Climate & Business: Are Net Zero Targets Enough?

Despite huge hurdles, we are seeing traction in the climate space. In his 2020 letter regarding corporate governance, BlackRock CEO Larry Fink turned heads when he asserted that “climate risk is investment risk”. In 2021, money held in ESG and other sustainability focused funds rose globally by 53% to $2.7 trillion. This past March, the SEC proposed new requirements for publicly traded companies to report detailed information on greenhouse-gas emissions and risks related to climate change.

Suffice it to say, climate change is and should be front and center as a key business issue for a diverse set of stakeholders across all sectors including leaders, investors, and regulators.

Brian Goebel and Sonia Sharma joined The Goizueta Effect Podcast to discuss climate change and business, including the enormous influence and responsibility business holds in driving toward a climate-smart world.

Brian is the Managing Director of Goizueta’s Business & Society Institute. Through the Institute, students, faculty, staff, and partners focus on addressing complex challenges confronting people, the planet, and the business community through academic discovery and purposeful action.

Sonia is a second-year MBA student at Goizueta Business School. She’s also a Social Enterprise Student Fellow and future consultant at McKinsey. She recently attended the ClimateCAP Global MBA Summit, along with hundreds of leading students across the nation to dig in on these issues.

This episode of the Goizueta Effect was co-created in partnership with MBA students and ClimateCAP delegates Sonia Sharma, Vaishali Nijampatnam, Margot Merwin, and Carlos Vazquez.  

Defining the Climate Issue  

Climate Change  

In 1992, the UN held a framework convention on climate change. The UN determined that climate change is attributable directly or indirectly to human activity and that human activity has altered the composition of the global atmosphere. In addition to natural climate variability, human activity has accelerated the change by adding more carbon and impacting the environment.  

Sustainability  

In order to promote sustainability, we must ask ourselves, “how do we integrate our future generation into our decision today?” In 1987, the UN defined sustainability as meeting the needs of the present without compromising the ability of future generations to meet their own needs.  

ESG 

ESG (Environmental, Social and Governance) is a set of metrics that helps investors and organizations prioritize making a positive impact on the planet and its people in addition to generating profits. Environmental metrics help corporations refine their practices that affect the environment. For example, companies have begun examining how their supply chains and carbon footprint impact the environment. Social metrics involve serving the community of which the corporation is a part. How much does the corporation support the people in their community, especially with regard to diversity, equity, and inclusion? Lastly, governance metrics involve how the company, its board, key directors, and employees make decisions and how to hold themselves accountable.  

Climate Justice Should Be Front & Center   

Dr. Adrian Hollis is a senior climate justice and health scientist at the Union of Concerned Scientists. She explains that minority communities are harmed “worst and first” when it comes to the impact of climate change both globally and here in the United States. To promote climate justice, we must shift beyond a business mentality that only considers decarbonization and shift to a system that recognizes and challenges the disproportionate effects the climate crisis has on diverse communities.

Too often, companies claim to care about climate change, yet they are only involved in greenwashing. Greenwashing is a form of deception: it’s when companies spend time, money, and resources marketing their products, aims, and policies as environmentally conscious, but in reality, they are not doing anything to minimize their environmental impact. For example, .css-j9qmi7{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:row;-ms-flex-direction:row;flex-direction:row;font-weight:700;margin-bottom:1rem;margin-top:2.8rem;width:100%;-webkit-box-pack:start;-ms-flex-pack:start;-webkit-justify-content:start;justify-content:start;padding-left:5rem;}@media only screen and (max-width: 599px){.css-j9qmi7{padding-left:0;-webkit-box-pack:center;-ms-flex-pack:center;-webkit-justify-content:center;justify-content:center;}}.css-j9qmi7 svg{fill:#27292D;}.css-j9qmi7 .eagfbvw0{-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;color:#27292D;}