A Unique Approach to Managing and Monitoring Corporate Climate Risk Reduction

Learn how 15 Rock's innovative OKR-inspired model helps companies transition towards lower emissions and a sustainable future.

Introduction

Climate change is an existential challenge that we all face, and businesses around the world are increasingly taking steps to mitigate their impact on the environment. At 15 Rock, we've developed a unique approach to help companies manage and monitor their transition toward reducing climate risk. Drawing inspiration from successful firms like Intel, Google, Amazon, Facebook, Goldman Sachs, and McKinsey, our model adapts the Objectives and Key Results (OKR) approach for climate goals. In this article, we'll explain how our innovative system works and why it is crucial for businesses serious about sustainability.

The Two-Component System

Our climate risk management system consists of two main components with several sub-components designed to ensure efficiency.

1. Setting Numeric Goals with Timeframes

The first component involves setting numeric climate goals that include current data (where you are today), target data (where you want to be), and a timeframe by which you want to achieve your goal. For instance, companies can set targets for reducing carbon emissions in Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased electricity), or Scope 3 (other indirect emissions).

However, long-term goals often span multiple generations of employees or leadership teams. To make these objectives more achievable and practical for each era of leadership within a company, we recommend dividing larger goals into sub-goals.

2. Creating Action Plans with Evidence

Once numeric goals are set up in our system's first component – it's time for action! The second component requires companies to create evidence-based action plans detailing how they will achieve their targets.

Similarities can be drawn between this process and designing a fitness regimen; losing weight requires setting specific objectives such as losing 'X' kilograms by year-end but also necessitates devising exercise routines that contribute towards achieving those objectives.

For climate risk management actions within our system:

• Describe each action clearly
• Connect actions directly to the relevant goal(s)
• Estimate an action's contribution towards achieving its associated goal(s)

Using these guidelines allows both corporate leaders and investors alike greater insight into how well-prepared organizations are when it comes to accomplishing their sustainability aims.

Linear vs Nonlinear Approaches

Our platform supports both linear approaches - where emission reductions occur at a constant rate each year - as well as nonlinear approaches - where distinct reduction percentages can be assigned each year. This flexibility accommodates varying business strategies while keeping participants accountable throughout the transition process.

Industry Analysis & Investor Insights

An additional advantage of our system is its ability to provide industry analysis even if some companies haven't yet established specific targets or dates related solely to addressing climate concerns. Investors can use this information when deciding which businesses possess robust plans ensuring long-term viability amidst growing environmental challenges.

Conclusion: Time for Action

At 15 Rock, we believe that managing corporate climate risk should be quantitative yet flexible enough so as not just merely rely on vague commitments from businesses but rather actionable plans with measurable results over time. Our unique OKR-inspired model offers transparency and accountability while empowering investors to make informed decisions regarding environmentally responsible investments.

Now more than ever before – it's crucial that organizations take decisive steps toward mitigating their environmental impact creating sustainable futures where economic growth doesn't compromise our planet's health and wellbeing.

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