New York Climate Week: A Call for Urgent and Collective Climate Action

New York Climate Week: It's all about acting faster and together

Increased severe weather events have alerted us to act faster against climate change. We think New York Climate Week adds value by emphasising value chain partnerships, infrastructure building and quality reporting. And there needs to be more alignment between corporate sustainability teams and the C-suite to future-proof decarbonisation efforts.

 

This year has shown us that it is more imperative than ever to accelerate efforts against climate change. The summer of 2023 was the hottest since the National Aeronautics and Space Administration (NASA) started recording in 1880, which has largely increased the chances of average temperature of 2023 exceeding the 1.5-degree-Celsius threshold of global warming. Primarily driven by human activities, the record temperatures have resulted in heatwaves in Europe, the US, Japan, and South America. What is more, wildfires in Quebec more than doubled this year compared to the past decade, leading to severe air pollution in Canada and the northeast US. Meanwhile, severe flooding happened in California, Brazil, Malaysia, Libya, South Korea, China, and more. Extreme weather events are becoming more frequent, more diverse, and more impactful.

These are going to increasingly affect our lives and businesses around the world. To name a few, heat and flooding will likely undermine labour productivity in apparel hubs in Asian countries. Extreme weather can affect operations in the agriculture sector. Hurricanes and sea level rises will pose greater risks to the real estate sector. All these will put higher pressure on the insurance sector. It is estimated that global economic losses from extreme weather events mounted to $125bn in the first half of 2023, up 41% from the previous ten-year average, and only half of the loss was insured.

Therefore, not only do we need to act, but we need to act faster to keep the door to limiting 1.5 degrees Celsius of global warming open. More challengingly, we need to execute climate ambitions in an environment where uncertain economic conditions are keeping interest rates elevated, and policy inconsistencies are adding complexity to corporate decision-making.

The urgency to act is emphasised at New York Climate Week. We are glad to see businesses, investors, policymakers, NGOs, and consultancies go beyond celebrating achievements to identify areas of improvement to decarbonise the global economy, mobilise capital to facilitate changes, and deploy policy to speed up a just energy transition. Below we have summarised what we think are the most important takeaways from Climate Week.

 

Decarbonise the value chain not siloed sectors

A very popular phrase used at the New York Climate Week is ‘value chain’. Scope 3 emissions make up the ballpark of most sectors’ total emissions, and companies have realised that decarbonisation needs collective efforts from themselves as well as their suppliers and consumers.

 

Scope 1, 2, and 3 emissions by sector

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For instance, in the steel industry, automotive companies are large end-use consumers. Globally, 12% of the steel produced goes to car manufacturing. To decarbonise, car manufacturer Volvo is collaborating with steelmaker SSAB to expand the production and use of green steel produced from hydrogen. Steel company ArcelorMittal has been partnering with automotive suppliers such as Gestamp and Snop to produce low-carbon steel car parts.

More industries are doing the same. In food and agriculture, Walmart launched ‘Project Gigaton’ aiming to reach a gigaton of avoided emissions through providing resources to support suppliers’ decarbonisation efforts. In petrochemicals, demand for low-carbon plastics from consumer goods and food & beverage companies is driving product innovation.

One commonly mentioned challenge of these initiatives comes from the consumer side, as many companies find it relatively hard to convince consumers to pay a higher price – even slightly – for a product that is ‘done right’. To tackle that, there needs to be more customer communication about a company’s sustainability stance and belief, which can then help enhance brand trust and loyalty. Governments also have a crucial role here to incentivise lower-carbon production and/or customers that purchase those products.