When Ignoring Climate Change is Not an Option

Decarbonization is no longer a distant dream, but a business imperative that requires immediate action. The recent Emissions Gap Report 2023 by the United Nations emphasized the urgent need for a significant reduction in greenhouse gas emissions to limit global warming to 2°C or 1. 5°C above pre-industrial levels. However, many companies in the US are now hesitant to make significant investments in decarbonization, citing issues like inflation, economic uncertainty, and the threat of greenwashing litigation. This phenomenon is often referred to as "greenstalling. " Despite the challenges, it's crucial to acknowledge that decarbonization is not a luxury, but a necessity. Inaction will only lead to higher costs in the future. Moreover, regulatory requirements, investor ratings, and consumer expectations are pushing companies to commit to credible climate plans. It's time for organizations to have the confidence to take action and get ahead of the hurdles that will accompany those who sit on the sidelines.One of the main concerns driving greenstalling is the fear of greenwashing. Companies worry about setting sustainability goals publicly, including emissions reduction targets, only to be accused of making empty promises. However, this fear can be easily dispelled by creating credible decarbonization plans that are embedded in their core business strategy. Another fear is the backlash from stakeholders and customers. Some companies may experience pressure from activist investors or social media campaigns, leading them to reconsider their emissions reduction targets. However, this approach can ultimately damage a company's reputation with its most important audiences. It's essential to understand the origin and true reach of these campaigns, alongside customer demographics. Lastly, companies often cite the costs associated with implementing decarbonization initiatives as a reason for greenstalling. While the process can be complex and capital-intensive, there are many options available to overcome resource limitations. Funding has been made available through the Inflation Reduction Act (IRA) grants and tax incentives, and as-a-service models enable companies to implement decarbonization measures without keeping associated high capital expenditures on their balance sheet.