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COP28: What Business Leaders Need to Know and What Chief Sustainability Officers are Thinking

December 4, 2023
By Gaby Sulzberger, Pia Heidenmark Cook, Aurélie Motta-Rivey & Kensey Biggs

With COP28 kicking off last Thursday, there are some considerations that executives should keep in mind as the event continues over the next week.

What Business Leaders Need to Know About COP28

  • The private sector has a key role to play in accelerating decarbonization, particularly regarding collaboration across businesses, as well as borders.
  • Leaders should maintain focus on the long term while adjusting to the realities of the present, squaring resilience with net-zero commitments.
  • Private and public sectors should go on the offense, making bets on green energy and deploying capital at scale.
  • Significant investment in new green technologies is needed for a successful global energy transition.
  • Leaders should prepare for the biggest capital reallocation of our lifetimes.
  • Nature-based solutions, like reforestation and improving biodiversity, can help address the converging crises of climate change and nature loss.
  • Leaders should collaborate across ecosystems, involving private, public and philanthropic communities in sustainability efforts.
  • Leaders should facilitate a just transition for lower-income countries, which are on average more likely to be exposed to certain climate hazards.
  • Africa will play a pivotal role in the energy transition. An orderly energy transition in Africa could unleash crucial economic growth in the region.
  • Business and government leaders should transition from commitment to accelerated action for COP28. We anticipate more commitments from corporates, countries and coalitions over the next week.

What CSOs Are Thinking: Insights from Teneo’s 2023 Climate Week NYC Dinner

With COP28 underway, we have been reflecting on the insights gleaned from our Climate Week NYC Dinner this fall, which was hosted by Gaby Sulzberger, Chair of Teneo’s Global ESG Advisory; Pia Heidenmark Cook, IKEA’s former Chief Sustainability Officer and current Teneo Senior Advisor; and Aurélie Motta-Rivey, a Senior Managing Director at Teneo and the co-founder of Societer, France’s first sustainability leadership consulting firm.

The event convened a group of C-suite executives, primarily Chief Sustainability Officers (CSOs), from some of the world’s largest corporations, as well as senior leaders from leading industry organizations and NGOs. Below we have summarized a collection of insights from the event.

Emerging Topics to Address and Focus Areas to Move the Agenda Forward

Connecting Climate Change & Health: Giving a Human Face to Climate

CSOs resoundingly agreed that rapid change at scale will require showing the public how climate change directly compromises our health and our kids’ health (access to clean air, water, shelter). They said “giving a human face to climate” is required to make this concept resonate with people around the world and compel them to support the energy transition.

Implementing Action at Speed and Scale

Only 15% of the 2030 SDGs have been met today. This year stakeholders are emphasizing not only action, but the acceleration of action – and at scale with a systemic approach. While CSOs agreed on the urgency of expediting the energy transition, they admitted their own experiences often have been quite difficult.

Inviting Kids into the Climate Conversation

We were surprised by how many CSOs proactively broached the urgency of including kids in the climate discussion. While this may be obvious for consumer brands, CSOs from companies across sectors cited this as a significant issue as frequently as they cited the importance of connecting climate change to health.

Personalizing Sustainability—and Putting It Second

Success in ESG means meeting customers where they are, per the CSO of one of the world’s most recognized brands. For example, to appeal to shoppers, start with “this garment is more comfortable,” then the second bullet is “and it's sustainable.” A claim of better quality or performance – along with a sustainability claim – increases consumer appeal much more than a sustainability claim alone.

Investing: ESG Education vs. Regulation?

One CSO said her company decided to stop investing in ESG education and instead directs funds to support environmental policies and local laws related to sustainability. She is confident this is the best way to get scale in the climate transition.

Going Multi-Local

Frequently, we view ESG and climate through a “U.S. vs. Europe” lens. One former CSO said we should be contemplating ESG and climate through an urban vs. rural lens – with an eye on local nuances that vary among communities, too.

Addressing Intersectionality

One CSO noted the growing awareness on intersectionality and interdependent systems of discrimination and an increasing awareness of climate justice---and its perils. When discussing intersectionality, the CSO said that “unless we solve for the social issues first, we will never solve for the environmental issues.”

Quantifying Natural Capital and Biodiversity

As Teneo has noted in previous thought pieces, biodiversity has moved up executives’ list in importance. This was apparent with the publication of the first Science Based Targets for Nature (SBTN) this past May and the launch of the Taskforce on Nature-related Financial Disclosures’ (TNFD) final recommendations at Climate Week.

A Return to the Terminology Debate

The ESG landscape is rife with misinformation but also stigmatization. Some CSOs’ companies stopped using the acronym “ESG” due to its politicization. A growing body of natural language processing (NPL) research and sentiment analysis has uncovered insights on individuals’ reactions to specific words related to sustainability. Simple language and less jargon are key (e.g., “nature” is favored over “biodiversity”).

Connecting Circularity and Decarbonization

CSOs discussed how historically, circularity and decarbonization have been two separate conversations – often managed by separate teams in a company with separate budgets, goals, and timelines. These gaps are hindering long-term ESG targets, especially at small and mid-cap companies. We expect closer connectivity between circularity and decarbonization over time.

Pondering Data: Decision-ready vs. Directional

CSOs lamented the volume of bad ESG data in the marketplace and the challenge of making timely decisions while knowing the quality of the data available will likely improve as ways to measure data evolve over time. Increasing ESG regulation brings more ESG litigation, so CSOs must navigate decision-ready vs. directional data.

Increasing Collective Action

Analysts at ESG ratings agencies are now reviewing participation in industry coalitions. By pooling resources, companies can spend less capex on tackling issues like climate. But CSOs agreed a consortium of peers normally stifles progress due to economics, dropping to the lowest minimum consensus, which is “not sufficient when you have ambition.”

Looking Ahead

The global energy transition represents a new frontier. As such, the challenges ahead are daunting, but the opportunities are encouraging and inspiring. We look forward to seeing the events that transpire over the next week before the conclusion of COP28 on December 12, 2023.

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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