“When we talk about transformational finance, it’s about where we are putting capital and where we are advising clients to put capital today and in the future.” —Alexandra Liftman, Bank of America
“We are unambiguous in terms of the science of climate change. Need for action is real. We are on record saying that we need a price on carbon. That is the bottom line.” —Jeff Seabright, The Coca-Cola Company
“If the cloud was a country in terms of electricity use, it would be the fifth-largest in the world. Usage is supposed to triple by 2020. And currently our rules and regulations are not set up to get companies to make tangible improvements.” —Casey Harrell, Greenpeace International
Hope opened the session by introducing three perspectives on climate leadership. Representing the nonprofit perspective, Harrell explained that the information and communications technology (ICT) industry can drive levels of energy efficiency to save gigatons of carbon. Cloud computing is the fastest-growing sector by electricity usage, and ICT companies have a responsibility to place data centers in geographies that use clean energy. As data centers becoming increasingly globalized, Harrell continued, ICT companies have a significant lever of influence in deciding where to build. Utility companies also bear responsibility for creating energy-efficient solutions and using clean sources.
Liftman introduced the financial services perspective. When thinking about transformational finance and its role in reducing carbon impacts, she cited the importance of capital allocation and working with customers to advise them on investments. Liftman and Bank of America look closely at energy efficiency, renewable energy and infrastructure, innovative fuel technology, and emerging water and waste issues. For example, Bank of America provides commercial loans to green builders. The company financed the retrofitting of the U.S. Capitol building and U.S. Senate buildings. Bank of America also announced a partnership with the U.S. Department of Defense to install solar energy panels on 100,000 military houses. Because of Bank of America’s scale, they were able to complete one large transaction as opposed to many smaller ones, and Liftman explained that they are talking to many clients about replicating these sorts of deals. Bank of America is looking to structure these deals to fast-forward its work in the clean energy space.
Hope asked about the main obstacles to these sorts of deals, despite increasing customer interest. Liftman explained that institutional investors see the best returns in deployment of clean technology, given that the prices of many clean tech companies’ technology and stock have declined considerably. As a result of low prices, technology companies are struggling to innovate in the space, but there is a boon of deployment projects.
Seabright discussed the corporate perspective. Coca-Cola views climate change as impacting its entire business ecosystem, which consists of almost 1,000 manufacturing sites, 300 bottling partners, and 207 countries. When the company sets goals, they are acting on behalf of these various stakeholders. Seabright explained that the company focuses on climate in three ways: its footprint, handprint, and blueprint. Coca-Cola focuses on its own operations and the carbon impact attributed to its footprint. Coca-Cola also reaches into the supply chain to address issues like deforestation and lower-impact refrigeration, extending its handprint. Finally, Coca-Cola promotes a policy architecture and framework to establish a blueprint for sustainable business in carbon management.
Seabright explained that Coca-Cola partnered with Unilever to evaluate Scope 1, 2, and 3 greenhouse gas emissions (e.g., from fuel burned on site, purchased electricity, or business travel) as a function of revenue. The carbon-to-revenue metric of the top 50 consumer goods companies was 5 billion metric tons of CO2 equivalent, roughly a billion shy of annual U.S. emissions. Hope inquired about the main obstacles to collaboration, to which Seabright responded that committed CEOs are integral to responsibly driving progress.
The first question from the audience related to how the panelists respond to skeptics who challenge their models for achieving genuine change. Liftman explained that businesses are using carbon improvements to drive revenue and mitigate risk. Seabright pointed to Coca-Cola’s goal of emitting less carbon in their manufacturing in 2015 than they emitted in 2005. Even Coca-Cola’s top bottlers expressed approval of positive engagement to set a bold but achievable goal.
The next question was about engagement with policymakers. Seabright reaffirmed Coca-Cola’s commitment to real change based on the consensus surrounding the science of climate change. Harrell emphasized that well-funded lobbyists antagonizing the progressive business agenda are winning. Corporations, in his view, do not need to join more groups or clubs. Rather, they need to offer financial resources to government affairs groups to win advocacy and lobbying battles.
The audience asked the panel about their views on mitigation and adaptation. Seabright explained that without water, Coca-Cola would not have a business. The company reports to the U.S. Securities and Exchange Commission about the risk it faces due to water availability. He continued to clarify his view by starkly describing the need for society to balance three options: mitigation, adaptation, and suffering. That is, companies must engage in both mitigation and adaptation activities to reduce the amount of suffering as a result of climate change.