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CEOs aren’t pulling back on ambitious climate commitments, despite the impending recession: ‘Quite the opposite’

October 5, 2022, 10:05 AM UTC
Updated October 5, 2022, 4:51 PM UTC
Ciemens CEO Barbara Humpton
Barbara Humpton, president and CEO of Siemens, in September 2022, in New York City.
Riccardo Savi—Getty Images for Concordia Summit

Good morning.

I’ve been searching for signs that companies are pulling back from the ambitious climate commitments they made over the past couple of years—given an impending recession, a tightening regulatory environment, and political backlash in the U.S. But I can’t find any such signs, at least among the most climate-forward companies.

When I asked Verizon CEO Hans Vestberg, who participated in a Fortune CEO roundtable on climate yesterday, whether his company was pulling back in the face of headwinds, he responded with a definitive, “No.” Siemens CEO Barbara Humpton answered, “Likewise.” Leon de Bruyn, CEO of privately held Lummus Technology, answered:

“Quite the opposite. At these times, I think innovation is nurtured…We strategically invest at these times to create a competitive advantage, and help our customers serve their customers with a lower carbon footprint.”

Magic Leap CEO Peggy Johnson said climate has become central to the value proposition of the augmented reality headsets she sells:

“It really changed as we moved the technology from a consumer focus into an enterprise focus, that these actually can be a tool to help meet sustainability goals” by eliminating the need for travel.

And Marc Casper, CEO of Thermo Fisher Scientific, put it this way:

“This is very important to our customers, and we’re going to invest in it no matter what the economic cycle is. Because who wants to have left a company that made the world worse at the end of it?”

Sharon Marcil, North American chair of BCG, which partnered with Fortune on yesterday’s virtual event, said her firm’s research shows that climate action is becoming less about corporate responsibility and more about competitive advantage:

“The data show if you are forward-leaning in terms of climate and sustainability, it can accelerate top-line growth; it can lead to medium-term cost savings and also to value creation. And so when we look at climate leaders versus laggers, we see shareholder value creation which is stronger in the climate leaders than in climate laggers.”

The one major sticking point in yesterday’s conversation was around the SEC’s proposed rules holding companies accountable for the so-called Scope 3 emissions of their suppliers and customers. While all agreed it’s critical to get Scope 3 emissions under control, and to have transparent disclosure, the SEC rules were seen by many as a step too far…or at least, premature. Said Genpact CEO Tiger Tyagarajan:

“It’s a real challenge for most of our clients to actually have transparency into the data of their suppliers.”

Sysco CEO Kevin Hourican says his company is meeting with suppliers and telling them they have to have a climate plan. But…

“We’re not going to go so far as to audit how they’re doing it…We think that’s overreach.”

And S&P CEO Douglas Peterson urged the SEC to…

“Take a step back, look at Scope 1 and Scope 2 [emissions directly under the company’s control]. Get it out there. And then we can figure out how to feather in Scope 3.”

Said Vestberg:

“It’s absolutely crucial that corporations like ours are reporting on things that are not only financial. Because ultimately, we are extremely important for society, and we have platforms that stretch out into all corners of our communities. We just need to find a model where we can make progress, rather than doing a revolution and losing sight of the improvements already being made.”

More news below.


Alan Murray
@alansmurray

alan.murray@fortune.com

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This edition of CEO Daily was edited by David Meyer.

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