Can we turn the ship around in time?

Antonio Guterres is not known for understatement when it comes to warning about the perils of climate change. Still, his recent speech as the United Nations’ climate talks began in Bonn, calling for “an exit ramp off the highway to climate hell”, was alarmist, even by the standards of the U.N. Secretary-General.

Yet he has good reason to be alarmed. The United Nations Framework Convention on Climate Change (UNFCCC) talks in Germany, in preparation for COP29 in Baku in November, were held as the European Earth observation agency Copernicus reported 12 straight months of record hot temperatures, while global greenhouse gas emissions rose another 1% last year, compared with the 40% cut scientists say is needed by 2030 to limit global warming to the 1.5 degrees Celsius agreed in the Paris Agreement.

Guterres said the Paris Agreement was “hanging by a thread”, and the battle to save the world from disastrous temperature rises “will be won or lost in the 2020s, under the watch of leaders today”.

In the latest issue of The Ethical Corporation magazine we look at how companies in some of the highest-emitting sectors are grappling with the challenge of making deep emissions cuts this decade, and ask what it will take to get them on track to get to net zero on a time scale that matters.

With some 70% of emissions coming from industries that are difficult to abate because they are energy- and carbon-intensive, we kick off by looking at the steel industry.

As Angeli Mehta reports, steel is not only the most emissions-intensive industry on the planet, it is a fundamental building block for the transition away from fossil fuels, found in wind turbines, electrolysers and electric vehicles.

But while industry pioneers are demonstrating that clean steel is possible, announcing 50 near-zero steel projects, just three have committed to set net zero targets, amid a dearth of policy support and demand uncertainty.

Mark Hillsdon looks at progress on greening cement, a material that is responsible for around 7% of all global carbon dioxide emissions, every tonne producing over 600kg of CO2. He explores the alternative materials, power sources and reuse models that are being developed around the world in the race to decarbonise the built environment.

News that U.S. microchip company Nvidia had briefly leapfrogged Microsoft and Apple to become the world’s most valuable publicly listed company last month highlights the importance of the semiconductor industry to the growth of AI and the digital economy.

As Ben Payton reports, chip manufacturing is highly energy-intensive, and one of the biggest sources of CO2 emissions in Taiwan, which supplies more than 90% of the world’s advanced microchips.

Payton looks at the tough choices Taiwan faces as it struggles to wean its grid off fossil fuels, and how its green power deficit could put net zero commitments from companies such as Microsoft and Apple at risk.

MICROCHIPS are also a key component in electric vehicles, which require 10 times the amount as in fossil-fuel vehicles. ?

As Mike Scott reports in his feature on the efforts of the automotive industry to decarbonise, EV manufacturing is facing a host of other barriers, amid regulatory uncertainty, competition from Chinese carmakers and fears over the availability of batteries and critical minerals.

Like 80% of all the goods traded around the world, the car sector is dependent on shipping. And while ships are the most-carbon efficient means of moving cargo, they account for 3% of global greenhouse gas emissions.

Angeli Mehta reports on how alternative fuels, efficiency measures, digital innovations and wind-assisted ship designs could help deliver on the International Maritime Organization’s commitment to cut its climate-warming emissions.

It’s a sad irony that small island developing states, among the countries that have done the least to cause climate change, are among those that will be first to suffer its worst impacts.

But can these states, known as SIDS, also help lead the way globally on rising to the challenge ?of meeting commitments made at last year’s COP28 to triple renewables by 2030?

Ben Payton looks at how islands as diverse as Dominica and the Bahamas, Hawaii and Bali in Indonesia are working to overcome constraints to ease their dependence on fossil fuels.

AND WE FINISH by examining some of the key challenges for decarbonising the food system.

Mark Hillsdon reports on how beef and dairy suppliers are grappling with their biggest climate impact: methane. While agriculture is the biggest contributor to methane, a greenhouse gas that is 80 times more potent than CO2 in the first 20 years, it is a blind spot for the industry and regulators alike, investors say, with only 16 countries having targets to reduce methane in agriculture.

Yet there are green shoots, with eight major brands now signed up to the Dairy Methane Action Alliance (DMAA), and a food supplement called Bovaer, which reduces enteric methane in both lactating dairy cattle and beef cattle, due for release on the crucial U.S. market after animal health company Elanco announced that the U.S. Food and Drug Administration had "determined the product meets safety and efficacy requirements for use in lactating dairy cattle."

Too late to be included in Mark’s article was news that Denmark, a major pork and dairy exporter, plans to tax farmers 300 Danish crowns ($43.16) per tonne of CO2 ?in 2030, increasing to 750 crowns by 2035, the first country in the world to tax agriculture.

The agreement was a wide-ranging compromise reached with farmers, industry, labour unions and environmental groups on policy linked to farming, the country's largest source of CO2 emissions.

New Zealand, however, recently scrapped plans to introduce a similar tax after facing criticism from farmers.

The food sector’s climate impacts extend far beyond meat and dairy production. As Catherine Early reports, the way we grow, distribute, consume and dispose of food is responsible for one third of total greenhouse gas emissions annually. Food systems are the biggest contributor to galloping biodiversity loss, and account for 70% of freshwater withdrawals.

Some companies, such as Nestle and PepsiCo, are making commitments to convert their supply chains to regenerative farming practices as part of their net-zero commitments, something that one study found could halve GHG emissions by 2030 and reduce other negative impacts on nature.

However, there is a major barrier: responsibility for delivering such practices rests with poorly paid farmers, who face added costs, coupled with a risk of short-term loss in yields, at a time when climate change is making their efforts to eke a living from the land increasingly precarious.

Catherine looks at nascent efforts by the industry and its suppliers to enhance farmer livelihoods and flip the script. ?

You can download the pdf of the magazine here, and read the online versions of all the articles on Reuters.com here.

NATURE AND FOOD SYSTEM transformation were big themes at London Climate Action Week. The Taskforce on Nature-related Financial Disclosures capped the week by announcing that the number of companies that have committed to adopt Its corporate reporting recommendations has risen 30% since January to 416.

It also announced additional sector guidance covering eight real economy sectors, including agriculture, as well as additional guidance for financial institutions.

LGIM, Generation Investment Management and MUFG Asset Management are the latest to join this cohort, bringing total assets under management covered by TNFD to $15.9 trillion.

They are big numbers, but adoption of TNFD reporting recommendations doesn’t mean companies have yet moved to implement them, as I learned when I interviewed Cathrine Armour, head of data initiatives at TNFD, on stage during a session at Reuters Responsible Business Europe summit a couple of weeks ago.

Companies that have published a TNFD-compliant report so far number closer to 40, the TNFD says. But it was encouraging to see among them Hong Kong Stock exchange-listed China Mengniu Dairy Ltd, which also set goals to achieve zero deforestation and 100%-responsible palm oil procurement by 2030.

In fact, China is one of the countries taking leadership here, bringing in requirements for A share listed companies to publish sustainability reports from 2026, and disclose significant impacts on ecosystems and biodiversity.

There is additional guidance in this area from the Science Based Targets for Nature. In his latest BrandWatch, Oliver Balch reports on how SBTN has appointed an external validator to assess whether the 17 companies that have piloted its guidelines, including UK supermarkets Tesco and Carrefour, fashion brands?H&M and Kering, and Nestle, have set targets that are robust and in line with science.

On the same day as TNFD’s announcement, nature intelligence company NatureMetrics said that early findings of its nature maturity assessment tool suggest that “a large majority of organisations aren’t yet fully prepared to scale up initiatives and effectively monitor and report on their impact on nature.”

The company said the new sector guidance published by TNFD was “particularly pertinent, as organisations still need support and incentives to move towards a nature-positive economy.”

LAST WEEK WE ALSO published commentary by NatureMetrics’ founder, Kate Bruce, who is skippering an all-women crew ?in a six-week expedition to circumnavigate Great Britain by rowing boat, a distance of 2,000 miles.

Bruce, who is one of our Trailblazing Women in Climate this year, is heading up a crew of six women working in the fields of nature, climate and corporate sustainability on the inaugural Sea Change Row, which is mapping the health of British coastal seas in unprecedented detail. The crew is aiming to inspire action rather than despair by drawing attention to the solutions that exist to protect and restore the ocean.

Nature is also the theme of a new comment piece?by ZSL’s Nathalie Pettorelli, who argues that the next UK government, which will be elected this week, needs to take a whole-of-government approach to addressing land use in one of the most nature-depleted countries in the world.

Meanwhile, in the wake of this month’s European parliamentary elections, which tilted European politics to the right, CISL’s Lindsay Hooper argues that this is not the time for companies to stand by, nor for themselves to deprioritise climate action.

Mike Scott’s latest ESG Watch picks up the same theme, looking at why it is important that companies ensure that lobbying by their trade associations is in support of the European Commission’s green agenda.

The London Stock Exchange has shown leadership in promoting the green economy through its Green Economy Mark and Sustainable Bond Market. But, as Catherine Early reports in her analysis its ESG reputation could be at risk if fast-fashion chain SHEIN secures a listing.

And I’ll finish the newsletter with findings of the Hot or Cool Institute’s Happy Planet Index. The institute’s Lewis Akenji says the high-polluting rich are not only doing the most to harm the planet, but are the least efficient at converting carbon spend into health and wellbeing.

Maybe it is that realisation, in the end, that will help turn the ship around.

To download a pdf of the latest issue of The Ethical Corporation magazine, click here