In confronting climate change, many of America’s business leaders recognize the importance of moving toward decarbonization. But making progress on the journey to net-zero remains a challenge for many. It will require coordination, collaboration, and upfront financial investment to rapidly transform industries into a series of complex, interconnected, emission-free systems. Without that commitment, the effects of global warming are expected to disrupt our growth and could financially impair every industry and region in the country.
If left unchecked, the economic cost of climate change in the United States alone could reach $14.5 trillion by 2070. However, taking rapid action to transition to a prosperous, decarbonized economy could usher in a new industrial revolution in energy, mobility, manufacturing, and food and land use. It could also add as much as $3 trillion to the U.S. economy over the next 50 years. Achieving net-zero emissions by 2050 isn’t just an aspirational goal—it’s an economic growth imperative. If companies are not a credible part of the solution, the evidence suggests that the planet—and their bottom line—will likely suffer. Among the steps to consider:
- Transform Your Workforce Embrace sustainability and climate initiatives, such as embedding environmental, social, and governance (ESG) metrics or targets into company incentive plans. Consider aligning remuneration policies and incentive packages and benefits with sustainability and climate priorities. Encourage travel policies that reduce your organization’s climate footprint. These amount to dual benefits, with businesses boosting workforce engagement while moving along their sustainability journey.
- Build Sustainability into Production Examine your products and systems to find ways to generate carbon offsets and lower carbon emissions. This could include developing low-carbon products through the implementation of new practices and advanced technology. Explore the move to fully renewable electricity and other clean energy sources, allowing for broader decarbonization.
- Refine Internal Controls Review tax and customs reporting considerations related to your ESG activities. Companies with global geographic exposure can put processes in place to assess risks related to their supply chains.
- Invest in Decarbonization On a decarbonization pathway, companies could spark the creation of new industries, and transform existing industries into sophisticated, interconnected parts of a low-emissions global economy.
Dan Berner is a managing partner at Deloitte in Dallas.