Climate Solutions at Work
Finance is critical to avoiding a climate crisis: the world needs to mobilize US$4–5 trillion annually to keep atmospheric warming below 2°C—eight times what we’re currently spending. This is why you, as a finance professional, can make a big difference. You can direct corporate finances and investments toward climate solutions, while at the same time divesting from sources of the problem, aligning your organization's finances and investments with its climate goals and reducing financial risk for the organization and employees.
If you’re a budget and financial analyst, you can make the business case for investing in climate solutions. If you’re a treasurer, you can help track and reduce the carbon footprint of your company’s cash holdings. If you work in cost estimation, you can integrate climate considerations into pricing for products and services. Whatever your specific role, you can use your analytical, project management, and research skills to advance climate solutions.
Have you used this or any of our Job Function Action Guides to make your job a climate job? If so, we want to hear about it! We encourage you to share your story with us by emailing labs@drawdown.org
To make your finance job a climate job:
Banking
- Learn more about your company’s banking relationships. Direct decision-makers toward banks that are:
- minimally financing the fossil fuel industry and deforestation;
- shifting their financing to climate solutions;
- committing to aggressive anti-fossil fuel policies, like prohibiting loans to the tar sands, oil and gas, and coal industries; and
- calculating their financed emissions. (See this great example of reevaluating corporate banking from Patagonia).
Lending
- Gather a group of your colleagues (ideally, in conjunction with company leadership) to express concern to your bank over its fossil fuel lending and lack of transition plan, which is misaligned with your company’s climate commitments (see resources below).
Insurance
- If your company works with an insurance broker, inform them that you want to consider not only policies and pricing during each insurance renewal, but also the sustainability of insurance carriers.
Cash
Encourage decision-makers to allocate excess cash to banks that are fossil fuel-free, B Corp, or members of the Global Alliance for Banking on Values (GABV).*
* For those companies looking to invest excess cash into marketable securities and other liquid investments, there are a range of ESG and climate-aligned investment opportunities offered by many investment managers.
- While large established banks are needed for many of your company’s financial services, lower impact services and excess cash can be held with highly value-aligned banks.
Employee retirement benefits
- Using the resources below, team up with the human resources and operations team to evaluate whether retirement plans, 401(k)s, and other portfolios are invested in fossil fuels—and if they are, work to shift the default retirement option to a climate-safe one (or, at minimum, offer multiple climate-friendly funds in their place).
Borrowers and suppliers
- Offer borrowers and suppliers better terms and rates when they reach certain sustainability milestones (see examples here and here).
Investments
- Invest in products, strategies, and businesses that align your company with climate solutions.
Team travel
- Minimize carbon-intensive business travel for you and your team, and opt for virtual gatherings. If possible, instead of flying, choose lower-carbon travel options, such as the train.
Foster dialogue and action
- Build capacity and knowledge by connecting with other colleagues on the finance team – and beyond – at your organization. Come together to brainstorm climate action steps (check out Project Drawdown's Discover page for ideas), share best practices, and raise your collective concern at team and all-staff meetings.
Ready to take action? Here are some questions and ideas to help you get started:
Take stock
Identify your company’s corporate sustainability and climate commitments, if any.
- Are these goals connected to your team’s goals?
- Can you integrate the above actions into your company, team, or individual performance objectives?
- What banks and insurance companies does your company work with, and do they finance fossil fuel projects?
- Does your company disclose its greenhouse gas emissions and financial climate risk? If so, what standards does it use?
- Are your retirement plans, 401(k)s, and other portfolios invested in fossil fuels and deforestation?
Make needed changes or reach out to someone else who can
- What decision-making power do you have? Can you implement these actions yourself, or do you need to raise the issue with a supervisor?
- Is anyone with decision-making power already on board with climate action? Or is there someone you might be able to influence?
Test the waters by sharing your own interest in climate action with other key colleagues and gauging their response. Consult power-mapping tools for help.
You don’t have to do it alone
Find others in your department who are also climate-concerned. Join forces to show broad support for integrating climate action into finance and throughout the organization. Consider writing a letter or petition to leadership or bringing up your concerns at an all-staff meeting.
Need help making the business case?
Moving your company’s investments and finances away from the fossil fuel industry is no cause for financial concern. According to BlackRock, the world’s largest asset manager, investors don’t experience negative performance from divesting from fossil fuels. This is because financial institutions that have strong environmental track records usually have stronger social impact and corporate governance records as well. These institutions also benefit from considering the long term value of their assets.
Resources
- Watch the two-part webinar series, hosted by Project Drawdown and partners, on greening 401(k)s and decarbonizing corporate cash.
- The Carbon Bankroll report shows how corporate cash and investments can be a massive source of emissions.
- The Climate Intrapreneurs report helps finance professionals embed climate action throughout their institution.
- Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCF), and Global Reporting Initiative (GRI) describe minimum accounting standards that your company should be using to disclose climate risk.
- Invest Your Values can tell you whether your company’s retirement plan, 401(k), and other portfolios are invested in fossil fuels.
- Banking on Climate Chaos provides insights into the extent to which banks finance fossil fuels and deforestation-linked economic activity.
- BankFWD toolkit explains how banks are fueling climate change and what you and your company can do to counter this
- WorkForClimate offers employee support to help your company invest in climate solutions.
- The Exponential Roadmap Initiative’s Greening Cash Action Guide shows business leaders, sustainability managers, board members, and employees how to reduce emissions from their company’s cash holdings.
- The Transition Pathway Initiative (TPI) offers several free tools that evaluate public equities on climate management and performance, as well as banks on their climate strategy, engagement, and governance.
- FinanceMap ranks the largest financial institutions in the United States and European Union based on sustainable finance policies.
- One Earth’s Climate Finance Tracker is an open-source database that tracks climate-related funding going to organizations and companies, helping funders make more strategic decisions.
- International Federation of Accountants (IFAC) and We Mean Business Coalition (WMBC) have robust guidance on greenhouse gas reporting for finance professionals.
- Join the Climate Investing Community, a community of people looking to have the most climate impact with their personal finances.
- The United Nations Global Compact’s Roadmap for Integrated Sustainability includes a guide on how to integrate climate action into the finance and accounting function.
Everyone has a role to play
The Drawdown Labs Job Function Action Guides will help employees understand how their roles are critical in addressing the climate crisis, as well as implement high-impact solutions and navigate key considerations for taking action inside the workplace.
Partnerships
and Community
Affairs
Please note: This graphic is illustrative of how different teams across a company must work together to achieve strong climate action. We encourage you to examine your organization’s own unique structure to determine how to best coordinate and integrate climate action across functions.
