Christiana Figueres and Tom Rivett-Carnac are best known as the principal architects of the 2015 Paris Agreement, which set the framework for reducing emissions in order to avoid catastrophic climate change.
Now, Figueres, the former executive secretary of the UN Framework Convention on Climate Change, and Rivett-Carnac, who served as her senior adviser during the negotiations, have written a compact, practical book on the impact of climate change, and how to take action.
Ahead of the release of that book—The Future We Choose: Surviving the Climate Crisis—on February 25, they spoke to Fortune about why sovereign wealth funds are the next to shift their investing policies; why the Australian bushfires were a “before” and “after” for climate action; and why anyone who says they know exactly how to get to net zero by 2050 is probably “fudging” it.
This conversation has been condensed and edited for clarity.
Much of the book is focused on what individuals can do. What can businesses do? Where should they start?
Rivett-Carnac: This was written certainly for people who have senior positions in companies, but really in their role as citizens. But they can do an enormous amount in their role as leaders to transition their companies to do more. I would say, fundamentally, that involves addressing emissions in their operations and in their supply chain.
And the [other] part for them, as well as for responsible actors in the global economy, is how are [they] engaging with each other and with governments to ensure that they’re using the power they have in the marketplace in order to push the world further and faster to make the change we need to make.
Figueres: I would complement that with two points. One, as Tom rightfully said, [is] companies need to look at their own operations, their products, and their services. But very often the carbon embedded in their products and services is actually not even their own, and actually comes from their supply chain. So to work up and down the value chain, all the way to their suppliers and then all the way down to their customers, is actually a huge opportunity for businesses.
Bottom line: This book is, yes, written for individuals, because it is individuals who read books. It’s not, you know, an ephemeral company that reads the book. But it is geared at individuals in all our roles of life: whether we are an individual person only, whether we’re the head of a family, whether we are the head of a company, of a financial institution, of a country, of a city, of a state. The same applies to all of us, which is the commitment that we all have to make: to do a carbon estimation to figure out what our carbon footprint is—whether that’s your own, or your company’s or your country’s—and put a plan together to be at one-half of wherever you are now. Without condemning, without blaming. That’s just the starting line.
There’s a very strong message [in the book] of why anyone reading it shouldn’t feel hopeless and cynical about climate change, despite the massive challenges that entails. Why did you take that approach?
Figueres: It’s an approach that we’ve had for many years. In fact, in 2010, five years before the Paris agreement, it was fundamental. It was the basic approach that we adopted. And that resulted in a very successful Paris Agreement.
What we’re doing now is we’re saying, it’s time to mobilize that kind of gritty commitment. That [commitment] harvests, honors, and pays tribute to the pain and the despair and the helplessness and the hopelessness that most people feel [about climate change]. We’re not separate from that. We actually also incorporate that pain.
But we also realize that if we put ourselves into a little box, the dark box of pain and grief and helplessness, we’re not going to do anything differently. So we’re saying, let’s harvest the energy that is there, in that pain. You know, specifically the 10 actions at the end [of the book]. But we will only get to those 10 actions, and we will only be effective with those 10 actions, if we actually have a positive, constructive, engaged attitude.
Rivett-Carnac: I would also say that we don’t think of optimism as an outcome from something going well, right? I mean, you can look at the climate issue and say, well, actually, in many ways we’re really struggling to do what we need to do in a timely fashion to get on top of this. But we see optimism as a strategy to transform what needs to happen to where we need to be.
If you look at history, a sense of gritty, realistic, determined optimism actually characterizes many of the transformations. But the outlook was very dark. You look at the end of colonialism, you look at many of the different civil rights movements, the suffragettes’ movement, these were outpourings of optimism and determination, at moments of real darkness. And that’s what made the difference. They weren’t sitting around saying, This is too hard. We can’t do it. They were getting up and doing something about it.
With BlackRock’s commitment [to put climate at the center of its strategy], and a lot of the more explicit net zero commitments that companies are making, is there something different about this year? And what is it, in terms of how companies are looking at and addressing climate change?
Figueres: I think we have something different in the sense that businesses have been waking up to both the risks and the opportunity of climate [change], the risk of unabated climate [change] and the opportunity of addressing [it]. They’ve been waking up to that for quite a few years. What I think is a little bit different this year is the sense of immediacy, and the sense of urgency, because we have two things out there that I think are quite different. Actually, three things that are quite different.
One is the fact that we have much more scientific certainty than we ever did. The publication of the [report on 1.5 degrees Celsius change] on the part of the IPCC [Intergovernmental Panel on Climate Change] in October 2018 brought much more climate granularity to the consequences of not addressing climate in a timely way. And I think businesses paid attention because their business continuity is threatened.
Secondly, we have so many in particular young people on the streets. Businesses are responding to that because not surprisingly businesses know that young people are (a) their future customers and (b) their future employees. And businesses want to be on the right side of the young generation, because the future of those businesses actually depends on the social license, and the support, of the young generation.
The third piece that I think is very different, and I leave it for last because it’s the sad piece, which is [we are seeing] many more impacts of climate change. The Australian bushfires I think are a “before” and an “after” on the understanding of climate change. Australia is perhaps the first and the hardest hit by climate change at that level. But we guarantee it is not the last. And I think businesses are really beginning to understand that we are totally running out of time, that we all together have to make sure that we change the trajectory of emissions by 2030 if we want an economy that is safe, that is stable, and that is secure.
Rivett-Carnac: There’s some really interesting analysis that just came out showing that actually 49% of global GDP is now covered by a net zero by 2050 targets. So this isn’t something which is just emerging. And the 2020s is the decade where we see that accelerate exponentially and halve emissions by 2030.
Figueres: But businesses are ultimately concerned about access to capital, right? And if there is one sector that we think is going to be absolutely fundamental to the exponential transition that we’re going to be seeing this year, it’s the financial sector. You mentioned [BlackRock CEO] Larry Fink’s letter. I think that for asset managers [that is] a huge watershed, but also for asset owners.
When the largest asset manager in the world—$7 trillion is being managed by BlackRock—says, we’re getting out of coal, you can imagine what the impact is on the coal industry. And he said, we’re asking our managers to also be responsible and begin to exit high-risk high-carbon assets, because he wants to avoid the kind of disaster the banking industry [saw] in 2008, which is nothing compared to the financial disaster that we would have if we are not responsible with our climate risks.
The other piece is the [Net-Zero] Asset Owner Alliance, which is a new alliance not of asset managers but of asset owners. That [group] has actually already said, we understand the business risk, and we are committed to mobilizing [and] shifting our capital over to a portfolio that does not get us beyond 1.5 degrees.
We both pointed to BlackRock as a major potential turning point. What’s the next big turning point we might be looking out for in the finance industry when it comes to climate?
Rivett-Carnac: I think there’s a lot, right? And if you look at those, the pace of change—it’s remarkable how quickly this is moving into all elements of the financial system, from insurers to asset owners to asset managers.
Just to pick one that will be transformational, and it’s very likely to move this year, is the involvement of sovereign wealth funds in the Asset Owner Alliance or something similar. So obviously much of the world is owned by national governments [through] their sovereign wealth funds. And as yet they have not aligned the policies around that capital with the policies of their national governments. So you might have, for example, Norway, where the national government has many very progressive targets on climate, but the sovereign wealth fund could certainly go further in divesting capital, in shifting capital. So I think what we may well see is countries beginning to align their sovereign wealth funds with their national policies, and that will be a game changer.
One of the things that has come up when companies are committing to net zero—and I believe BP was the latest interesting example—is companies fully admitting that they don’t know exactly how they’re going to do it. And you make a really interesting argument in the book that not knowing exactly how you’re going to do something isn’t a reason not to do it or isn’t a reason not to get started on that goal. Could you talk about that a little bit?
Figueres: Let’s just begin by taking it to the individual level, because it’s perhaps best understood. So if I decide that I want to go for a doctorate, or that I’m going to run a marathon…more than likely I have no idea of what is involved in that effort. I know that I have a goal that I set for myself, but honestly I think most of us, if not all of us, whenever we set a long-term ambitious goal, we don’t know exactly what is involved. We don’t know what the challenges are going to be. We don’t know what is going to come up.
And yet we have to be able to say, Right, this is my long-term goal, and I am going to mobilize everything that it takes. Yes, there’s going to be challenges. Yes, there’s going to be barriers, but those are actually only very good reasons to try even harder. That’s the attitude that we have to take. Anybody who tells you today that they know exactly how they’re going to get to zero net by 2050 is probably fudging it—because we don’t know. And in fact, some of the technologies to get to zero net by 2050 are still incipient and haven’t come out to market yet. [But] that is not the reason not to set a goal.
Rivett-Carnac: That fact that you don’t know, but you’re going to move forward with competence and optimism and innovation to figure it out, doesn’t mean that you’re loose on transparency, on accountability, on reporting, on being honest, all these other things. You have to complement that sense of direction, and optimism, with some real internal honesty. I mean, I would say it’s great for BP to say that they’re going to be necessary by 2050 and find that they don’t necessarily know how to do it. But they need to have a very rigorous method by which they allow others to see, is it really true? What do you really mean by that? How are you progressing? So that is very important as well, that you have that visibility, the honesty of that, along with the sense of clear direction and vision.
On that question of whether a company’s efforts are truly genuine. You say [in the book] how “few actions are as critical as urgent or as simple as planting trees.” And you also talk about how carbon offsetting has gotten a bad name among some environmental activists as a “pretended benefit.” So how should companies use tree planting as a carbon offsetting tool?
Figueres: The reality is that we have to both reduce emissions and absorb carbon. Both. There is no way that we will get to zero net by 2050 with just the reduction of emissions. That is just mathematically and physically impossible. So we need both activities, and they should go hand in hand with each other.
One thing does not negate the other. The fact that offsets have, very unfortunately, had a very bad name, is really quite tragic—because this is not offsetting a responsibility. This is not substituting something that I’m doing—this is complementary. We have to be able to do both, and only through doing both can we actually get to [net zero].
Christiana, I remember at the Fortune Global Forum in Paris, there was a lot of discussion among CEOs who were working really hard to shift their energy sources, but said they’re frustrated by lack of options to do so, or what they saw as a lack of government support. What kind of advice do you both have for companies that might be moving far ahead on their own policies versus the policies of their national governments or of the countries where they have operations?
Figueres: In so many areas of climate change, the answer to many questions is, “and also, everyone,” right? Because we’ve run out of time, we can’t really choose. So this is not about choosing, Is it a company responsibility to do this or is it a government responsibility?
Obviously, when there is total alignment between federal incentives and policies, down to the province or state or territory, down to cities, down to companies—then you get the most effective and highest impact measures on the part of everyone in the system.
That is not always the case, but there is always space within the boundaries of whatever parts of the system you can actually influence. There’s always space to do more, and there’s always space to lobby, nudge, whatever verb you want to use, towards the higher levels in the system to actually get [them] on board and have the kinds of policies and incentives that are necessary to accelerate this [transition.]
Rivett-Carnac: I’ve walked into many companies where they are exemplary on their climate action, and they say some version of, we’re doing everything we can, and policy needs to go further and faster. And then I’ve said to them some version of, well, did you know that you are actually a member of several trade associations who are still lobbying against more aggressive policy?
They often don’t know, and they haven’t joined the dots on their membership in trade associations that are often more regressive on climate than the companies themselves, and are still defending it. So there are always other parts of their operations that they can look into.
In the book, you hit back pretty strongly on the short term, quarter by quarter business thinking and make the case for what seems to be a very new kind of economic system [compatible with lowering emissions]. What would that economic model look like?
Rivett-Carnac: If you look back to previous times of real transition, and the most obvious one is post–Second World War, there was incredible deep thinking that went on at a “meta” level, around what that next economy should look like to make it fit the purpose to keep the world safe from destructive war.
And that resulted in Bretton Woods institutions. It resulted in a whole range of other different institution building that could create structures whereby the world could then create the next generation of prosperity.
At the moment, we’re failing with deep thinking at a global level around what are the institutions, what are the structures that are needed? And we need much more creativity there. It’s very easy to point to some of the things that are challenging: things like GDP, not properly measuring real progress, et cetera. And we’ve put out in the book some other potential models around things like well-being and other different issues. But I think this needs to be a global endeavor, to really help us transition to a new type of economy that works for everyone.
More must-read stories from Fortune:
—In China, oil won’t be the only energy sector battered by the coronavirus
—Energy emissions plateaued in 2019, as advanced economies gave up coal
—Forget policymakers. Greta Thunberg and her allies are targeting CEOs now
—Looking to cut emissions, Europe eyes a ‘sustainability’ tax on meat
—WATCH: iPod/iPhone designer on kicking plastic addiction
Subscribe to The Loop, a weekly look at the revolutions in energy, tech, and sustainability.
