Latest research highlights the impact of just 1.5% of profits from the world’s largest companies on nature, people, and the climate.
Today, Climate Impact Partners, experts in the voluntary carbon market for over 25 years, released new data aligning with Earth Day’s 2023 theme ‘Invest in Our Planet’ showing the potential impact if the world’s largest companies invested 1.5% of profits across a range of carbon financed projects.
The Fortune Global 500 made over $2.2 trillion in annual profits, on average over the last three years. Climate Impact Partners’ new data reveals that investing 1.5% of this, roughly $33.5 billion, in a portfolio of strategies including forest conservation, reforestation, clean cooking, and micro renewables could:
- Reduce 2.6+ billion tonnes of carbon emissions - the annual emission of India
- Improve 1.1 billion lives - the populations of Europe and the USA combined
- Protect 40+ million hectares of forest - equivalent to the size of Japan
The calculation reveals the potential scale of impact that is possible by channelling private sector finance to fund carbon reduction projects – with the voluntary carbon market just one of the existing mechanisms available to achieve this.
While internal carbon reductions, which may take years to implement, remain a non-negotiable, companies must also support the solutions driving the transition to a low-carbon economy today - closing the gap between governments’ commitments to reduce global greenhouse gas emissions and the reductions required to keep global warming below 1.5 degrees. For example, the IPCC has calculated that two of the most impactful solutions to rapidly reduce emissions by 2030 are stopping the destruction of forests and other wild places and restoring degraded forests.
“Leaders often talk of the desire to leave a legacy – what greater legacy could there be than ensuring the future of the planet? Now is the time to act with urgency and invest in the solutions available today that will enable us to meet our climate goals,” said Sheri Hickock, Chief Executive Officer of Climate Impact Partners.
“The IPCC report highlighted the need to scale tools that both reduce or avoid emissions, whilst conserving and restoring biodiversity and supporting sustainable development for the communities most impacted by climate change, yet least responsible. Funding carbon reduction projects - ranging from forest conservation projects that provide training on sustainable land management and biodiversity conservation, to developing community-scale solar power solutions for businesses and households–all help to achieve this.”
Compared with other costs, 1.5% is a fraction of the average amount spent on other critical business priorities – for example, some companies spend 12% on Research and Development.
“The cost of inaction will be greater – financially, reputationally, competitively and environmentally. We hope that companies look at these calculations and realize the potential impact they can have through investing in the planet,” added Hickok.
Climate Impact Partners tracks the climate commitments of the Fortune Global 500. The latest report states that climate ambitions among the world’s largest companies are waning – almost 60% have not delivered or set a meaningful 2030 climate goal and those that have made commitments in the last year are more likely to target 2050 milestones.
View the full data and methodology here
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