Scientists say we have seven years to act.  Here are seven actions investors and businesses can take now:

Scientists say we have seven years to act. Here are seven actions investors and businesses can take now:

Scientists say we have seven years to act.  Here are seven actions investors and businesses can take now:

The New Year represents a new paradigm for private sector action on our global sustainability challenges and seizing the greatest opportunities of our time.

As climate change, water scarcity and loss of nature continue to impose hundreds of billions of dollars in damages, aligning strategies with the transition to a cleaner, zero-emissions economy has always been an investment. smart and a solid business practice.

We have now decisively moved into a new era where this is the default assumption for institutional and corporate investors. For all of us who have championed a healthier, more resilient and more inclusive economy, this is a time of optimism. But it is also a time of risk. Despite the momentum we have behind us, we are still woefully behind schedule to meet the global goal of halving climate emissions by 2030. We have no time to waste.

This is why the coming year will be crucial. It will present both new challenges and new opportunities for the private sector. With only seven years left to reach our goal, here are seven actions that will be key to its success in 2023 and beyond.

Deliver climate transition plans

More investors and companies have committed to a zero-emissions future than ever before. Over the past two years, 347 asset managers and owners responsible for $70 trillion in assets, more than half of the world’s total professionally managed assets, have pledged to achieve net zero goals in as part of the Net Zero Asset Managers and Paris Aligned Asset Owners initiatives. Yet while some investors have begun the hard work of planning for the transition to net zero, many more need to develop and implement their climate action plans in 2023, with emissions reductions of 2030 an essential part of these plans.

On the business side, over the past year more companies have set emission reduction targets and disclosed progress against those targets and strengthened their climate risk governance. But much more progress – at speed and scale – will be needed for a successful net zero transition.

Transform high-emitting sectors

Hundreds of companies are taking action against climate change. Yet the most ambitious actions of a few companies, or even a few hundred, are no longer enough. In December, we launched Ceres Ambition 2030 to respond to the urgency of this moment by shifting the focus from business action to decarbonizing six of the most emitting sectors in our economy, which together account for around 80% of total US greenhouse gas emissions – banking, electric power, food and agriculture, oil and gas, steel and transportation. Through Ceres Ambition 2030, investors and companies can sustain and catalyze momentum in the most emitting sectors in the United States

Implement the Inflation Reduction Act

The passing of the landmark Inflation Reduction Act last year ended years of efforts to achieve strong climate legislation that will serve our economic interests. But that will mean little without solid execution. The landmark law is built on a solid foundation of tax credits and is designed to attract investment, so its implementation will benefit powerfully from private sector expertise. Ceres has begun working with investors and companies to provide information to federal regulators and will remain engaged throughout 2023 to ensure this momentous law is properly deployed to maximize its climate and financial benefits.

Support a just and inclusive transition

Communities of color and marginalized populations are disproportionately affected by climate and water crises. Investors and businesses can support a just and inclusive transition to an economic future by building sustainable business models that protect the well-being of workers and their communities. Without a just transition, the ongoing economic transformation will be difficult. Investors and companies can bring workers and affected communities to the table when making critical decisions to ensure they incorporate plans for just transitions into strategy. Building a fair, inclusive and sustainable economy will not only benefit society in general, but also individual investors and businesses.

Valuing water

For too long, the water crisis has been ignored. Not anymore. From shocking images of destructive flooding in California to satellite images of Lake Mead drying up, these images encapsulate the water crisis and its growing impacts on investors, businesses and communities. The Valuing Water Finance initiative – a groundbreaking effort to engage with companies with large water footprints to treat water as a financial risk and bring about the large-scale change needed to protect water systems – has been launched last August with the support of 64 signatory investors managing $9.8 trillion in assets. In 2023, we are calling on more investors to lead the charge and put water at the forefront of business risk management.

Fight against the loss of nature and biodiversity

Growing biodiversity losses mark another massive economic risk, as mass extinction threatens to undermine supply chains for food, clothing, medicine and countless other industries. Half of the world’s GDP depends on nature, and tens of billions of dollars are at risk in the coming years as deforestation and climate change put more species at risk. Adding to the momentum of nations’ historic commitment at the COP15 biodiversity summit to protect 30% of the world’s land and seas, investors have announced the formation of Nature Action 100 – a new effort to spur greater ambition and action by companies to combat the loss of nature and declining biodiversity.

Treat climate risk as a financial risk

Last year, U.S. regulators made huge strides in acting within their existing authority to address the systemic impacts of climate-related financial risk — 230 public actions, ranging from proposed new regulations to speeches, according to our June dashboard of nine federal financial regulatory agencies. Most notable is the rule proposed by the US Securities and Exchange Commissions requiring public companies to disclose information about their climate risks and impacts. These regulatory advances are the result of calls to action from investors, businesses and the public, who understand that climate change poses a significant risk to supply chains, infrastructure, workforces and communities. , and that businesses and financial systems that fail to adapt will fall behind in a changing economy.

The progress of the past year comes as the old forces in our economy are unleashed. Spurred on by the undeniable momentum of transitioning to a cleaner, better future for the economy, for workers, and for the planet, they are engaging in coordinated efforts across the country to discourage investors from considering the sustainability concerns. This political pressure will continue in the coming year, but investors and companies must remember that the reason they act on climate and other sustainability threats has nothing to do with politics. . It is and always has been the same common business sense that guides smart investments and creates a fair, resilient and competitive economy, to minimize clear financial risks and deliver long-term sustainable returns.

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