Over the past week, Edison Energy has been participating in the COP26 Climate Change Conference in Glasgow, Scotland, where countries have come together to accelerate action towards the goals of the Paris Agreement. In this article, Emily Williams, Edison’s VP of Strategy and Sustainability, discusses the role the private sector can play in the fight against climate change.
The past two years have seen a record number of corporate sustainability pledges. Major players like Microsoft and Apple have rolled out public commitments to achieve net zero by 2030, while BlackRock, the world’s largest asset manager, has asked companies to disclose a plan for how their business model will be compatible with a net-zero economy. In addition, more than 1,000 businesses are working with the Science Based Targets initiative (SBTi) to reduce their emissions in line with climate science.
Local and state governments are on the same trajectory, increasingly setting sustainability targets with plans to meet these commitments through renewable energy procurements, fleet and building electrification, and energy efficiency measures.
“We’ve reached a tipping point in 2021 where there’s a real focus across governments, the financial sector, and the boardroom that we need to be doing more to act on climate,” said Emily Williams, Vice President of Strategy and Sustainability at Edison Energy. “Edison’s sustainability practice has really been evolving to help our corporate and institutional clients think about how to react to the urgency of acting on climate.”
Launched in 2020, Edison’s Sustainability Advisory helps clients with carbon footprinting, climate risk assessments, sustainable construction solutions and comprehensive strategy and goal setting.
“We do a lot of work with organizations that are looking for help in understanding how to set a net-zero strategy or perhaps those who have set a net-zero strategy but don’t really know how to get there,” Williams said. “We use our experience in engineering and analysis in understanding the different levers required for hitting net zero to help them with that strategy development, and then implementation.”
The private sector will play an integral role in meeting the commitments laid out in the Paris Agreement, adopted by 195 countries at the COP 21 climate summit held in Paris in 2015. The first instrument of its kind, the landmark agreement includes the goal to strengthen the global response to the threat of climate change by holding the increase in global average temperature to well below 2 degrees Celsius above pre-industrial levels while pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels.
Now, countries are being asked to come forward at the ongoing COP 26 conference with ambitious 2030 emissions reductions targets that align with reaching net zero by mid-century. To deliver on these targets, countries will need to accelerate the phase-out of coal, curtail deforestation, speed up the switch to electric vehicles, and encourage investment in renewables.
“I think there are now a lot of options in the U.S. for finding renewable energy solutions, and within Europe lots of options for corporates to source renewables,” Williams said. “When I think about the challenges for decarbonization and meeting these net-zero targets, I think one of the largest ones is, how do you access renewable energy in parts of the world where there are not currently options for renewables, where there are either policies that don’t let the corporate market access them or there are not established renewable energy opportunities?”
That’s something that the U.S. Department of State’s Bureau of Energy Resources (ENR) is working on, assisting countries in their decarbonization efforts through the incorporation of a more diversified energy mix. This includes increasing the deployment of clean energy technologies, including renewables and energy storage, promoting energy efficiency, and developing transparent and sustainable sourcing of critical minerals necessary for the clean energy transition in resource-rich countries.
“Another challenge is around how to decarbonize your Scope 1 emissions, especially for hard to abate sectors that need a lot of high heat applications,” Williams said. “This is a really big challenge for a lot of organizations. Another challenge is the transition to net zero and setting a goal like this. It’s not just about switching your energy. It’s really about wholesale changes to how you as a business are thinking about everything you do. I like to think about net zero really as change management within an organization, so it’s not just on your energy team or procurement team–it’s how you’re incorporating these net-zero processes across your organization.”
Finalizing Article 6
While significant progress has been made around carbon markets under Article 6 of the Paris Agreement, which outlines ways that countries can implement their Nationally Determined Contributions (NDCs) through voluntary cooperation, a final agreement between countries around international emissions trading was ultimately never reached.
“Article 6 of the Paris accord is focused on how and if countries can reduce their emissions with carbon credits and using the carbon markets,” Williams said. “The rules have not yet been finalized on how this works, so there’s an interesting coalition of compliance markets for countries that are setting their NDCs, and then corporates that are also accessing these markets to reduce their emissions. We’re hoping that in Glasgow these rules will be finalized, and we can see how and if carbon markets play a role in decarbonization and getting to the goals of Paris.”
Within the voluntary market, carbon offsets–used to convey a net climate benefit from one entity to another–and Renewable Energy Certificates–which offset electricity use from non-renewable sources–offer many entities a more accessible, cost-effective mechanism to meet their emissions reduction targets.
“I would argue that RECs and carbon offsets are a great interim solution to show a commitment today while actually reducing emissions,” Williams said. “But we are going to fail as a country and as a globe if our solution is just to continue with emitting our emissions as normal and then just trying to remove them. When I talk about change management, it’s really about how do you make sure you’re not emitting in the first place? How do you reduce your emissions wherever possible first? How do you follow that up by substituting where your emissions are coming from and changing to lower emitting sources, and compensating with carbon removals as the end piece?”
The latest IPCC (Intergovernmental Panel on Climate Change) report, released in August, finds that unless there are immediate, rapid, and large-scale reductions in GHG emissions, limiting warming to 1.5 or even 2 degrees Celsius will be beyond reach.
The report shows that GHG emissions from human activities are responsible for approximately 1.1 degrees Celsius of warming since between 1850-1900, and finds that averaged over the next 20 years, global temperature is expected to reach or exceed 1.5 degrees of warming.
“The latest IPCC report out in August really talked about the need to have global emissions by 2030 to be on track for the 1.5-degree scenario, so we’re totally on the wrong trajectory right now,” Williams said. “It’s not just about getting to net zero by 2050. It’s really about taking urgent action today and doing as much as possible to accelerate that energy transition now.”
Click here to read previous installments of our Countdown to COP26 Series.