Making Climate Transition Plans Work: Cross-industry Takeaways

Around 50 business leaders and experts gathered at the Empire State Building on 24 September at Transform to Net Zero’s Climate Week NYC event ‘Making Climate Transition Plans Work: Cross-industry Takeaways’.

The event was designed to bring real-life working examples of how Transform to Net Zero members are implementing decarbonization roadmaps for the benefit of sustainability practitioners. Leaders from Transform to Net Zero members HSBC, Starbucks, and Wipro shared their experiences creating or implementing their own Climate Transition Plans with a corporate audience.

Roundtable discussions led by Matthew Cullinen, Vice President of Global Sustainability, HSBC, focused on setting and reporting investment targets in Climate Transition Plans (CTPs). Participants discussed the importance of ensuring the capital expenditure (CAPEX) needed to implement the company’s CTP is estimated, and included to the extent possible, in the CTP. Starting with relevant target years (e.g., 2030) and working backwards with business units to integrate CAPEX predictions has proved an effective approach to estimating investment needs. Internal carbon prices are being used to assess projects internally and help develop decarbonization plans for relevant assets.

Across industries, companies are encountering common headwinds and tailwinds. Headwinds include the lack of standardization for what CAPEX is considered sustainable; a resulting difficulty in gaining internal approval for disclosing CAPEX estimates; and the risk of abrogating new greenwashing standards. As a result, information disclosed in CTPs can often be less ambitious than what is being discussed internally. On a more optimistic note, companies are benefitting from Inflation Reduction Act funding for decarbonization initiatives and R&D, and collaboration among peers and with suppliers is steadily increasing.

Another of the roundtable discussions focused on creating and acting on decarbonization roadmaps. Participants discussed the challenges in calculating GHG emissions data and setting targets especially when a company is growing and has mergers and acquisitions; the difficulty in obtaining emissions data from suppliers; and data comparability challenges. Practitioners also shared experiences on the benefits of different types of decarbonization strategies. For example, an area which customers may see as important – e.g. packaging – may not be a large emissions source. However, there is a benefit in implementing customer-facing changes, as they can yield positive momentum that other initiatives can benefit from.

The discussion also covered how to smooth the progress of the CTP roadmap, such as by linking CTP review dates to the relevant business planning cycles and aligning the CTP cadence with current business priorities.

Roundtable discussions led by Susan Kenniston, Global Head and VP Sustainability, Wipro Limited, focused on the practical aspects of operationalizing and governing net zero, as well as highlighting directional trends. Discussion touched on how to evolve existing organizational and governance models in response to a rapidly changing external and regulatory environment. The focus then turned to data: collecting it, managing it, and addressing the increase in energy-intensive data management that new regulatory regimes portend. Fortunately, a number of new technologies are emerging to facilitate the process, while concurrently democratizing access to data across relevant departments.

Companies are also finding ways to creatively and thoughtfully ease change management – translating data currently collected into the types and formats needed for the Corporate Sustainability Reporting Directive (CSRD); setting an internal carbon price to spur decarbonization-aligned decision-making; and establishing shadow governance structures to support the integration of sustainability into corporate risk, controls and strategy decision-making.

In addition to the roundtable discussions, BSR gave an overview of CTPs and the current landscape, including Transform to Net Zero’s guidance. EDF shared Net Zero Action Accelerator’s  new transition plan pathway which helps companies navigate leading best practices, frameworks, and guidance. The tool includes key resources, case studies, and eight action steps to create and disclosing a high-quality CTP.