In April 2024, the Natural Climate Solutions Alliance asked Bayer to share insights on their approach to nature-based carbon credits and the broader landscape of corporate climate commitments. Daniel Schneiders, Director Climate Program at Bayer, provided us valuable perspectives on the current state of net zero pledges, the opportunities and challenges of investing in natural climate solutions (NCS) and the future of carbon markets.
Q1: Let’s start with the science: where are we heading? Are the net zero commitments made by businesses and countries so far sufficient to stay within the 1.5°C degree temperature increase? What is needed from businesses?
Daniel Schneiders (DS): Net zero commitments made by businesses and countries are a crucial step in addressing climate change, but current pledges are not yet sufficient to stay within the 1.5°C temperature increase target. To achieve this goal, more ambitious actions are needed.
From businesses, several key actions are necessary:
- Rapid reduction in emissions: Emissions have to be halved every decade (2030–> 50%; 2040–>25%; 2050 –> ~10%) so businesses must rapidly reduce their greenhouse gas emissions by transitioning to renewable energy sources, improving energy efficiency, and adopting sustainable practices throughout their operations.
- Supply chain engagement: Businesses need to engage with their supply chains to ensure that their entire value chain is aligned with climate goals, including reducing emissions and promoting sustainability.
- Transparency and accountability: Businesses should transparently report their emissions and progress toward climate goals, holding themselves accountable for their commitments.
- Additional climate contributions: supporting NCS is an indispensable component of global fight against climate change.
Q2: Is it challenging to convince senior leaders to invest money in natural climate solutions?
DS: It’s more than challenging: it costs money, requires resources, and could bring bad press. Nevertheless, senior leaders at Bayer believe that short-term additional climate contributions are necessary to fight climate change.
But it’s also important to highlight the benefits. Investing in NCS can lead to long-term cost savings. By implementing these solutions, we can increase operational efficiency and reduce our exposure to carbon pricing. Additionally, nature-based solutions provide valuable ecosystem services, such as improved water quality, enhanced biodiversity, and better soil health. These benefits can positively impact our agricultural and industrial processes.
Furthermore, investing in NCS helps build resilience against climate impacts, reducing risks associated with extreme weather events and supply chain disruptions. It also positions us as leaders in sustainability, opening up new market opportunities and giving us a competitive advantage as demand for green products and services grows.
Q3: Would the possibility of being able to make a claim make a difference?
DS: The possibility of making a claim can significantly impact convincing senior leaders to invest in nature-based climate solutions. For example, for brand reputation and marketing, being able to make a claim about investing in NCS can enhance a company’s brand reputation and demonstrate its commitment to environmental sustainability. This can lead to positive public perception and consumer loyalty, which can be valuable for businesses.
However, making a claim is not the main driver for our activities. So far, we don’t make use of any product-related claims.
Q4: What do you think the impact of the Integrity Council for the Voluntary Carbon Market (IC VCM) Core Carbon Principles will be? (Ten fundamental, science-based principles for identifying high-quality carbon credits that create real, verifiable climate impact.)
DS: The Core Carbon Principles (CCPs) are set to have a significant impact. First, they aim to standardize practices within the voluntary carbon market, which is crucial for enhancing the credibility and transparency of carbon offset projects. This kind of standardization helps reduce the risk of greenwashing and ensures that carbon offset projects deliver real and measurable emissions reductions.
Additionally, by providing a clear framework for environmental integrity, transparency, and accountability in carbon credit transactions, the CCPs are likely to increase trust and confidence among market participants. This includes businesses, investors, and consumers. With greater trust, we can expect increased participation in the voluntary carbon market and more investment in carbon offset projects.
Finally, the CCPs are likely to influence corporate climate strategies. By encouraging businesses to prioritize high-quality carbon offset projects that adhere to these principles, the CCPs can drive more ambitious emissions reduction efforts. This, in turn, fosters greater investment in sustainable and impactful climate solutions, pushing companies to commit to higher standards and more effective climate actions.
Q5: Any other lessons you’d like to share with readers?
DS: Yes, collaboration is key – addressing complex global challenges such as climate change requires collaboration across sectors, including government, businesses, non-governmental organizations, and communities. Working together can leverage diverse expertise and resources to drive meaningful change.
Innovation also drives progress. Embracing innovation and investing in sustainable technologies can lead to breakthroughs in addressing climate change. Whether it’s renewable energy, carbon capture, or sustainable agriculture, innovation plays a vital role in creating impactful solutions.
Transparency is also crucial. Transparent reporting and communication about environmental initiatives, including carbon reduction efforts and sustainability practices, are essential for building trust with stakeholders, customers, and the public.
Adaptation is as important as mitigation. While reducing emissions is crucial, adaptation to the impacts of climate change is equally important. Building resilience to climate-related risks, such as extreme weather events and sea-level rise, is essential for long-term sustainability.
And finally, every action counts. Individual and collective actions, no matter how small they may seem, contribute to the broader effort to address climate change. Encouraging sustainable practices at all levels, from personal habits to corporate strategies, is vital for creating a more sustainable future.
About the Natural Climate Solutions Alliance
Convened by the World Economic Forum and the World Business Council for Sustainable Development (WBCSD), the Natural Climate Solutions Alliance conveys the voice of business, NGOs and solution providers on the need to mobilize a high-integrity demand for high-quality natural climate solutions. Businesses can learn more about natural climate solution carbon credits by accessing the NCS Procurement Hub, or reaching out to ncsalliance@wbcsd.org.
About Bayer
Bayer is a global life science company focused on health care, nutrition and agriculture, with the mission of “Health for all, Hunger for none.” Bayer is committed to driving sustainable development and generating a positive impact with its businesses while creating value through innovation. The Bayer brand stands for trust, reliability and quality throughout the world. For more information, go to www.bayer.com.