US companies will now have to cut and measure emissions. How?

US President Joe Biden laid out more details of his climate and clean energy plan yesterday. Now, businesses across the US are anxiously waiting to learn what new requirements they will have to meet, and the steps they will need to take, to successfully report and cut their carbon emissions and other environmental risks.

Electrek‘s Michelle Lewis interviewed Tim Mohin, former chief executive at the Global Reporting Initiative and current chief sustainability officer at Persefoni, an intelligent carbon footprint management and reporting platform, by email, about how the Biden administration could include assistance for small and medium businesses to adopt the tools and capabilities they’ll need to fulfill their requirements to cut and measure emissions.

Because even if companies don’t want to be a part of the solution, they’re going to have to anyway. The trend is going to be toward more regulation, and investors, clients, and the community at large will be watching to see how businesses do their part. The bottom line: It’ll pay off, and it’s nothing to be afraid of.

How US businesses can cut emissions

Electrek: How can businesses overcome their phobia of environmental, social and corporate governance (ESG) regulations, and learn to report accurately and honestly about the steps they are taking to reduce carbon emissions?

Tim Mohin: I’ve actually been incredibly encouraged by the number of companies who have doubled down on their commitments to ESG. Another way to look at it is whether monitoring and managing climate change has more benefits than costs, and all indications are now pointing to a positive return on investment.

Case in point is the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. This effort was an initiative by the Financial Stability Board of the G20 in recognition of the fact that the changing climate presents risks to our economic system. Since the proposal was finalized in 2017, more than 1,500 organizations have supported the TCFD recommendations (a year-over-year increase of more than 85% compared with 2019). The latest status report states that “nearly 60% of the world’s 100 largest public companies support the TCFD, report in line with the TCFD recommendations, or both.”

When I testified at the US Congress’ House Finance Committee in 2019, valid concerns about costs and burden were raised that must be addressed by any new policies. Persefoni AI has developed an enterprise reporting platform (ERP) that makes carbon tracking and reporting more efficient. By automating the data collection, companies will be able to easily manage their carbon footprint and report results. More importantly, this tool will allow companies to avoid risks and grasp opportunities that would not have been visible beforehand.  

Electrek: How can the Biden administration assist small and medium enterprises adapt to renewable energy and energy efficiency in real efforts to reach net zero, not just tick boxes to meet regulation reporting?

TM: It is important that any new policy provides support for small businesses. These companies are often strapped for resources, but with startup assistance, they can begin the process. And once they are tracking their carbon emissions, the potential savings and risk avoidance can be even more significant to accelerate growth and job creation for small businesses.  

Electrek: The fear a number of Americans have of the fight against climate change is loss of jobs and increased taxes. What can be done by both industry and federal and state government to address those fears?

TM: The fear of disruption or losing jobs is justifiable. Regardless of different opinions on climate change policy, the energy sector continues to transform toward cleaner power due to the underlying economics. As with any industrial transformation, it’s wise policy to provide job assistance – such as training or other incentives – to help any workers who may be displaced.

Electrek: What tools and capabilities do companies need to fulfill their sustainability requirements?

TM: The starting point for all companies is to understand their impacts. Large or small, all companies have a value chain. By outlining the steps in the chain, from upstream to downstream, companies can evaluate the most significant impacts from a social and environmental perspective. 

Consultants can be very helpful for companies that are in the early stages. Reporting tools can also accelerate the process. And in the companies I have worked for, there is fairly rapid return as corporate leaders, customers, investors, and employees find value in sustainability progress.

More about Tim Mohin

With more than 20 years’ experience at three Fortune 500 companies – Intel, Apple, and AMD – Mohin has developed strategies to embed sustainability into business.

Mohin also led the development of environmental policy, including the Clean Air Act, within the Environmental Protection Agency and the US Senate. He serves as an ESG advisor to BASF, as well as other companies, and was a founder and chairman of the board for the Responsible Business Alliance.

He is the author of Changing Business from the Inside Out and a frequent speaker and writer on corporate responsibility. Mohin is consistently recognized in the top 20 of Corporate Social Responsibility Influence Leaders.