The Leadership Circle Executive Summary highlights Ceres' strategies, impacts, and priorities for the coming year. It includes an overview and three program deep dives.
2023
Leadership Circle Executive Summary
Introduction by Mindy Lubber
Last year will be remembered as the beginning of the end of the fossil fuel era. Three powerful signals in the last three months of 2023 underscore this turning point. For the first time, the final agreement at COP28 explicitly commits the world to “transitioning away from fossil fuels.” A pair of landmark corporate climate disclosure laws in California herald a new age of measuring and managing climate risk. And the largest U.S. pension fund, CalPERS, is lighting the path forward with their historic commitment to invest $100 billion in climate solutions by 2030. But let’s not kid ourselves, optimism and consensus are in short supply. This is also a year that will be noted for climate change setbacks along with record-breaking temperatures and natural disasters. On the global stage, rising oil and gas production coupled with terrifying conflicts in Ukraine and the Middle East are cause for alarm. Here in the U.S., partisan gridlock is stalling progress and the fossil fuel industry-funded anti-ESG efforts have chilled private sector leadership. So why am I hopeful? In a word, community .
PHOTO PENDING
In November 2019, 132 Ceres staff gathered in Boston. This year’s all staff gathering will include 209 staff.
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2023 Leadership Circle Executive Summary | 2
I also take comfort from our community in the face of a cynical new tradition. In advance of both the New Year’s and Fourth of July weekends in 2023, Ceres received massive document requests from Representative Jim Jordan, the Republican chair of the House Finance Committee, designed as much to intimidate us and slow progress as anything else. Rather than demoralize me, it energizes me. Despite all the efforts to make this a national issue, it’s falling flat. Of the 165 pieces of anti-responsible investing legislation that were introduced in 37 states, only 22 passed. And the 8 federal bills introduced didn’t go anywhere either. This is yet another signal of our success and the climate movement’s inevitability. This is truly the beginning of the end of the fossil fuel era. It is an honor to share this annual Ceres Leadership Circle Executive Summary with you and our family of leading supporters. It highlights our strategies and accomplishments and offers a vision of our priorities in the coming year. Thank you for being a part of the Ceres family. We are all grateful for your support and commitment to building a more just and sustainable world. Onward and upward.
The community advocating for bold climate action is growing by leaps and bounds. I hear it in a call with the CEO of a major bank set to release a comprehensive net zero transition plan that goes much further than any of its competitors, and also in conversations
Our climate-smart community is committed and resilient. Despite the whiplash that accompanies transformation of this magnitude, we are unstoppable.
in boardrooms and C-suites across the country. I see it in states rejecting legislation that limits factoring climate risk into investment decisions, and also in the hundreds of billions of dollars in clean energy investments the Inflation Reduction Act unleashed. I experience
it in major moments like Climate Week and COP. I feel it every day as I engage with our network members and staff. And I recognize it in your support and vote of confidence in our work.
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Our Mission
Ceres is transforming the economy to build a just and sustainable future.
Our Impacts
Advancing climate solutions
Protecting global water resources
Building a just and inclusive economy
Accelerating sustainable capital markets
Protecting and restoring life on land
Advocating for smart public policy
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2023 Highlights
Agriculture Advocacy
Landmark Legislation Ceres mobilized nearly 30 companies—including Apple, Microsoft, and IKEA—to support game- changing climate disclosure legislation in California. Now, 10,000 companies doing business in the state (73% of the Fortune 1000) will report on emissions and the climate risks they face. Ceres was a co-sponsor of the bills, reflecting more than two decades of climate disclosure advocacy.
View from the Top In September, U.S. Treasury Secretary Janet Yellen unveiled new principles for financial institutions—informed by Ceres’ recommendations—to reach their net zero goals. Crucially, the principles direct businesses to make detailed plans with specific actions, measurements, and deadlines to achieve those goals.
Ceres mobilized business support to help pass a 2023 Farm Bill extension. Ceres also organized members of its Climate Agriculture and Healthy Soils Working Group to advocate for their Farm Bill priorities to create a more resilient agricultural supply chain.
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Ceres Leadership Awards
2023 Highlights
Unprecedented Federal Investment The Inflation Reduction Act helped unleash nearly $278 billion in private clean energy investment across the U.S., create more than 170,000 jobs, and start 272 clean energy projects. Ceres mobilized investors and companies in support of this landmark legislation and is focused on accelerating its implementation.
Historic Climate Finance Commitment Building on 35 years of partnership with Ceres, CalPERS, the nation’s largest public pension fund, announced plans to invest $100 billion in climate solutions by 2030. Their commitment marks a fundamental shift between the market’s past and its future.
Champion of Energy Efficiency in Industry Awards, Energy Policy Category
Alli Gold Roberts Senior Director, State Policy
NEWIEE DEI Founders’ Award
Donna Daniels Chief People and Diversity Officer
Barron’s Magazine 100 Most Influential Women in U.S. Finance 2023
Mindy Lubber CEO and President
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Driving Outcomes: Strategic Leverage
Our Strategic Advantage
Ceres has built strong relationships and trust over three decades with influential marketplace actors.
Policy Advocacy ↗
↖ Campaigns
Ceres provides cutting-edge thought leadership and unparalleled expertise organizing powerful stakeholders.
Our Strategic Balance
Ceres’ position in the nonprofit landscape
Ceres integrates three key levers— investor action, corporate action, and policy action — to generate outsized impact.
Ceres takes an inside strategy — working as both a respected ally and a blunt activist—to drive private sector change.
↙ Science-based
Business-focused ↘
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Driving Outcomes: Analysis
Ceres published 24 reports and 72 columns and blogs in 2023.
April 2023
May 2023
U.S. Banks and the Road to Net Zero Analyzing the 2030 Oil and Gas Targets of the Six Largest U.S. Banks
Sustainable Finance Opportunities A Guide for Financial Institutions November 2023
Assessing Corporate Action on Deforestation Amid Growing Regulatory Risk November 2023
Inclusive Insurance for Climate-Related Disasters A Roadmap for the United States
Tackling Transferred Emissions
Data as the Key Essential Steps for Decarbonizing Private Equity
Net Zero Standard for North American Banks July 2023
Climate Principles for Oil and Gas Mergers and Acquisitions
Introduction Achieving global climate goals will require significant shifts in bank activity, as part of broader action by governments and the private sector globally. To tackle the climate risks they face and reap the opportunities of a low-carbon economy, many of the world’s largest banks have committed to net zero portfolios by 2050 or sooner. And they have increasingly backed up their goals with interim targets for reducing emissions in key sectors by 2030, when global emissions must by slashed by half to avoid the most severe impacts of the climate crisis. Front and center are the targets that the banks have set for the emissions of the companies and projects that they finance in the oil and gas industry. Unlike companies that generate emissions from their own operations, most of a bank’s climate impact is indirect , resulting from corporate activities that are financed by the banks through products and services including loans, investments, and derivatives. These financed and facilitated emissions 1 are a key element of banks’ decarbonization strategies, informing capital allocation decisions and management policies, although it’s important to note they are not a perfect proxy for real-world emissions. With seven years to go in this pivotal decade, Ceres and TPI Centre analyzed these critical carbon emission reduction targets that the largest six banks have established for the oil and gas sector. These targets are increasingly being compared to each other, often in simplistic ways. While our analysis is not perfect, we believe it is the most comprehensive comparison possible, given existing disclosures. We find that none of the six banks’ oil and gas targets are aligned with a 2030 pathway that achieves the goals of the Paris Agreement to limit warming to 1.5°C by mid-century. Our assessment of these targets provides insight into how the banks can improve their target-setting practices and accelerate emissions reductions in the real economy.
January 2023
Climate Transition Plans in the U.S. Food Sector Addressing Risks to Farmers and Farmworkers January 2023
1 For brevity throughout this paper, we may refer to financed and facilitated emissions as financed emissions; however, in most instances we are referring to both. The only exceptions are when we are discussing individual banks who may only disclose financed emissions and omit facilitated emissions.
Tackling Transferred Emissions: Climate Principles for Oil and Gas Mergers and Acquisitions
1
1 | U.S. Banks and the Road to Net Zero: Analyzing the 2030 Oil and Gas Targets of the Six Largest U.S. Banks
ceres.org
March 2023
August 2023
Hot and Cold How Asset Managers Voted on Climate-Related Shareholder Proposals in 2022, and What It Means for 2023
Development of a Company‑Level Cost‑Benefit Analysis Framework Assessing the Full Value of Water Stewardship Investments to Business and Society
An Investor Guide to the Climate Principles for Oil and Gas Mergers and Acquisitions
Electric Vehicle Batteries A Guidebook for Responsible Corporate Engagement Throughout the Supply Chain
How to engage oil and gas companies and banks on transferred emissions
As the 2023 proxy season approaches, clues of what to expect can be found in the 2022 trends. Last year, the number of climate-related proposals filed jumped a record-breaking 60% to 241 and—even more importantly—the number of corporations making commitments to shareholders in exchange for withdrawal of proposals prior to voting surged 62% to 115, according to a Ceres analysis. The combination of these company commitments, along with 18 climate-related proposals that won a majority of shareholders’ votes, means that shareholders prevailed in more than half of their climate engagements with companies they own last year.
Introduction With the world’s water supply in crisis, companies are increasingly recognizing the threats that they face from too little water, too much water, or polluted water, and how climate change is compounding these threats. Yet, there is a two-way interaction between the private sector and freshwater— industry affects water resources just as water resources affect industry . Research and companies’ disclosures underscore the financial impacts that companies are already experiencing or are exposed to, and the impacts industry’s practices are causing for society. With the launch of the Valuing Water Finance Initiative , a global investor-led effort to engage companies with a high water footprint to value and act on water as a financial risk, Ceres in 2021 partnered with water risk consultant Bluerisk, sustainability intelligence provider S&P Global Sustainable1, and the asset manager DWS Group to develop two materiality briefs to estimate the cost of addressing water-related externalities in the value chains. These briefs, which focus on eight apparel companies and three meat companies provide insights into the potential magnitude of the cost of action to address water-related externalities and how those costs would impact company valuations. Since then, engagements with financial institutions, investors, and companies have underscored the need to go one step further to estimate not only the cost to address externalities, but also the cost of solutions to address emerging water risks, as well as the magnitude of business and societal benefits that could be achieved from companies investing in water stewardship. This brief introduces a framework to estimate both costs and benefits of engaging in water stewardship, enabling companies and investors to gain a more complete financial picture, better understand the full value of water, and prioritize action where it matters the most: to the business and to society.
CULTIVATING INNOVATION Practical Solutions for Companies to Reduce Agricultural Emissions November 2023
September 2023
Figure ClimateRelated Proposal Outcomes
Climate risk management in the U.S. insurance sector An analysis of climate risk disclosures July 2023
BICEP NETWORK 2023 POLICY OUTLOOK
Decarbonizing U.S. Gas Distribution An Investor Guide September 2023
Proposals Commitments Majority Votes
1 / The Investor Guide to Climate Transition Plans in the U.S. Food Sector
ceres.org/XXXX
An Investor Guide to the Climate Principles for Oil and Gas Mergers and Acquisitions
1
1 | Development of a Company‑Level Cost‑Benefit Analysis Framework
1 | Hot and Cold: How Asset Managers Voted on Climate-Related Shareholder Proposals in 2022, and What It Means for 2023
ceres.org
ceres.org
1 / Innovation to drive down agricultural emissions: Practical solutions for the food sector
ceres.org
August 2023
October 2023
Responsible Policy Engagement Benchmarking for Banks
2022
Valuing Water Finance Initiative Benchmark Assessing Company Performance on Corporate Expectations across Four Water-Intensive Industries
Benchmarking Methane and Other GHG Emissions Of Oil & Natural Gas Production in the United States May 2023 Data downloads at: www.sustainability.com
Annual Report
Benchmarking Air Emissions Of the 100 Largest Electric Power Producers in the United States September 2022 Data Downloads at: www.sustainability.com
Introduction
In November 2022, Ceres released its second Responsible Policy Engagement Benchmark looking at the largest companies in the U.S. The benchmark measured the alignment between corporate climate targets and their direct and indirect climate policy engagement. The analysis provided a snapshot of how consistently the leading U.S. companies are lobbying on climate policy. The findings were that most companies had adequate systems in place to oversee climate risks within their enterprises but, in many cases, their climate lobbying was inconsistent with their announced climate and net zero plans. As Managing Director of the Monetary Authority of Singapore and Chair of the Network for Greening the Financial System Ravi Menon makes clear in a recent statement, “the world is still not on a transition path that is aligned with the goals of the Paris agreement. According to the latest report by the Intergovernmental Panel on Climate Change, we need to cut global greenhouse gas emissions by 43% in the next seven years to reach net zero by 2050. We are now one third of the way through this ‘critical decade’ and nowhere near this target. Emissions are still rising, not falling.” U.S. financial regulators have also publicly acknowledged climate as an emerging or current systemic risk, as highlighted in Ceres’ financial regulator climate risk scorecard . Given this backdrop, investors have stepped up their focus on the lobbying practices of the companies they are invested in, calling on companies, including banks, to disclose how their direct and indirect climate lobbying aligns with climate science. In 2021, six shareholder proposals asking for a report on climate lobbying went to a vote and were passed with majority support from large asset managers, including BlackRock and Vanguard. In 2022, 24 agreements were reached between investors and companies on climate lobbying proposals at various companies. This year, 19 climate- related proposals were filed at banks alone, with four being filed on climate lobbying disclosure and four banks engaging in dialogue on the issue. Investors are concerned when a company is expending resources on lobbying that is pushing in a direction inconsistent with its publicly stated strategy—and that is quite often the case when companies are members of trade associations that do not lobby in favor of some members’ climate commitments. Contributing money and resources towards trade organizations that do not lobby
ADDRESSING FINANCIAL RECOVERY GAPS FOR SOUTH CAROLINA HOUSEHOLDS: Models for Inclusive Disaster Insurance
Contributors:
May 2023
Benchmarking Methane and Other GHG Emissions of Oil & Natural Gas Production in the United States / May 2023 Data tables and maps at: www.sustainability.com
Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States Data tables and maps at: www.sustainability.com September 2022
1 | Responsible Policy Engagement Benchmarking for Banks
ceres.org
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Driving Outcomes: Expectations
Ceres establishes performance expectations for its network members to help improve business practices and measure progress towards our goals.
Year-Over-Year Growth in Ceres Company Network Members Meeting Performance Expectations
Company Network Member Performance Expectations ( MPEs )
GHG Emissions Have and disclose Scope 1, 2, and 3 greenhouse gas emission reduction targets (including short- and mid- term milestones) aligned with the most current science. Water & Natural Resources Have and disclose a policy and/or targets, as is sector relevant, to conserve and protect water and natural resources, on a path toward future resource positivity.
Human Rights Have and disclose a policy that clearly articulates respect for the human rights of both direct and indirect employees, preferentially aligned to the UN Guiding Principles for Business and Human Rights. Workforce Representation Have and disclose target(s) to improve representation, on a path to achieving equity for women and other historically disadvantaged or underrepresented groups across the workforce.
4%
6%
10%
10%
6%
11%
30%
18%
31%
22%
37%
59%
25%
31%
2021
2022
2023
b 0 MPEs b 1 MPE b 2 MPEs b 3 MPEs b 4 MPEs
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Driving Outcomes: Integrated Approach
Example of Integrated Strategies: Decarbonizing the Electric Power Sector
Example of Integrated Company Engagements: FY24 Proposed Ceres Program Team Engagements by Company
McDonald’s Corp. Amazon.com Inc. Wal-Mart Stores Inc. Apple Bunge Limited Kraft Heinz Co. McCormick & Co. Inc.
State and Federal Policy like Michigan’s 100% Clean Electricity Law
Mondelez International, Inc. Pilgrim’s Pride Corporation Alphabet Inc. Exelon Corporation Ford Motor Company General Mills, Inc. General Motors Home Depot, Inc. Microsoft Corporation PepsiCo, Inc.
Ceres Programs Water Food & Forests
Direct Engagement including industry coalitions like Corporate Electric Vehicle Alliance
Building Leadership like a press release about Duke Energy’s expanded net zero commitments
Financial Regulation Governance & Policy Policy Network Company Network Transportation Ambition Electric Power Banks Oil & Gas Shareholder Initiative Steel This graphic only includes companies having or more engagements Ceres directly engages with many additional companies
Decarbonizing the Electric Power Sector
Starbucks Corporation State Street Corporation The Wendy’s Company Tyson Foods Inc. Wells Fargo Archer Daniels Midland Company Bank of America Corporation Bank of New York Mellon Corporation
Public Influence like a blog from Dan Bakal, Senior Program Director, Climate and Energy
Investor Strategies including global coalitions like Climate Action 100+
Brown-Forman Corporation Duke Energy Corporation Levi Strauss & Co. M&T Bank Corporation National Grid plc PG&E Corporation Procter & Gamble Co. Unilever Yum! Brands, Inc.
Reporting and Benchmarks like Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the U.S. 2023 (the 19th edition)
Number of Proposed Engagements
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2024 Priorities
IRA and IIJA Implementation Recognizing that the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) can bolster clean energy investments in a transformative fashion, Ceres will redouble efforts to advance the robust implementation of these two groundbreaking laws. Ceres will mobilize rapid and effective private and public sector action to maximize investment opportunities and real-world outcomes, particularly in advance of a potential shift to a climate-hostile administration. Expanding Networks In the coming year, Ceres will focus on both expanding and deepening our partnerships with network members. Two central pillars of these efforts will be to recruit new members and to significantly advance private sector accountability through Investor Climate Action Plans (ICAPs) and corporate Climate Transition Action Plans (CTAPs).
Freedom to Invest Almost half of all U.S. states have been developing policies aimed at constraining the freedom of business leaders to assess high-risk financial activities. In 2024, Ceres will continue to build widespread support for Freedom to Invest, an initiative launched in March 2023, to safeguard the ability to consider all financial risks including environmental factors. Ceres will deploy three key strategies: • Expand our coalition building and messaging, • Strengthen the economic case for the freedom to invest, and • Oppose policies and regulations that diminish the freedom to invest.
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2024 Priorities
Protecting Forests, Land, and Water
Deforestation and destruction of other natural ecosystems contributes 11% of global greenhouse gas emissions and is a major driver of biodiversity loss. Ceres works with companies to end the deforestation associated with commodity production and benchmarks 53 of the world’s largest companies. In parallel, Ceres will work on Nature Action 100, a global investor initiative that Ceres co-founded, to catalyze corporate ambition and action on nature and biodiversity. And to address the growing urgency of water risks, Ceres will work with the Valuing Water Task Force and engage the 72 companies we began benchmarking in 2023. Net Zero Finance Ceres collaborates with top-tier investors to highlight how the climate crisis and sustainability challenges pose a substantial threat to financial markets and assist financial institutions and investors in effectively reaching their net zero objectives. In 2024, Ceres will focus on three critical dimensions of finance: investment portfolios, banking, and regulatory frameworks.
Policy and Regulator Change Ceres mobilizes company and investor support for strong policy and regulatory action. In terms of federal policy, Ceres will work on advancing bipartisan support for critical clean energy and climate smart policies, including the Farm Bill and Carbon Border Adjustment Mechanism. At the state level, Ceres will work on a slate of state and region-specific priorities, such as the Regional Greenhouse Gas Initiative. On the financial regulatory front, Ceres will leverage its annual Climate Risk Scorecard to encourage U.S. federal financial regulators to address the systemic impacts of risk and work to defend and advance the SEC’s final climate disclosure rules.
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Deep Dives
Exploring three key programs
Valuing Water
DEEP DIVE
Driving large-scale change to protect our most vital resource
We are facing an existential threat to our freshwater resources across the U.S. and globally. The global water crisis poses a systemic and far-reaching financial risk to nearly all economies as well as a danger to human and environmental health, and the water crisis is exacerbated by climate change. Ceres is working to drive large‑scale systems change for business use and management of freshwater resources.
Valuing Water Finance Initiative
Launched in August 2022, Ceres’ Valuing Water Finance Initiative (VWFI) is a global investor-led effort to engage a focus list of 72 companies with a high water footprint to act on water as a financial risk. Building a powerful bench of investors, Ceres will scale up engagements on water risk and move the most water-intensive and polluting industries and companies around the world to conserve and protect freshwater resources. In turn, the focus companies will reduce the water-related impacts of their operations and value chains to protect high-risk watersheds.
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Meet the Experts
Valuing Water Finance Initiative Benchmark
In October, Ceres released an inaugural benchmark report evaluating water stewardship practices of the VWFI focus list companies. The report assesses performance against the Corporate Expectations for Valuing Water and sets the benchmark for water-smart leadership.
Leslie Cordes Vice President Programs
Companies on Their Journey Towards the Six Corporate Expectations for Valuing Water
Leading the Way
On Track
Kirsten James Senior Program Director Water
No companies have met % or more of
On the Way
companies are on track
their expectations
companies are on the way
Starting the Journey
companies are
Shama Perveen, Ph.D. Director Water, Research
starting the journey
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2023 Leadership Circle Executive Summary | 15
Six Corporate Expectations for Valuing Water
VWFI Focus Companies
With input from the Valuing Water Finance Task Force and Investor Working Group, and a range of NGO and scientific stakeholders, Ceres developed a set of six expectations for investor engagements.
Apparel Sector
11
The Corporate Expectations
1 · Water Quantity
Companies do not negatively impact water availability in water‑scarce areas across their value chain
Beverage Sector
2 · Water Quality
Companies do not negatively impact water quality across their value chain
17
3 · Ecosystem Protection
Companies do not contribute to the conversion of natural ecosystems critical to freshwater supplies and aquatic biodiversity and actively work to restore degraded habitats that their businesses depend upon Companies contribute to the social, economic, and ecological resilience of communities they interact with by contributing to achieving universal and equitable access to water, sanitation, and hygiene across their value chain
Food Sector
4 · Access to Water and Sanitation
39
5 · Board Oversight
Corporate boards and senior management oversee water management efforts
Tech Sector
5
6 · Public Policy Engagement
Companies ensure that all public policy engagement and lobbying activities are aligned with sustainable water resource management outcomes
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Ambition 2030: Steel
DEEP DIVE
Decarbonizing the U.S. steel industry
Globally, the steel industry is responsible for more than 7% of total greenhouse gas (GHG) emissions. Ceres is working to ensure steelmakers set science-based GHG targets, support ambitious climate policies, and invest in both scrap-based electric arc steelmaking and further innovative solutions.
The Ceres Steel Program
Launched in 2017, the Ceres Steel Program focuses on the domestic steel industry. At its inception no U.S. steel makers had set GHG targets. Today, after years of successful investor engagements, 80% have set goals. Now in phase 2, Ceres is supporting the success of these GHG goals with science-based targets and Climate Transition Action Plans (CTAPs).
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Meet the Experts
Ambition 2030 Priority Sectors
The Ambition 2030 initiative is focused on decarbonizing six of the highest-emitting sectors in the country by driving greater corporate ambition, action, and accountability.
Steven Clarke Senior Director Climate and Energy, Ambition 2030
Banking
Electric power
Food
Oil and gas
Steel
Transportation
Ceres Ambition Spectrum GOALS Steel Number of Companies Year-Over-Year Growth in Steel Sector Companies Meeting Goals
Dan Seligman Director Climate and Energy, Steel
Stephanie Hanford Manager Climate and Energy, Steel
No Goals Discovered
Partial GHG Goals
Net Zero Goals
Near Term Science Aligned Goal
Robust C Aligned
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Recent Outcomes
The Case for Electric Arc Furnaces
Traditional steelmaking is done by a conventional blast furnace. An Electric Arc Furnace (EAF) heats material by means of an electric arc. Advantages to an EAF include: • Smaller and more efficient • Does not use a coke oven, a coal-based fuel source • Recycles scrap steel instead of raw materials, avoiding the mining process • Generates 75% less CO₂ per ton of steel produced
U.S. Steel 2021 Unveils its new sustainable steel line at Ceres Global and pledges to be carbon neutral by 2050—the first steel company to do so. 2023 Announces a deal to supply General Motors with low emissions steel from its electric arc furnace mill, Big River Steel.
Steel Dynamics 2021 Unveils one of the most ambitious carbon neutrality commitments among steelmakers worldwide, pledging to reduce GHG emissions 20% by 2025, 50% by 2030, and be fully carbon neutral by 2050. Additionally, the company plans to increase the use of renewable electrical energy for its EAF steel mills to 10% by 2025 and 30% by 2030.
Nucor 2023 The largest steelmaker in the U.S. and the 15th largest steelmaker in the world, commits to adopting its first 1.5°C target inclusive of Scope 3 emissions.
The EAF industry represents 70% of U.S. steel making, paving the way for global transitions.
Electric arc furnace
Conventional blast furnace
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Climate Transition Action Plans
DEEP DIVE
Moving corporate ambition into action
To meet the pace and scale needed to limit global warming, private sector ambition and commitments need to be translated into actionable, accountable, and science-based plans. For companies, it means developing and implementing Climate Transition Action Plans (CTAPs).
Corporate Climate Action
At Ceres Global in March 2023, former SEC Commissioner Mary Shapiro stated, “If 2021 was the year of mainstreaming net zero commitments and 2022 was the year of target-setting and developing the frameworks to operationalize these commitments, we are now calling 2023 the year of transition plans.” • Corporate appetite Of 13,000 that report to Carbon Disclosure Project (CDP), 4,000 companies are planning to develop a CTAP within the next two years • Investor appetite CTAP-related resolutions increased from 9 in 2022 to 61 resolutions in 2023, with over 50 planned for 2024 • Policy opportunities Regulations and IRA are spurring climate action on disclosures, science-based targets, and CTAPs • Ceres opportunities 20 Company Network members and 20 Shareholder Initiative investors are already seeking hands‑on work with Ceres
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2023 Leadership Circle Executive Summary | 20
Meet the Experts
Climate Transition Action Plan CTAP
Accounting and reporting
Science based goals
Climate Transition Action Plans ( CTAPs ) are a forward looking, near-term set of specific actions companies take to align internal business strategies and external climate and energy policy advocacy to reduce GHG emissions in line with limiting global warming to 1.5°C in a way that is just and equitable.
AMBITION
ACTION
ACCOUNTABILITY
ADVOCACY
Dan Saccardi Program Director Company Network
Conduct emissions inventory scopes Set sciencebased targets and metrics Validate targets SBTi TPI or recognized standard
Create emissions reduction plan Integrate plan into business strategy and governance Advocate for enabling public policies Ensure a just transition
Assess progress of
public disclosure results
Solicit feedback from stakeholders Adjust CTAP to meet
medium and longterm goals
Regularly update targets plan and business strategy to reflect most uptodate science
Laura Draucker Ph.D. Director Climate and Energy Corporate Climate Action
CTAP Components
Emissions Reduction Strategy
Governance and Business Strategy Integration
Public Policy
Just Transition
Current and nearterm actions your company is taking to reduce emissions in line with its C targets that cover the most relevant emissions sources across all three scopes
Current and nearterm actions you are taking to address risk management and new opportunities associated with climate change adjust investments and business model decisions align governance with C targets
Current and nearterm actions you are taking to advocate for public policies that support your C targets ensure all your lobbying and trade association activities are aligned with your C targets
Current and nearterm activities to support your existing workforce
suppliers and vulnerable customers in the net zero transition
consult and implement feedback from your workforce suppliers and impacted communities
The Rev. Kirsten Snow Spalding Vice President Investor Network
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2023 Leadership Circle Executive Summary | 21
Investor Climate Action Plans
2024 CTAP Program Objectives
In addition to leveraging portfolio companies to adopt and implement their CTAPs, Ceres will continue to work with Investor Network members and its global investor coalitions to establish Investor Climate Action Plans (ICAPs).
Ambition 2030 Companies in six high‑emitting focus sectors set targets and publish CTAPs. Federal Climate Policy Companies participate in policy advocacy as core CTAP component. IRA & IIJA Implementation Companies take advantage of and champion IRA benefits.
•
Ceres Investor Network: ICAPs Expectation Ladder
Key insights reported from an asset owner working group to provide guidance.
ICAPs and CTAPS
•
The ICAPs Expectation Ladder is made up of four tiers:
Tier 4 Companies do not negatively impact water availability in water‑scarce areas across their value chain. Tier 3 Investors have aligned portfolio emissions reduction targets with domestic policy goals or Nationally Determined Contributions. Tier 2 Investors have portfolios aligned with 1.5°C and net zero commitments by 2050. Tier 1 Investors have portfolios aligned with 1.5°C and net zero commitments by 2050 or sooner, making progress on target setting and implementation.
•
Investor Disclosure
Science-based GHG Targets
Emissions Disclosure
Corporate Engagement
GHG Reduction Strategies
Company Network Direct Engagement
•
Investment
Governance
Companies seek to work with Ceres directly on transition plan creation.
Governance
Public Policy Advocacy
Policy Advocacy
Just Transition
The general expectation is that investors will meet most or all of the requirements in a tier before they move to the next tier.
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Photography Credits Cover:
Nicolas Xanthos /Wirestock Creators
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