Read our blog on "Corporate Net-Zero Pledges: The Bad and the Ugly" here.
In the lead up to this year’s COP 26, companies, investors, and financial institutions around the world are engaged in discussion on how to assess corporate alignment with the Paris Agreement. While many companies are making rhetorical commitments to carbon neutrality by 2050, the superficiality and inconsistency of many reporting frameworks and metrics has made it difficult for governments, investors, and other stakeholders to distinguish among and assess company commitments and disclosures. Correspondingly, it is difficult for investors to assess or disclose portfolio or product alignment with the Paris Agreement.
The Columbia Center on Sustainable Investment (CCSI) and the Columbia Climate School, with support from Iberdrola, hosted a virtual, global conference focused on corporate alignment with the Paris Agreement, including discussions on:
Net-Zero Pledges: how prevalent, and how realistic
Challenges and risks of diverse carbon accounting methods
Internal metrics to shift corporate strategy toward decarbonization
Climate finance: opportunities and hurdles
8:00am - 9:00am: Net-Zero Pledges
Ignacio Galán, Chairman and CEO, Iberdrola
Jeffrey Sachs,Professor and Director of the Center for Sustainable Development, Columbia University
Moderator: Perrine Toledano, Head: Mining & Energy, Columbia Center on Sustainable Investment (View PPT presentation)
Meeting the Paris Agreement targets requires achieving carbon neutrality no later than 2050; this will require the rapid transformation of nearly every sector, including most notably that of energy and utility companies. In this session, Jeffrey Sachs described the transformation that is needed to achieve the Paris Agreement commitments. Ignacio Galán described the steps Iberdrola has taken to embed Paris alignment in Iberdrola’s corporate purpose. CCSI’s Perrine Toledano provided a general overview of corporate pledges, and how these pledges fall along a spectrum from declarations to meaningful plans to embedded purpose.
9:00 - 10:30 am: Challenges and Risks of Diverse Carbon Accounting Methods
Moderator: Michael Burger, Executive Director, Sabin Center for Climate Change Law and Senior Research Scholar, Columbia Law School
While voluntary frameworks for accounting and disclosing carbon emissions are proliferating, carbon accounting methodologies are not harmonized. CDP, for instance, accepts 64 carbon accounting methodologies. Each company independently determines how to use the various frameworks and methods. Moreover, generalized reporting frameworks do not provide the specific requirements needed for accurate reporting within a specific supply chain. This panel discussed how the lack of harmonization of carbon accounting methods could hinder companies from making progress toward Paris Agreement targets, and the various solutions and approaches that could address this challenge.
Katarina Fjording, Head of Volvo Car University & Sustainability Americas, Volvo Car USA
Margaret Henry, Director Sustainable Agriculture, Pepsico
Gonzalo Saenz De Miera, Director of Climate Change, Iberdrola
Eva Musso, Head of Sustainability and Government Relations, BASF
Fleming Voetmann, Vice President, Marking Communication & Sustainability, FLSmidth
Moderator: Iliana Lazarova, Senior ESG Analyst, Pension Protection Fund
A company’s internal corporate governance, including incentive structures and metrics (e.g.: KPIs, high carbon price, pay cheques, climate change committee at boards, independence of boards) is critical toward meaningfully alignment with climate objectives. This panel took an inward look into companies’ internal corporate governance frameworks, seeking to identify incentive structures and metrics that companies could use to fundamentally shift the strategy to be in line with the Paris Agreement. The panel featured companies that have taken and are taking approaches to meaningfully shift their business models.
12:30pm - 2:00pm: Climate Finance: Opportunities and Hurdles
Laura Segafredo, Global Head of Sustainable Research, ETF and Index Investments, BlackRock
Aniket Shah, Managing Director and Global Head of Environmental, Social and Governance (ESG) and Sustainable Research, Jefferies Group LLC
Moderator: Clare Hierons, Senior Programme Manager Finance & Capital Market Transformation, Laudes Foundation
This final panel focused on the state of climate finance, assessing hurdles and opportunities toward alignment with the objectives of the UNFCCC and the Paris Agreement. Building on previous panels, discussants addressed the role of institutional investors and asset managers in aligning capital with the Paris Agreement; data and metrics used in assessing such alignment; and, where such data is lacking, how investment decisions are assessed and made. Panelists also commented on financial products structured to achieve climate objectives and on where they see trends and future opportunities in this field. Panelists represented diverse financial institutions and policymakers.