Search

Decarbonizing the maritime industry will involve a host of clean technologies that complement each other in efficient, economical systems. It also requires stakeholders to replace a transactional business model with a more collaborative one. The U.S. maritime and logistics company, Crowley, illustrates how that can be accomplished.

One small tugboat, one big difference

A look at the Port of San Diego in California illustrates just how many pieces need to come together to reduce maritime emissions. The port includes 34 miles of shoreline that spans the cities of Chula Vista, Coronado, Imperial Beach, National City and San Diego, in addition to public parks and a sprawling maritime industry that hosts trucks, trains, cranes and other logistics equipment, including ships of all kinds.

In terms of fleet size, Crowley’s role in generating carbon emissions in the port might appear to be a small one. The company currently operates two tugboats there: the 4,400-horsepower Tioga and the 4,800-horsepower Scout, both of which are less than 100 feet long.

However, the numbers hide a bigger picture. In terms of emissions per vessel, tugboats can play an outsized role in seaport air quality. That’s because tugboats are almost constantly in motion, traditionally burning diesel fuel all the while. 

As an alternative, Crowley estimates that its eWolf all-electric tugboat will replace 30,000 gallons of diesel fuel with electricity annually when it commences operation in the Port of San Diego next year. Over the span of 10 years, that savings will avoid 178 tons of nitrogen oxide emissions and 2.5 tons of airborne diesel particles, helping to significantly improve local air quality. Crowley also estimates that the eWolf could eliminate approximately 3,100 metric tons of carbon dioxide emissions over a 10-year period. 

The eWolf is currently under construction by the firm Master Boat Builders, with the battery and electric system provided by ABB.

Electrification beyond the boat

Electrifying tugboat transport is part of a broader effort. Crowley says it has taken a holistic approach to watercraft electrification. Instead of simply zeroing out emissions from the boat itself, the company also folded the power supply chain into its decarbonization plans.

“We want to get to ports that are sustainable and off the grid,” Paul Manzi, vice president, Crowley Shipping, told TriplePundit. “It doesn’t do any good to move carbon emissions inland.”

That’s a good point. The U.S. still leans heavily on natural gas and coal for power generation. Fleet operators that can move off-grid, or shift their electricity demand to off-peak hours, can help reduce overall dependence on fossil energy.

Rather than recharging the eWolf’s 6-megawatt battery pack directly from the grid, Crowley plans to recharge the tugboat from a dockside battery installation. The 3-megawatt dockside battery will be recharged during off-peak hours, assisted by a 75-kilowatt solar array. Additional plans include expanding the solar array to 500 kilowatts, enabling the dockside battery to recharge itself off-grid.

That off-grid capability will become increasingly important as other features of the port electrify. In September, for example, the Port of San Diego received a grant for electrical upgrades related to the installation of two new all-electric cranes. The port also signed an agreement with the U.S. Navy, under which the Navy will plug into dockside power sources instead of burning fuel to run their ships’ electrical systems while at anchor.

Collaboration is key

Automakers have already discovered that electrification enables them to collaborate with other stakeholders to offer a full package of energy-related services, in terms of interacting with the grid, with off-grid resources, and with homes and other buildings.

Crowley foresees a similar evolution taking place in the maritime industry. “We are giving you a platform upon which you can grow in port electrification,” Manzi explained. “The maritime industry has been pretty independently competitive, so the big surprise in this whole area is the collaboration in new ways.”

Crowley’s work with Shell is a good example of next-level collaboration. The two companies previously worked together to design, build and operate a new bunker barge to carry liquified natural gas. Under a new memorandum of understanding, the companies will focus more intensively on electrification. That includes the new eWolf charging station at the Port of San Diego, as well as other locations.

“Shell and Crowley are continuing to look more broadly at how they can jointly develop sustainable solutions across the U.S. maritime sector, possibly including lower-emissions vessels and technology at ports across the West, Gulf and East Coast regions and electrification and net-zero solutions at terminals,” Crowley explained in an announcement earlier this year. 

“Shell’s experience and expertise across the energy value chain allows our teams to draw from a deep playbook of integrated maritime solutions, from safe operations to new technology,” Maarten Poort, Shell’s General Manager for Shipping & Maritime in the Americas told TriplePundit. “Shell is working across the entire maritime ecosystem, and with leaders like Crowley, to apply innovative solutions.”

A window into the future

The eWolf incorporates intelligent operations systems that enhance the safety of the vessel and crew and leverage autonomous technology for more efficiency. Manzi adds that it foretells the next generation of technology for how vessels and crews will leverage technological advances for cleaner, more efficient and better shipping and port services, whether it’s the energy source or the control of vessels.

As Manzi notes, sailing and rowing provided maritime power for thousands of years, until steam and diesel took over. That transition lasted only a few decades. The shift to diesel-electric took only a few years. All indications point to another rapid transition within the electrification area.

“As with all our future-focused projects, we’ll continue to explore new, better, and more sustainable ways to create and power our vessels,” Manzi said.  “The methods we use to create the electricity itself, for example, will probably go through several evolutions. We’re creating solutions that aren’t fixed, but flexible.”  

This article series is sponsored by Crowley and produced by the TriplePundit editorial team.

Image courtesy of Crowley

U.S. employees would rather work for a company that has a positive impact, even if it means reduced pay. New research from Paul Polman, former CEO of Unilever, shows that while pay and benefits are important, they are not the only factors that talent considers when choosing where to work. 

Almost 90 percent of workers consider their employers’ values, and about 75 percent specifically consider a company’s commitment to the environment and social equality. Even as Americans face an inflationary crisis, the majority are worried about the future of the planet and society. Sixty-six percent of all workers — including 71 percent of Gen Z and millennials — reported this concern, compared to 36 percent who said they’re worried about paying their bills. 

The Great Resignation continues, finds new research from Paul Polman

Many experts expected the “Great Resignation” to largely disappear as the economy slowed down in 2022. However, despite inflationary concerns and economic anxiety, workers are continuing to resign in near-record numbers. Polman’s research suggests that one of the leading drivers behind these resignations could be the lack of alignment between employer and employee values. 

“Times have changed and employees no longer want outdated corporate social responsibility initiatives and a lack of action,” Paul Polman said in a statement. “Unsatisfied and unmotivated employees recognize the power is in the hands of the CEOs. They want to work for companies which work to tackle the world’s greatest challenges, and they want to play their part. Or they’ll leave.” 

Polman encouraged CEOs to embrace and examine the link between employee job satisfaction and their companies’ environmental and social impacts. While pay, benefits and work-life balance are key considerations that employees do take into account when evaluating job prospects, company values are not far behind, according to Polman. 

Over a third of workers have already resigned from a position due to their employers’ values misaligning with their own, while another third reported that they were willing to take a pay cut in order to work for a company that shares their environmental and social values. That number rose to nearly half among Gen Z and millennial respondents.

How employees are feeling 

Over 75 percent of U.S. workers want to work for companies that have a positive impact on the world, but the majority of workers believe that businesses’ current social and environmental initiatives are not good enough. According to Polman’s research, Gen Z and millennials are even more likely to believe that the companies they work for should help solve environmental and social challenges. 

“Anxiety is on the rise in my generation; we’ve inherited a climate crisis, broken political systems, and increasing social polarization. We’re tired of greenwashing and empty commitments," said Clover Hogan, a climate activist and the founder of Force of Nature. "Counter to the image painted of Gen Z, we don’t want beanbags and table tennis in the office; we want to work for organizations that reflect our values. CEOs who fail to see this, and take action, will be left behind."

Yet more than a third of Gen Z and millennial participants reported that their CEOs and senior leadership teams did not care enough about the environment or social issues. 

What can CEOs do? 

Sustainability and social programs are key components when it comes to workplace satisfaction and engagement for Gen Z and millennial workers. But workplace engagement levels are tanking as employee stress is reaching an all-time high. At the same time, over two-thirds of Gen Z and millennial employees reported wanting to play a greater role in helping their company change for the better. Therefore, CEOs must entirely rethink talent attraction, as well as employee satisfaction, engagement and retention. Companies should also be transparent about their sustainability initiatives and invite employees to be a part of the solution.  

“Any CEO who thinks they will win the talent wars by offering a bit more money, some extra home-working and a gym membership is going to be disappointed. An era of conscious quitting is on the way,” Paul Polman said.

The former CEO’s research demonstrates how forward-thinking companies can turn this crisis into an opportunity as workers leave employers that lack environmental and social ambition. While a company’s commitment to values cannot completely make up for uncompetitive pay, it can help attract talent and improve employee engagement through the development of robust sustainability programs that encourage and empower employees to participate. In this way, improving the planet can also improve a company’s bottom line.

Image credit: Ian Schneider/Unsplash 

Tesla CEO Elon Musk issued a withering criticism of the corporate environment, social and governance movement last May after S&P Global booted the company from its ESG Index. The downgrade is a stain on the reputation of an automaker that has fashioned its brand around sustainability, and Musk’s antics on Twitter are not helping.

Misdirection on the S&P 500 ESG Index

Musk deployed his personal Twitter account to complain about the updated S&P ESG Index. “Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list!” he tweeted on May 18, 2022.

That was an apparent reference to an S&P Dow Jones blog post published a day earlier that explained the methodology behind the update. There is actually no such thing as an overall “top ten” ESG rating in the Index, but the post did include a chart that listed the 10 largest companies by their market capitalization. The list included Exxon at the No. 9 spot.

If Musk was referring to that chart, he clearly mistook what it represents. It is not a “top 10 best in the world” list, as Musk implied. It is simply a list of the 10 largest companies.

Whether or not the mistake was deliberate, it was misleading. ESG ratings compare companies to their peer groups, not to a random assortment of other industries.

As the S&P blog explained, Tesla did not make the cut because it did not meet the bar set by other companies in its own industry.
“Tesla was ineligible for index inclusion due to its low S&P DJI ESG Score, which fell in the bottom 25 percent of its global GICS industry group peers,” wrote Margaret Dorn, senior director and head of ESG indices for S&P Dow Jones in North America. 

In the same tweet, Musk also deflected attention from the concrete, bottom-line reasons for leaving Tesla off the Index. “ESG is a scam. It has been weaponized by phony social justice warriors,” Musk wrote, even though Dorn described two specific areas of risk exposure, in addition to Tesla’s underperformance relative to its auto industry peers.

The Twitter factor, part 1

One factor Dorn did not bring up was the potential for Musk’s personal behavior to contribute to perceptions of risk at Tesla. 

Musk has long cultivated a reputation as the planet-saving, visionary CEO of Tesla, but the seams have been showing in recent years. At the outset of the COVID-19 pandemic, for example, Musk deployed his personal Twitter account to align himself with former President Donald Trump’s misdirection on handling the crisis, while also raising doubts about vaccine safety.

After Trump left office, Musk further aligned himself with right-wing politics. He deployed Twitter to criticize and insult President Joe Biden on a regular basis, at one point calling him a “damp sock puppet in human form.” Musk also cheered for the “trucker convoy” that disrupted the Canadian government and bottlenecked key international crossings last winter, even as the Biden administration was struggling to rally Canada and other NATO members against the rising threat of a Russian invasion of Ukraine.

Musk continued to pour gasoline on the international fire last fall when he suggested that Ukraine should cede part of its territory to Russia. More recently, he set off an uproar when his SpaceX company abruptly stopped Ukraine from using the Starlink communications network to operate drones.

The Twitter factor, part 2

Musk’s partisan political activity came into full focus last fall. He completed his acquisition of Twitter just days before the 2022 midterm elections, then used the platform to advocate for Republican candidates.

The Twitter acquisition coincided with a steep drop in the value of Tesla stock in 2022 — reportedly culminating in a loss of $700 billion, 65 percent of its value, over the course of the year.

Though bottom-line factors contributed to the crash, Musk’s actions as head of Twitter also raised questions about the state of his executive skills. His reputation for cultivating right-wing extremists and vaccine disinformation sent advertisers running for the doors, and his elimination of content moderation teams led to a reported increase in anti-LGBTQ+ rhetoric on the site. His promotion of the “Twitter files” also contributed to an environment rich in conspiracy theories.

More bad news for Tesla

All things being equal, none of the goings-on at Twitter would necessarily impact investor interest in Tesla. In fact, so far in 2023 the company’s stock has recovered some of its dramatic losses from the previous year.

However, attracting U.S. car buyers is a different matter. Last November, S&P forecast that Tesla’s share of new vehicle registrations in the U.S. would shrink from its current level of 65 percent down to 20 percent by 2025. S&P attributed the drop to competition from industry peers.

With EV sales increasing overall, Tesla could make up in volume what it loses in market share. However, the company’s high profile makes it a target for bad news, potentially turning off consumers. A recall of the self-driving software on 362,000 Tesla vehicles in the U.S. made headlines last week, as did an accusation of union-busting at the company’s Autopilot plant in Buffalo.

In past years, brand surveys have indicated that most car shoppers ignore Elon Musk. They buy a Tesla because of its reputation for quality. However, that narrative may change when other automakers establish firmer reputations of their own in the EV market. 

The growing demand for pickup trucks is one indicator that the storyline is shifting. Legacy automakers have a long head start in that market, and Ford in particular has demonstrated that brand recognition can stimulate sales of new electric pickup trucks.

Tesla had an opportunity to beat other automakers to the electric pickup truck punch several years ago, but its much-delayed Cybertruck pickup has yet to go into production. Industry observers have also taken note of cost and safety issues related to the decision to use stainless steel instead of standard automotive steel. 

Ten years ago, electric cars were new to the mass market and Tesla practically had the field to itself. Now, the company and its CEO need to adjust to the realities of today’s auto industry. Treating ESG considerations seriously would be a good place to start. 

Image credit: Edgar/Unsplash

A new program in Chicago will distribute $500 per month to 5,000 of the city’s residents for the next year. The Resilient Communities Pilot is the largest of a number of guaranteed income initiatives that are being tested in cities across the U.S. The goal: Relieve extreme poverty.

The pilots’ success could help ignite grassroots calls for a universal basic income (UBI). Of course, any failures or complications would likely be used as fodder for conservative ire. Still, politicians of all ilk would be wise to consider cash payments. And not just as a remedy for current poverty, but also within the framework of the inevitable robot revolution and the resulting transition to a world of work that looks drastically different from what it does today.

The rising popularity of guaranteed income

The Resilient Communities Pilot isn’t the only one of its kind in the Chicago area — the county began dispersing $500 checks to 3,250 different suburban households last month. Cook County’s program will last for two years.

In fact, guaranteed income has become a hot topic in local politics thanks to the COVID-19 pandemic, with the number of city-run pilot programs in the U.S. increasing from just 11 in 2021 to 82 in 2022. The city of Los Angeles is running its own guaranteed income program, with 3,200 participants receiving $1,000 each month for 12 months. Quite a few Californian cities have implemented cash programs worth $500 a month, including San Diego, Stockton and Oakland.

The state of Colorado has made its version of a guaranteed income program permanent — with two payments of $1,000 available to workers who lose their jobs, regardless of their immigration status.

Universal basic income in the unlikeliest of places

Unbeknownst to most Americans, there is one state in the union with a universal basic income — and it’s a red one. Ironic as it might seem, the state of Alaska has been supplying its residents with annual no-strings lump sums for four decades. The Alaska Permanent Fund pays residents out of the state’s oil revenue, so the amount varies from year to year. 

Conservative arguments against a universal basic income generally rest on the idea that any kind of cash grant encourages people not to work. Yet the Alaskan example demonstrates otherwise, with the state’s overall labor force participation unaffected by the payments, according to research from the University of Chicago and the University of Pennsylvania. 

Instead, the Alaska Permanent Fund has shown how any subsidy given to the people is also ultimately a subsidy for businesses, as recipients inevitably put that money right back into the local community.

It’s about outcomes

The notion that monthly payments amounting to less than what many CEOs make per hour could encourage people to quit their jobs and live the high life on government cash is simply ridiculous. Instead, worldwide trials in universal basic income have consistently shown positive outcomes for school attendance as well as better health, without any negative effect on adult employment. It did, however, free children from the premature burden of working to support their families.

“The reasons interest in these programs is on the rise may come down to three things: inequality, automation and issues with existing safety net programs,” Carmelo Barbaro, executive director of the Inclusive Economy Lab at the University of Chicago, told the school’s newspaper. Barbaro will evaluate Chicago’s Resilient Communities Pilot in order to determine its impact on participants and suggest improvements.

As inequality increases along with prices and inflation, there is a rising sentiment that “some other approach beyond just asking people to work is necessary to have a more inclusive society, where people can really lead lives of meaning and fully participate," Barbaro told the paper. "There’s also just the recognition that a lot of people who work are struggling to make ends meet.”

Preparing for the future of work

“The idea also has received additional cachet recently through the belief that the pace of automation is going to increase in the coming years and that a lot of economic dislocation will occur until people retrain or find other forms of work,” Barbaro explained. “Some believe that additional support in the form of unrestricted cash could ease the transition.”

Advances in artificial intelligence have made it clear that the nature of work as we know it is about to go through a dramatic change. No one can say for sure how that change will alter the total number of jobs available or whether all workers will be able to transition. If scaled to its potential, universal basic income could act as a stopgap and prevent a lot of unnecessary suffering.

Image credit: Christopher Alvarenga and Muzammil Soorma via Unsplash

The high cost of lithium-ion batteries is one of the obstacles standing between electric vehicles (EVs) and the mass market. Supply chain issues can raise that barrier even higher. Fortunately, innovative new energy storage formulas that solve both problems are beginning to emerge — and Ford Motor Co. is among the automakers ready to jump on the opportunity.

Ford and the EV battery of tomorrow, today

The typical lithium-ion EV battery deploys a cathode made with nickel, cobalt and manganese (NCM). These materials provide a longer range and faster charging speeds. On the downside, conventional EV batteries can be susceptible to overheating and fire. The global supply of nickel and cobalt comes primarily from Russia and the Democratic Republic of the Congo, making it fraught with human rights abuses as well.

Researchers have been working on an alternative cathode based on a lithium-iron-phosphate formula — also known as an LFP, the acronym for the chemicals that are involved in its production. These batteries are more stable and less costly than the NCM formula, but they fall short on energy density. That means LFP batteries take up more space to deliver the same range. Finding the right balance between size and range has been one of the challenges holding LFP batteries back from competing with the NCM formula.

Nevertheless, those challenges seem to have been met. Tesla introduced the LFP formula to its U.S. lineup last year, and now Ford is following suit.

Ford announced on Monday that it will build a new $3.5 billion EV battery factory in Michigan dedicated exclusively to manufacturing LFP batteries. “This plant — called BlueOval Battery Park Michigan — initially will employ 2,500 people when production of LFP batteries begins in 2026,” Ford said in a statement.

The new EV battery won’t replace conventional batteries in all Ford electric vehicles — at least not yet. The automaker says it will continue to utilize the NCM formula as part of its strategy to sell 2 million electric vehicles worldwide by the end of 2026.

“As the company rapidly scales EV production, introducing LFP batteries allows Ford to produce more electric vehicles and offer more choices to new EV customers,” the company explained.

“Ford’s electric vehicle lineup has generated huge demand," Jim Farley, president and CEO of Ford, added in a statement. "To get as many Ford EVs to customers as possible, we’re the first automaker to commit to build both NCM [nickel-cobalt-manganese] and LFP batteries in the United States."

A big EV battery win for Democratic lawmakers

Ford credited the Inflation Reduction Act of 2022 with maximizing the savings for electric vehicle buyers in its press announcement for  the new EV battery plant. It was left unsaid that Congressional support for the bill came solely from members of the Democratic caucus. In fact, it received a thumbs-down from every Republican in both the House and Senate.

If the bill were to come up for a vote this year, it would die in the House — thanks to the slim majority Republicans picked up in the 2022 midterm elections. Fortunately, the Inflation Reduction Act came up for a vote last year when there were more Democrats than Republicans in both Houses of Congress. 

Ford also credited the Inflation Reduction Act with reducing EV battery costs. For the automaker's part, the new LFP battery is less expensive to manufacture, and the Michigan location will save on shipping and import costs. “Building in Michigan, Ford will benefit from the Inflation Reduction Act — creating one of the lowest-cost U.S.-produced batteries when the plant comes online in 2026,” Ford stated.“LFP batteries are very durable and tolerate more frequent and faster charging while using fewer high-demand, high-cost materials” 

Global connections persist in domestic manufacturing

Although Ford will manufacture the new EV battery in the U.S. through a wholly owned subsidiary, the new factory is still closely entwined with overseas energy storage innovators. Leading Chinese battery innovator CATL (Contemporary Amperex Technology Co., Ltd.) will provide the EV battery technology and services.

Ford’s collaboration with CATL comes after agreements with other overseas battery manufacturers, including the two Korean firms SK On and LG Energy Solution.

Let’s hear it for ESG

In addition to affirming its support for the Inflation Reduction Act, Ford also took a swipe at foes of the corporate ESG (environmental, social and governance) movement. The company noted that the LFP formula is “in line with Ford’s work to create an EV supply chain that upholds its commitments to sustainability and human rights.”

In that context, it is interesting to note that Virginia was also in the running for Ford’s new EV battery factory. However, the Republican governor of Virginia, Glenn Youngkin, took credit for halting the effort last December.

“Youngkin told reporters in a gaggle following his State of the Commonwealth address last week that his administration ‘felt that the right thing to do was to not recruit Ford as a front for China to America,’” Center Square, a state-level news organization, reported last month.

“Chinese influence in the U.S. has become an increasingly popular talking point among GOP political leaders, including Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott, who are both considered potential candidates for the Republican presidential nomination,” news outlet Virginia Business observed, implying that Youngkin also has his sights set on the 2024 election cycle.

Youngkin’s objections ring hollow, however, considering his track record of doing business with China in the private sector. In 2021, the Associated Press reported that Youngkin had “amassed a personal fortune estimated at more than $300 million as a senior executive at the giant private equity firm known as the Carlyle Group.”

“As an executive at the private-equity firm the Carlyle Group, Glenn Youngkin oversaw investments that moved thousands of American jobs offshore,” added the Communications Workers of America (CWA), a labor union dedicated to media and communications workers. “With Youngkin at the helm, the Carlyle Group bought a controlling stake in a call-center outsourcing company based in China called VXI Global Solutions.”

According to CWA, that outsourcing company displaced U.S. jobs when it staffed a call center for AT&T in the Philippines⸺ which could explain why the opportunity to gain thousands of jobs from Ford failed to register with Youngkin. 

Meanwhile, Virginia taxpayers have spent 15 years and $200 million to ready a potential site for industrial development ⸺ but now, it sits vacant, reports the Richmond Times-Dispatch. Ford’s $3.5 billion EV battery plant would have created an estimated 2,500 jobs in an area that has been described as “one of the poorest” in the state. 

The Inflation Reduction Act, which aims to create new manufacturing jobs, is showing promising results considering how early on it is in its inception. However, with the 2024 presidential election cycle already heating up, states with high-profile Republican politicians like Gov. Youngkin are at risk of letting the opportunity pass them by.  

Images courtesy of Ford Motor Co. 

It’s almost time for the grand reveal. While the final product is still a bit of a mystery, the anticipation has the business world anxiously awaiting the news.  

The U.S. Securities and Exchange Commission (SEC) is expected to make a big announcement in April, and if we’re lucky, it will be the full release of its climate disclosure rules. Either way, publicly-traded companies in the U.S. should be preparing to report on the climate metrics that are soon to become mandatory.

What are the incoming climate disclosure rules?

We are in the midst of a climate crisis, and the rules that dictate how businesses and governments operate are changing. The EU already has a climate disclosure system in place for its largest companies — which is being upgraded next year to include more companies and more thorough reporting. The U.S. is following the EU’s lead with the new SEC climate disclosure rules.

The mandatory disclosures are expected to include a company's carbon emissions, low-carbon transition plans and climate risks. Climate risk is separated into physical and transition risks: Physical risks are climate hazards like drought, flood and extreme heat, whereas transition risks cover the policy changes with which organizations must comply.

While businesses have yet to be shown the final climate disclosure rules from the SEC, there are measures they can take to hit the ground running when the rules are revealed. 

What can companies do to prepare?

“It’s really about being prepared for Scope 3 [GHG emissions] and ensuring that all of the data you are disclosing is traceable and auditable,” says William Theisen, CEO of EcoAct North America.

Scope 3 GHG emissions cover the emissions produced across an organization’s entire value chain, both upstream and downstream. Depending on the size of the business, this can include hundreds or thousands of different companies, from raw material suppliers to distribution partners. It’s an overwhelming task, but it’s much more manageable if taken one step at a time.

“The first step is to do a materiality assessment and get at least an idea of where you should focus first,” Theisen says. “Look at the products and services within your supply chain, and then transform them using an emission factor to equate it to a tonnage of carbon. It won’t be completely accurate, but it will at least give you an idea of areas to dive into and get more granular data.”

Organizations that want to have some idea of what the SEC reporting may look like can explore the current CDP global disclosure system. “As a supplier or publicly- traded company looking to get your bearings on what requirements are probably going to be important, CDP is a good place to start," Theisen suggests.

Part of the SEC disclosure requirements will include climate risk. While it can be difficult to evaluate how vulnerable business assets are to climate risk — with much of it open to interpretation — honesty and transparency is the best policy, Theisen advises. Trying to downplay climate risk is how a business can get burned.

“It’s the quality of their disclosure. If they understand what the climate risks are and they’re addressing them, that can actually play in a company’s favor,” he explains. “It’s when a company is not disclosing any climate risk that the assumption then is that maybe they don’t know what’s happening — maybe they’re not putting in mitigation measures.”

“Investors and external stakeholders really just want to understand that this is being appropriately managed, that there is a roadmap, and that the roadmap can evolve,” Theisen says. “We’re all adapting to climate change year after year."

Enlisting climate consultants can help businesses develop strategies for their climate disclosures. This demonstrates to investors that leadership understands the risks associated with climate change and are engaging in methods to mitigate their exposure. 

Image credit: RF._.studio/Pexels