How to Get Business to Take Climate Action

Strong commitments to carbon neutrality can pay corporate dividends and encourage bolder government action, says nonprofit leader Maria Mendiluce.


Time is running out to prevent global warming from spiraling out of control. We need to halve carbon emissions by 2030 to get on track to reach net zero by 2050 or face dire environmental, economic, and social consequences. Business must play a significant role if we are to meet those goals, says María Mendiluce, CEO of the We Mean Business coalition.

Established in 2014, the nonprofit brings together seven global organizations that work to catalyze businesses to drive policy change and accelerate the transition to a green economy. More than 1,300 businesses, including many of the largest in the world, have joined the effort, but much more needs to be done.

“We need radical collaboration within companies and also with policymakers,” says Mendiluce, who is based in Geneva. “If businesses step in with ambitious climate goals, we can give policymakers the confidence to make more bold and ambitious climate agreements and policies.” Mendiluce’s organization wants companies of all sizes to help. It recently collaborated on the launch of the SME Climate Hub, a platform to help small and mid-sized businesses curb their carbon emissions while building resilience and competitive advantage.

“If we want to achieve the targets, we must accelerate the adoption of renewable energy and EVs (electric vehicles), but we also need to invest in new technologies that we’ll need at scale in thirty or forty years,” she says.

Mendiluce has worked on energy, climate, and sustainable development issues for the International Energy Agency, Iberdrola, the Spanish government, and the World Business Council for Sustainable Development. She recently spoke about business’s role in combatting climate change with Simon Cooper, a partner at Oliver Wyman and head of the Oliver Wyman Forum’s Climate and Sustainability initiative.

How does We Mean Business work with companies to achieve its goals?

Climate action shouldn’t just be something that’s done in the corporate social responsibility department. Companies should integrate it into their investment plans, procurement practices, and talent management. They also need to track their progress and communicate with their stakeholders, clients, employees, and regulators. Regular communication holds companies accountable for their commitments and provides a positive example for those companies not yet on the journey.

We’re also asking companies to stand up and talk about what needs to be done and to convince others to act. We are asking them to map their links to trade associations, determine the degree to which their positions on climate change align with holding temperature rises to 1.5°C, and take action if they are misaligned. Businesses need to be consistent with their policy messages. They can’t say one thing in New York and something different in Europe.

Do the external commitments companies are making always match with their internal actions? Are those worrying about greenwashing right to be skeptical?

When companies commit to a climate target, they make a thorough analysis of what can be done. This analysis and recommendations are approved by their management team and board, and then they start to implement it. While it can take three or four years to see results, there is a point when we start to see exponential growth, as we’ve seen in recent years in renewable energy.

That said, change is not happening at the pace that we need to avert dangerous climate change, and it is vital that this is accelerated. While it is important to monitor the progression of company commitments, there is not enough emphasis on companies that are not yet taking any action. We need to focus more on those.

What is your take on the momentum of change? If you look back a year, it felt like a tipping point may have been reached. I think executives came out of Davos energized and committed to change. Then a pandemic came along. Has coronavirus changed things?

Big multinationals are still pushing forward on climate. Five of the six largest companies in the world recently made commitments to be net zero. There is a lot of ambition and a lot of momentum. We also have seen businesses mobilize during the pandemic. For example, there were 1,200 companies that sent different letters to policymakers that said we need to have a green recovery.

It is imperative that policymakers use stimulus spending to head off the worst economic impacts of the COVID-19 crisis in a way that boosts the economy in the short-term and creates long-term employment and growth, reduces social inequalities, and addresses the climate change challenge. The best way to do this is with a green recovery. If they support activities now that lock us into a high emission pathway for the next 20 to 30 years, it could result in failure to meet the Paris Agreement goals.

We cannot be blind. The other side of the story is that the health crisis is hitting the economy. Many companies are struggling to survive, unemployment is increasing, and despair is growing in society. Yet there is hope. Our recent analysis of different stimulus packages shows that green recovery spending is a more effective way out of this crisis compared to a sales or value-added tax cut.

What is the role of consumers in decreasing carbon emissions?

Consumers have a key role in driving demand to low carbon products, but we should not expect them to pay more because something is green. Actually, it should be the other way around. It should be more expensive to buy something that pollutes. We should have carbon pricing that reflects carbon externality. The price of goods and services should take into account the environmental costs.

If you were all powerful, what course would you take to reach net zero? Where would you prioritize your efforts?

I think we need radical collaboration from all sectors. First, the IT (information technology) sector has lots of resources and lots of tools. Can IT companies work together to massively help supply chains and small enterprises to decarbonize? Second, the automotive sector. Can they get their act together and understand they can all be key players in our EV (electric vehicle) future? Third, can we change procurement practices so there is demand for cleaner versions of energy-intensive materials such as cement, steel, or chemicals? Fourth, we need to put aside ideology and massively invest in nature, both to avoid deforestation and to invest in natural climate solutions  Finally, we need to bring people along with the transformation by creating better jobs (in the green sector) and by managing the transition in some of the difficult sectors by reskilling, retraining, and redeploying people.