Change is a must
For the majority of citizens, the climate issue has become increasingly important. According to a survey conducted by the Allensbach Institute, the proportion of people living in Germany who are very concerned about climate change rose from 37 to 61 percent, and among young people under 30 years of age, the figure rose to 68 percent. The Paris Climate Agreement is intended to limit global warming to 1.5°C in order to avoid the most devastating consequences of climate change — a goal that the IPCC climate experts consider indispensable. And, asset managers and institutional investors are recognizing the need for climate protection. They need to steer their investments towards forward-looking businesses in order to achieve long-term returns. They are in turn pressing companies to report on their climate risks and manage them systematically.
The number of companies that make their business activities climate-neutral is increasing. At Daimler, for example, the aim is to achieve this at its European locations by 2022. A useful rule of thumb is that about 70 percent of a car comes from suppliers, they too will need to commit to CO2 reduction in the future. The supplier Bosch is getting ahead and wants to start producing CO2-free as early as 2020. This means switching its own production and electricity procurement to renewable energies and offsetting any remaining CO2 emissions through high-quality, effective climate protection projects. It goes without saying that Bosch is also passing on corresponding requirements in the supply chain.
Climate neutrality is the new normal
The crème de la crème is the climate-neutral value chain. And the Scienced Based Targets initiative (SBTi) is committed to this. It checks the climate targets of companies on the basis of scientific calculations and will only accept them if they are suitable for achieving the Paris climate goal. There are many vociferously proclaimed climate targets which, on balance, contribute nothing to achieving the Paris Climate Agreement. In order for SBTi to have its climate targets recognized, it is imperative that reduction potentials in the upstream and downstream value chain are identified and set as targets.
Therefore, companies should first get a rough overview of how large their total CO2 footprint is. On this basis, climate targets are then defined and relevant KPIs determined. Progress should be reported on a regular basis, taking into account climate-related frameworks such as CDP or TCFD. A strategic approach to climate is the basis for the business success of tomorrow. It helps to seize opportunities and manage climate risks that could soon resonate with the capital market.
akzente supports its clients in systematically identifying climate risks, drafting a climate strategy and defining climate targets. We support companies in operationalization and reporting, and offer appropriate approaches for broad stakeholder communication.