The views and opinions expressed in this article are those of the thought leader as an individual, and are not attributed to CeFPro or any particular organization.
Nora Lovell Marchant, VP, Sustainability, American Express Global Business Travel
Two words – risk and opportunity. From a defensive standpoint, institutions cannot afford to fail to future proof themselves from the energy transition that is presently underway. From an offensive standpoint, the climate transformation offers a $100 trillion dollar investment opportunity for clean energy.
Urgency is imperative. According to the International Energy Agency, the path to net zero is narrowing and staying on track requires “immediate and massive deployment of all available clean and efficient energy technologies.” Those companies that prepare for the seismic shift happening to the global economy will prevail over competitors.
The world must adhere to the principles of the Paris Agreement, a treaty amongst nearly 200 nations with a goal of limiting global warming to well below 2ºC – and preferably to 1.5ºC – above preindustrial levels. In 2021, at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), countries around the world indeed kept the goal of 1.5 degrees alive by committing to revisit and strengthen their climate plans by the end of 2022. In addition to the Glasgow Climate Pact from COP26, nations also forged multilateral agreements to halt deforestation, phase down coal, phase out internal combustion engine vehicles, cut methane emissions, and commit capital towards a just energy transition.
While the agreements at COP26 chart a clearer course to achieving climate targets, ultimately it will fall to businesses to meet these commitments and deliver solutions. It’s the private sector that drives the investment, research, and development necessary to shift the planet to net-zero. Collectively, companies and countries must demonstrate meaningful progress at COP27 in Egypt this year in order to avoid the most catastrophic impacts of climate change.
Environmental non-governmental organizations (NGOs) have created frameworks and guidelines for institutions to follow in the pursuit of credible net zero targets. For example, the science-based targets initiative (SBTi), and the recent publication of net zero guidance, provides companies with sector-specific pathways for decarbonization and reducing greenhouse gas (GHG) emissions.
Climate scientists have determined that the world must achieve net-zero emissions by mid-century, which requires the reduction of GHG emissions. On the journey to net-zero, carbon offsets represent an important bridge to the future. Carbon offsets have become a controversial topic – but they shouldn’t be so long as they are high-integrity carbon credits.
The science-based targets initiative, for example, recognizes that companies financing high-quality nature-based carbon offsets can effectively contribute to society’s transition to net-zero in furtherance of the UNSDGs. So long as carbon offsets are not used as a substitute for reducing value chain emissions, carbon offsets are critical to society achieving net-zero emissions and should indeed constitute part of any corporate climate strategy. Last year, 100 countries pledged to halt and reverse deforestation by 2030, covering 85% of the world’s forests. Carbon offsets will be the climate finance mechanism driving capital to protect the world’s forests, keep them intact, and preserve biodiversity in these natural ecosystems for the benefit of nature and local communities.
Companies shouldn’t wait until 2030, 2040 or 2050 to compensate for value chain emissions with carbon offsets. Once native forests are destructed – they are gone forever. Compensating for carbon emissions with trusted carbon credits is an important step for everyone to take now – effective immediately.
Every sector is unique such that decarbonization will be different depending on the industry at issue. For example, my company, American Express Global Business Travel, is heavily tied to the aviation sector, which is particularly hard to abate given the technical challenges and costs of decarbonizing flight. Whereas the electrification of smaller vehicles is rapidly gaining traction, the electrification of larger vehicles – airplanes – is decades away from impacting at scale. This is why we are heavily investing in sustainable aviation fuel (SAF).
SAF is a lower-carbon replacement for fossil-based jet fuel. SAF is derived from biomass and other sustainable materials, including wastes and residues, cellulosic feedstocks, waste gases, and captured CO2. Blended with conventional jet fuel, SAF is considered a “drop in” solution because it can be supplied through existing airport fuelling infrastructure and can be used by airlines without requiring technical modification to their current fleets. SAF can reduce lifecycle greenhouse gas (GHG) emissions by 80% in neat form when compared to fossil jet fuel, while also significantly reducing conventional emissions like particulate matter and improving air quality and public health.
Liquid fuel will dominate aircraft propulsion for the decades to come so the entire aviation value chain must come together to ensure the fuel itself is sustainable. SAF can lead the energy transition for the global aviation industry. There are challenges associated with SAF, namely price and scale, but these obstacles can be overcome with public sector policy support alongside private sector investment and innovation. SAF is just one example of technology driving decarbonization in one sector – this blueprint must be replicated across all sectors to achieve net-zero globally by 2050, and the clock is ticking.
Nora will be presenting at the ESG Congress, this event will be taking place on October 18-19 at Etc Venues Lexington.
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