Climate is back on the agenda for the President and Congress. With broad business support, the Biden Administration set a Nationally Determined Contribution (NDC) under the Paris Agreement to cut greenhouse gas emissions 50-52% below 2005 levels by 2030. To meet this target and put the U.S. on a path to achieve net-zero emissions by 2050 – consistent with global ambition to limit warming to 1.5˚ C above pre-industrial levels – new policies are needed to drive down emissions across the economy.
Companies and investors have a vital role to play in advancing the public policies needed to meet both the U.S. NDC and their own emission reduction goals. There is a narrow political window this year to enact policies that meaningfully reduce greenhouse gas emissions, and the need for business leadership is urgent. Now is the time for every company to make climate a top advocacy priority – on par with tax or trade or any other core business issue – and drive that advocacy from the C-suite. The following are top climate policy priorities for corporate advocacy in 2021, as agreed by the NGOs that endorse the AAA Framework for Corporate Climate Leadership1:
- Decarbonize electricity
- Decarbonize transportation
- Limit methane emissions
- Advance nature-based climate solutions
- Enact an economy-wide carbon price
- Mandate climate risk disclosure
In addition to being critical to meet the NDC, all of these policy priorities will drive economic recovery, create well-paid jobs in the United States and boost U.S. competitiveness. They can and must also be designed to promote environmental justice and economic equity, by reducing climate and air pollution in overburdened communities and by ensuring a just transition for fossil fuel workers.
This document provides the rationale for each priority, key policies to support and timeline for business engagement. Policies of particular relevance to certain sectors are noted accordingly; all are relevant to investors seeking to reduce climate risk and improve ESG performance in their portfolio companies.
Finally, business voices will be critical in urging the Administration and Congress to raise U.S. and global climate policy ambition at key moments in 2021 (e.g., G7, G20, COP26). We will share further guidance in due course on opportunities for businesses to engage; for now please find relevant information here.
1 This list is not exhaustive but reflects our shared priorities among policies likely to move this year and where contributing NGOs have expertise.