing deforestation and turning the protection of our forests into a revenue-generating source could create 8 million full-time jobs, principally amongst those workers from frontline communities who serve as stewards of our forests.
The challenge, of course, is making sure all governments have access to resources to make these sorts of investments. This is where holding Congress to account to deliver on the US pledge to increase funding to developing countries is critical. Ultimately, funding this transition in all countries will likely bring dividends (in addition, of course, to saving the planet). For instance, it will likely result in purchases from American manufacturers of batteries and electric vehicles.
The benefits to businesses that take action now to reduce the carbon footprint of their entire supply chains are also beginning to be clear. Last month I sat down with the CEO of Sustain.Life, Annalee Bloomfield. The team at Sustain.Life, composed of former Walmart executives, saw firsthand how challenging it was for Walmart’s supply chain to engage with carbon measurement, which inspired them to create a scalable technology solution to help companies that lack in-house climate expertise. Sustain.Life is one of many advisory businesses offering new tools to assist companies in identifying ways to accelerate decarbonization and achieve savings in the process.
In Sustain.Life’s case, they offer a new software initiative to help their clients see the benefits that could be gleaned from cutting their footprint down, particularly those who can’t afford a big consultancy or an in-house sustainability department. This is particularly important as businesses look to reduce the lifecycle emissions of their goods and services across their supply chains, known in climate policy land as “scope 3 emissions,” which often accounts for 80-90% of a company’s entire carbon footprint. In such instances, Sustain.Life supports both clients and their suppliers to identify ways to cut their emissions.
The pressure to tackle such scope 3 emissions is only set to grow as more businesses and large customers – including the US Government – make declarations that they will only source supplies from companies that have set, and deliver on, legitimate emission reduction targets. This will trigger a big domino effect, especially in the case of large customers like Walmart, Amazon, SAP, or Meta who have numerous suppliers. The suppliers, large and small, of such firms will soon be needing to begin their sustainability journey in earnest if they haven’t done so already. This is where tools like those offered by Sustain.Life will be helpful. Fear of losing federal government contracts – the US required climate disclosures from their suppliers since November – has already increased the number of those knocking on Annalee’s door for assistance.
Some practical example of the types of action open to a company, Annalee explained, is increasing the reuse of their products, particularly in relation to those made with plastic. Other actions include those related to “movement and buildings… think about compost, think about changing out LED light bulbs… the kind of thing that shows your employees that you’re walking the talk.” Such avenues are not just good for the environment but “end up saving money in the long run.”
Beyond those initiatives, any business can quickly adopt, Sustain.Life pays particular attention to those that can fundamentally transform the structure of a business. “We recommend decarbonization actions that make the most sense for your business…, [they are] mostly based on those core characteristics of your business,” Annalee explained. This might, for instance, include a switch to onsite renewables or changing an entire travel strategy.
As the impacts of climate change begin to be felt around the world, Sustain.Life is one of a growing number of businesses offering assistance to companies wondering how they will not only achieve their net-zero targets but also convince their management teams of the economic benefits of doing so. And if that is not enough reason to act, pending new regulations set to be introduced by the SEC in October, introducing new climate disclosure rules might be. And if that’s not incentive enough, what about paying attention to the Secretary-General’s dire warning?