The Biden-Harris Administration has renewed the United States’ commitment to climate action. Their latest proposal, The American Jobs Plan, outlines steps that the USA will take to achieve Net-Zero by 2050. The plan includes eliminating a tax incentive that favors fossil fuels, makes industries pay for environmental cleanup efforts, and expands investments in the electric vehicle (EV) market, to name a few. The administration has pledged to invest $2 US trillion in infrastructure and clean energy initiatives. And if signed (and it becomes law), the plan would be seen as one of the largest US federal efforts ever to reduce the country’s greenhouse gas emissions.
The message from Biden-Harris is clear: To survive and succeed in the net-zero future, now is the time to scale up a sustainable economy.
With a new congress in place, nationwide Net-Zero targets will be further translated into tactical regulations and incentives. US companies will be required to align their strategies accordingly.
What does this new era of climate leadership mean for US business leaders?
Firms that already have emission reduction targets will have an easier time reporting under the Biden Administration.
The government cannot reach Net-Zero by itself. Organizations with established emission reduction strategies that focus on minimizing global warming (less than 1.5 Celsius) will be miles ahead in meeting new government standards of those without.
Many US companies have already developed business goals and strategies to achieve Net-Zero emissions by 2050 or sooner; these include leaders like Amazon, Apple, Ford, Microsoft, Walmart, Uber, and Verizon. And like many others, they have planned corporate initiatives that include changes to the corporate office’s supply chain.
Those slow to react will increase their exposure to business risk.
Aside from the physical risk of supply shortages caused by water scarcity, or the impacts of extreme weather, companies that don’t monitor emissions data will be exposed to additional risks. Changes in technologies, markets, and regulations can increase costs, and if these need to be monitored and actioned quickly to minimize exposure to them. Additional regulation is coming to the US, and businesses that are not decarbonizing will miss out on the opportunity to grow and innovate, which may result in them losing market share.
Consumers will favor businesses that take climate action over others that don’t.
Research shows companies that reduce their emissions are favored by consumers and investors alike. Many are using these credentials to differentiate themselves from their competition, demonstrate their commitment to the environment and the local community. The world’s largest asset manager, BlackRock, is now pushing companies to achieve Net-Zero by 2050. Meaning, if a firm wants to be a part of their portfolio, they have to meet BlackRock’s climate change reporting standards. The importance of Environmental, Social, and Governance (ESG) will go hand in hand with these targets. Clear and transparent reporting is essential to measure the success of these individual initiatives and how they ladder up to achieving the overall strategy. This reporting keeps everyone honest, aligned and also helps increase investor confidence.
Business leaders are feeling Net-Zero pressure. The latest European CFO survey shows that most companies feel pressure from stakeholders to undertake ESG initiatives and commit to cause. Clients and customers are the main drivers of this pressure, with board members, employees, and government regulators falling close behind.
Corporate disclosures on climate risk and GHG emissions will become mandatory.
Corporate disclosures are nothing new to global brands, but not all countries mandate the same way, and not all are mandated. Australia has the National Greenhouse and Energy Reporting (NGER) regime, the United Kingdom has a reporting regime called: Streamline Energy and Carbon Reporting (SERC), and Canada has Greenhouse Gas Reporting Program (GHGRP). The Biden-Harris Administration has promised executive action requiring public companies to measure and disclose climate risk and GHG emissions. It is expected that they will work with Wall Street’s top regulator, the U.S. Securities and Exchange Commission, to make disclosures mandatory for public companies under its jurisdiction.
There will be new opportunities to innovate and improve business operations.
Innovation often comes out of necessity. To survive under the Biden-Harris Administration and beyond, businesses will need to adopt new ways to capture emission data and adjust their sustainability strategies. In a report by G30, Treasury Secretary Janet Yellen and other climate leaders estimate unmitigated climate change could reduce global GDP by up to 25% this century. The impact can be seen in higher sea levels, food insecurity, more frequent natural disasters, and significant increases in the number of dangerous heat days.
Many small changes ladder up to big wins. Companies willing to commit and take small steps in the short term to improve their operational efficiency will be well-positioned later. Smaller projects like undertaking energy-efficient initiatives like upgrading to LED lights, regular HVAC maintenance, and reviewing practices from their supply chain are examples of small steps that help in the long term.
How will accurate, validated utility data help you achieve Net-Zero?
To reduce emissions and energy consumption, organizations first need a trustworthy, accurate baseline of their consumption. You can’t measure incremental improvements achieved without it. The common quote, ‘If it can’t be measured, it can’t be managed’ comes into play. You won’t get funding and resourcing to implement initiatives if you can’t measure and articulate the Return on Investment.
Utility bill management platforms like Bid’s Utility Bill Management automatically collects, ingests, and organizes all utility data so you can look at historical electric, gas, and water at a moment’s notice – you can even access the individual utility bills themselves.
Normalized billing data is the raw data that is pulled right off a utility bill. Unlike EDI data feeds that only capture a small portion of utility bill information, Robotic Process Automation (RPA) captures 20+ bill data points giving companies access to more data on their consumption. The billing data can be easily uploaded into systems like Energy Star®’s Portfolio Manager® or into an EMS or ERP system. With the confidence of RPA’s accuracy, the billing data can become the source of truth and be a reference point come audit season or reporting discrepancies.
Greenhouse gas reporting mandates are coming, and companies with access to more usage data and audit-grade data will have a smoother transition into the climate-conscious American future.