Biden's First Month in Office: 4 Key Takeaways on Climate Action for U.S. Companies
President Joe Biden has been busy in his first days in office, signing executive orders that set the stage for the environmental and social priorities for the next four years. Among these are several climate-related actions that will have downstream ramifications for companies pursuing renewable energy and carbon neutrality commitments. Here are the top four actions our team of experts is tracking – and their potential impacts on U.S. companies.
1. The Biden administration is serious about tackling the climate crisis at home and abroad
President Biden fulfilled one of his most significant campaign promises on day one by recommitting the United States to the Paris climate agreement – a commitment that will be in force as of February 19, 2021. While mostly a symbolic gesture, the move signals to the rest of the world that the U.S. is reasserting itself as a climate leader. This may spur global competition in emissions reductions and encourage other countries to accelerate their own commitments. (Click here for an in-depth look at this topic).
Beyond reentering Paris, the administration has issued a formal proclamation that climate action is more necessary and urgent than ever, putting the climate crisis at the center of national security decisions, increasing resilience to climate change, and aligning economic practices with a low GHG emissions pathway.
By committing to developing a net zero transition plan, the U.S. comes in line with the direction that many of the largest corporations, federal agencies, and states within the country are already headed. As an example, in 2020, 90% of S&P 500 companies published corporate sustainability reports – an all-time high that signals a shift in the way the private sector and the investor community view the value of sustainability and climate action.
Takeaway for companies:
If legislative activity already underway in the EU for “green recovery” is an indicator of how federal orders will impact corporate sustainability initiatives, the impact on organizations may be significant. It – combined with investor mobilization on climate risk – is almost certain to accelerate existing voluntary momentum. Companies can take proactive steps now to align with national and international positions by developing their own climate action plans.
2. The Administration aims to protect public health and the environment
The federal government will advance its responsibilities to ensure both climate action and environmental justice. Included in this commitment are explicit steps to ensure clean air and water by holding polluters accountable – particularly those that are today predominantly impacting lower-income communities and communities of color. Biden has pledged that communities disproportionately affected by climate change will receive additional federal support for clean air and water infrastructure.
Takeaway for companies:
There is a growing mandate for companies to consider the implications of their actions on underrepresented minorities and the dismantling of oppressive systems, and this will be true of energy and sustainability actions as well. Organizations should anticipate the intersection of social and climate justice to impact their decision-making, with potential brand implications for inaction. Learn more about our predictions on this topic in our trends blog.
