Newry attended last week’s Sustainability Summit, hosted by the Greater Cleveland Partnership and held at Huntington Convention Center in Cleveland, OH. This conference brings together business and civic thought leaders to discuss opportunities for driving sustainable growth in the region. Despite this only being the second year it’s been held, there were over eight hundred people from corporate, public, nonprofit, and academia in attendance, which is very exciting for a regional summit.
One of the biggest takeaways we got from the conference was that investments in the low carbon transition is a top priority for many and may manifest in a variety of forms, specifically transitional investments that enable low carbon tech (e.g., mining for battery materials) or sustainable investments to improve on ESG metrics of existing operations. Progress is being propelled by technological advancements, like the declining price of batteries and energy density improvements, changing consumer preferences, and increasing policy / government support (>$400B in U.S. federal funding through the IRA, CHIPS & Science, and Infrastructure Acts).
Action to move toward low-carbon processes is critical — not just for the environment but also the economy. BlackRock analysis showed that if nothing is done to mitigate physical climate risk, more than half of U.S. metro areas will see annualized GDP losses of 1% or more by 2060-2080. However, corporations are facing a few challenges in tackling this, including:
- Price premiums – Adopting more sustainable products often comes at a cost, at least until scale is achieved. There is an overall need to determine how to make these early investments neutral to P&L and to sell business cases internally. From an accounting perspective, there’s a need to think about transitions holistically (i.e., factoring in efficiency improvements, depreciation, tax incentives, etc.), but also to consider the intangible value of meeting sustainability commitments, such as the perceptions associated with following through on public sustainability goals.
- Collaboration across value chains – Understanding where customers and supply partners need solutions is key to guiding future initiatives. Many organization must think creatively about their business model to reduce price premiums and find mutual benefits with partners.
- Data is critical but complicated to gather – Companies need strong data for their own ESG reports in addition to sharing with customers and knowing where to look for opportunities to make investments for improvements. When aiming to understand Scope 3 emissions, this gets even more challenging due to the complexity of the value chain and potential for data availability and reliability gaps.
As companies continue to move towards a low carbon transition, there will be an increasing need to think creatively about business models and collaboration. Newry is sure to attend the Sustainability Summit next year, and we hope to see you there!
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