Climate action for business – how supplier contracts, renewable investments and circularity can make a difference

So far this summer, we’ve seen extreme temperatures hit much of Europe, Asia and US, wildfires burn across Greece and Canada, and Italy contending with giant hailstones and ice water flows.

Overall, 2023 could go down as the hottest year since records began. But while much of the world burns, many countries are unwilling to take tougher action to hit climate targets – or indeed, set them in the first place.

To keep global warming to no more than 1.5°C, emissions need to be reduced to net zero by 2050. According to the United Nations (UN), commitments made by governments fall far short of what’s required to hit these reductions. Instead, current national climate plans would lead to an increase of almost 11% in global greenhouse gas emissions by 2030, compared to 2010 levels. 

It’s clear that much more needs to be done to tackle climate change, and leaving it to the countries suffering the worst impacts currently is not the right approach. As Tim Christophersen, Salesforce VP of Climate Action, notes:

Some of the smoke from the Canadian wildfires hit Spain. The world is smaller than most people think when it comes to the impacts, and so everybody definitely needs to do more.

Salesforce is a trailblazer and leader in the space, but even we need to do more over time as we move towards our 50% emission reduction target by 2030.

While there’s not often good news when it comes to climate change, one positive step is there's now a much better understanding of everybody's role and responsibility. Christophersen says:

For the first time that I've been in this for 25 years, it's now much clearer what the government needs to do, what businesses need to do, what citizens can do. We're all starting to reinforce each other instead of passing the blame. It used to be a lot of, you just need to stop taking your car to work, and the government needs to regulate the finance industry, and businesses need to stop greenwashing. That was the discussion for a long time.”

Christophersen has had an international career in sustainability, including spending more than 15 years with the UN Environment Programme, most recently as Head of the Nature for Climate Branch. The ability to do more in the corporate world led him to join Salesforce last year:

We have the Paris Agreement. We now have a global biodiversity agreement. What we need now is the immense speed and scale that the private sector can deliver. There's an enormous peer group mentality. People are always looking at what are our peers and competitors doing in the private sector. Once you get a critical mass moving, that'll be very a fast movement, and that's the social tipping point we're seeing now.

Businesses holding each other accountable over climate action is a trend that’s starting to gain traction. Salesforce has a sustainability element in its contracts, requiring suppliers to have a Paris-aligned climate target and report their emissions, says Christophersen:

That pressure is building up very fast in the private sector, which is a good thing. That will help to put the pressure on efficiency and emission reductions.

Shift

The shift away from fossil fuels to clean energy is another area where the corporate world can make a difference. Salesforce has recently announced funding for 280,000 megawatt hours (MWh) of renewable energy certificates in a bid to increase the supply of clean energy in emerging markets. This will remove 50,000 tonnes of CO2 from the atmosphere every year, equivalent to 113 million miles driven by an average car or 9,000 homes' electricity use for one year. 

Salesforce also has an international renewable energy agreement with The Blue Grass Solar Farm in Australia to take 25% of its output, which matches the electricity used by its operations there.

The solar farm can generate enough electricity to power 80,000 local homes and save more than 320,000 metric tonnes of CO2 emissions each year. It uses advanced technology, including 375,000 bifacial solar panels and half-cut cells, to enhance performance and efficiency.

The fact that renewable energy is now not only a better form of energy than fossil fuels, but is often cheaper, helps make the case for investment easier. But regulatory input could help push more uptake, Christophersen says.

While we need more companies to do more here, I also see a big role still for the regulators. Not everywhere in the world do we have that shift to renewables fast enough.

We are also pushing as Salesforce, as part of our climate policy priorities. We push for stronger renewable energy transitions for example in Japan, which is a bit behind in that transition; for fossil fuel subsidy shifts away from oil, coal and gas and towards renewables; and for better regulation and smarter grids.

Christophersen is taking his own climate action outside of work too, recently putting 20 kilowatts of solar panels on the barn at his farm. This generates enough energy to charge his car, run the dishwasher and washing machine, and on a sunny day, still have six kilowatts of surplus.

But the grid provider doesn't want that power. I can't sell it into the grid because they can't absorb that power when the sun shines and the wind blows. If we had ways to turn that into hydrogen, we could store it in some way. I would love to see solutions for a smart grid that can not only shift that power around better, but also allow for small and big solutions to turn it into a different form of energy that we can use later. That's again a role for the private sector.

As well as investing in solar, Christophersen recently planted 29,000 trees on his farm, funded by a Danish government subsidy. Prior to joining Salesforce, he spent 15 years involved in climate funding and subsidies, and believes there is a lot that governments can achieve by freeing up money from harmful subsidies towards renewables. However, it has to be a fair transition, he advises: 

For example, kerosene for airlines is not taxed, which makes flying a lot cheaper than taking the train. If we shift that and instead give people more incentives for energy efficiency in their homes, that has to be well explained to the public. Otherwise they just see that suddenly their flight and holidays are going to be more expensive. But that money can be shifted and could be put into new technologies and incentives for the private citizen.

Businesses also have their part to play in moving to a circular economy, where recycling and reuse becomes the norm. This is an area where technology can help companies improve sustainability efforts, for example a telecommunications company wanting to make sure all its devices are collected and recycled. Christophersen says:

How do you communicate with customers where to drop it off or how to send it in? How do you visualize the data to show what that saves in terms of rare earth minerals and carbon emissions? That's a data management and a CRM and a Tableau challenge. What we can do for climate action goes beyond Net Zero Cloud as an emission-reporting tool. We want to help customers make sustainability transformation part of their main business with us.

My take

A better model for reuse is ever more pressing: in 2022, we crashed through an unfortunate record for the first time, using more than 100 billion metric tons of resources. Christophersen adds:

We've now pumped so much freshwater out of the ground that the Earth’s axis has shifted by about 80cm, which doesn't sound much, but these are geological shifts. The circular economy is a big part of the solution to that. Right now, we are only reusing about six percent of all the resources we use. We have to invest more in circularity.

While the outlook can seem bleak, Christophersen chooses to remain an optimist about our chances of dealing with climate change:

If you're optimistic about something, you're much more likely to succeed. We have to remain optimistic. It’s not a matter of choice, it's not a matter of the facts. It's a moral obligation.