As he assumed the post of the highest elected public officer of the United States, President Joseph Biden characterized his [as the] “Climate Administration” and immediately (the fabled Day One actions) set out a very ambitious “climate crisis” policy agenda for action by the many arms of the Federal government agencies under his control. (Notably, all cabinet offices with their great reach.)
As a current commentary in the influential Harvard Business Review explains: “Biden put the environment squarely at the heart of U.S. federal policy, and for good reason. The future competitiveness of the U.S. economy is at stake, and climate action is an effective way to boost jobs, prevent future systemic shocks, and secure a prosperous future.”
In the commentary by Maria Mendiluce, CEO of the We Mean Business coalition, she posits at least seven important implications for corporate sector and other business leaders:
Climate regulation is coming (with a “net zero emissions” goal envisioned by 2050). Climate-focused regulations are being adopted around the world and we can expect to see some in the near term in the United States of America. The U.K. is an example – 2030 is the end date for sales of gasoline-powered autos.
Corporations will be in the vanguard in moving society in transitioning to the net zero ambitions (companies can help to scale up solutions for de-carbonizing society). Examples cited include Amazon, Apple, Ford, Microsoft, Walmart, Uber, and Verizon.
There’s risk for companies that delay climate action. Watch out if your enterprise is not “de-carbonizing” and transitioning from “black-to-a-green” energy company.
As we are seeing, investors are looking with favor on companies that taking action on climate matters – portfolio managers are moving away from high polluting firms. Asset managers like BlackRock are leading the way in pushing corporate leaders to adopt net zero targets. Capital is “looking” for greener businesses to invest in.
Soon, we can expect climate risk disclosures and reporting on GHG emissions to become mandatory. The Commodity Futures Trading Commission (CFTC) has warned that financial regulators must recognize climate change poses risk to the U.S. financial system. The head of that federal agency is now talked about as prospective Chair of the Securities & Exchange Commission in the Biden-Harris Administration.
While there has been discussion about carbon pricing schemes, and a bit of action in Europe, we can expect to see that discussion to increase in tempo and a price put on pollution.
Public sector investment in clean energy is on the rise (look at the volume of “green bonds” in recent months). In the United States, the new administration pledged to invest US$2 trillion in clean energy and infrastructure and the many Trump-Pence Administration rollbacks of environmental regulations are being put back in place by Biden-Harris actions.
We can expect to see more presidential Executive Orders, more administration, corporate and public sector pledges and commitments, and more Biden-Harris administration policy definitions related to climate action in 2021. President Biden plans to convene a Leaders Summit for Earth Day and have the U.S. government back at the table at COP 26, the global confab for climate negotiations. “The USA is back” is the theme for 2021.
Concludes Maria Mendiluce: “This is a turning point for the U.S. and the world. It’s not too late for companies to adapt to the new net zero economy and support a green recovery. There is also no time to lose.” We have selected her essay in HBR for the Top Story category this week, along with relevant developments in the “Climate Administration” of President Joe Biden and VP Kamala Harris.
The “We Mean Business” coalition has 1,596 companies involved with collective market cap of almost $25 trillion; these firms have made 2,000-plous “bold action climate commitments” to date. There is more information at: https://www.wemeanbusinesscoalition.org/
This is just the introduction of G&A's Sustainability Highlights newsletter this week. Click here to view the full issue.
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