Earlier this year, in his annual letter to CEOs, Blackrock CEO Larry Fink called climate change a “structural, long-term crisis” and announced that his firm would avoid investments in companies that “present a high sustainability-related risk.” Reactions ranged from laudatory to deeply skeptical, but just about everyone agreed on one thing: a public announcement that climate must be considered in business decisions, from the largest investment manager in the world, was a big deal.

2020 has been a watershed year for corporate climate pledges. Apple laid out a plan that includes a commitment to be 100% carbon neutral for its supply chain and products by 2030. Walmart announced its ambition of zero emissions by 2040 without the use of carbon offsets. Microsoft pushed the envelope further, announcing it will offset all of the carbon it has ever emitted by 2050. All in all, around a quarter of the world’s top corporations have commitments for climate action by 2030.

"The choice between a healthy planet and good business strategy has always been a false one.”

LISA JACKSON, VP, ENVIRONMENT, POLICY & SOCIAL INITIATIVES, APPLE

Commitments and plans, of course, are not actions. Corporate watchdogs can cite any number of examples of “greenwashing”, where commitments don’t include the full scope of a company’s carbon footprint, pledges aren’t pursued, or actions contradict words. But like never before, market leaders are acknowledging that they can’t afford to ignore climate change. Their ability to manage risk, stay ahead of regulations, hire talent, attract investors, and meet customer expectations depend on taking climate action.

Stop fossil fuel extraction and production. We cannot continue to produce (and use) oil and gas at anywhere near current levels and avoid global catastrophe. The economic argument for moving away from fossil fuels is equally potent: oil and gas producers have lost $400 billion in market value over the last four years. Oil and gas companies need to make massive changes to their business models. BP has been an early industry leader here: in July they announced they would cut oil and gas production by 40% by 2030, moving from an “international oil company to an integrated energy company.”

Divest from fossil fuel and invest in renewables. Banks, money managers, and insurers must play a critical role in decarbonizing our economy. Money talks, and declining to lend to, invest in, or insure fossil fuel projects is the surest way to halt them. It’s an uphill battle: since the Paris agreement in 2015, 35 private banks have provided $2.7 trillion in lending and underwriting to the fossil fuel industry.

But there are indicators of change, too. One example: UBS, Goldman Sachs, and other banks have announced they will no longer finance new oil projects in the Arctic. Meanwhile, investment in new renewable energy was on course to total $2.6 trillion between 2010-19, and 2019 saw a raft of investor-owned utilities pledging to reduce fossil fuel use, including Duke Energy, the nation’s largest electric power producer.

Decarbonize supply chains. As we’ve learned, the way we use land for farming, mining, logging, and raising livestock accounts for a big portion of emissions. The industries that use the bounty of that land be it meat, soy, palm oil, minerals, or lumber, must take a lead on solutions. One of the highest-potential actions is shifting supply chains away from deforestation and unsustainable agriculture. Regenerative agriculture — a set of practices that builds organic matter in the soil, effectively drawing more carbon out of the atmosphere — is also gaining traction among companies like General Mills.

learn more about why forests matter and solutions for conserving tropical forests in our conserving our planet issue brief.

Invest in new technologies. If we were to stop burning all fossil fuels tomorrow, there would still be enough carbon in our atmosphere to continue warming the globe. The IPCC and other science bodies are now concluding that to reach 1.5 degrees, we must to find ways to, essentially, suck carbon from the sky. Microsoft is investing $1 billion into an innovation fund to develop carbon reduction, capture, and removal technologies.

Invest in communities. Communities that live in the shadow of refineries, factories, fracking, and mining and logging operations have seen their health and livelihoods damaged by these extractive industries. Compensation for losses should be the rule, not the exception, and corporations should look to benefit these communities as they invest in renewables. Other communities face uncertain economic futures as energy markets change; jobs in coal, oil and gas are lost; and tax bases shrink. Corporations, governments, and philanthorpy can invest in these communities by supporting them to plan for a diversified economy.

Plenty of companies take their role as global citizens seriously. But altruism is not the foundation of the corporate business model. They need pressure -- and support -- to set strong standards, increase transparency and oversight, and turn policy into practice. They need partners in communities and other sectors to bring about effective solutions. Philanthropy can help by investing in strategies like:

• Shareholder advocacy: leveraging the power of stock ownership to create change from within.

• Monitoring and reporting for accountability on corporate climate commitments.

• Building climate-forward leadership within companies and investor networks.

• Taking legal action against companies and industries driving climate change.

• Incentivizing equitable and local economic development through investments in community-determined clean energy, soil, and water projects poised to draw down corporate financing for scale.