How Salesforce’s Stakeholder Capitalism Model Opens New Pathways to Net Zero

More than 8,000 companies around the world have joined the UN’s Race to Zero initiative, the world’s largest collective alliance committed to achieving net zero carbon emissions by 2050 at the latest.

Many companies are still on the starting line of this race. The targets are in place, but they are now awaiting the starting gun, a sure sign that low-carbon markets, policy instruments and consumer demand are all firmly geared towards a net-zero future.

Others, only a privileged few, have already set up the sites. They strive to achieve science-based targets and have invested in low-carbon solutions throughout the value chain. For some, the race has been run, net zero has been reached, but the hard work doesn’t stop there.

In late September 2021, global technology company Salesforce announced that it was a net zero company “across its entire value chain” and that it had achieved 100% renewable energy for its operations.

Prior to the announcement, Salesforce had already provided carbon-neutral cloud and operations. In an effort to further reduce emissions internally and reduce the use of carbon offsetting, the company has developed 1.5C-aligned targets endorsed by the Science Based Targets initiative (SBTi). These involve halving scope 1 (direct) and 2 (power-related) emissions by 2030, compared to a 2018 baseline; halve Scope 3 (indirect) emissions from fuel and power activities in the same time frame and help suppliers representing 60% of Scope 3 emissions set their own targets in line with climate science by 2024.

For the company’s Vice President and Global Head of Sustainability Patrick Flynn, achieving net-zero emissions in the build-up to COP26 was a historic moment, aided by the company’s willingness to tackle disruptive challenges and place them at the heart of the company’s values.

“At Salesforce, we’ve always believed that businesses are the best platform for change and that the planet needs big, fast change,” Flynn told edie as part of Net-Zero November. “Whether it’s the climate emergency, the collapse of biodiversity or the challenges of equality, change is clearly needed.

“To make business a force for good, we need to make sure that we are thinking of all stakeholders, the communities we work with among our employees, the planet and of course stakeholders as well.”

Stakeholder capitalism

Flynn notes that Salesforce has continually evaluated and evolved its approach to values ​​and business goals, with the goal of better reflecting the needs of the planet and society.

Salesforce introduced a 1-1-1 model in 1999, which commits the company to committing 1% of the company’s equity, 1% of its proceeds, and 1% of employee time to the company and to planetary causes.

In 2022, 17,000 companies in more than 100 countries have adopted the 1-1-1 model, and Salesforce has awarded more than $240 million in grants, 3.5 million hours of community service, and provided product donations to more than 39,000 nonprofit and educational organizations. institutions since the introduction of the model.

The company’s approach is evolving beyond the 1-1-1 model with the goal of reintegrating its net zero goal and the needs of the planet into its decision-making processes.

The company has officially named sustainability as a “core company value”, alongside trust, customer success, innovation and equality. This allowed Salesforce to drive climate action in its business model and services and now embeds planetary consideration into its V2MOM – a Salesforce alignment process that guides business decisions.

All of this, Flynn says, has seen Salesforce shift to a “stakeholder capitalism model” that unleashes innovation around core business goals, including a net zero vision and science-based goals.

“We talk about stakeholder capitalism as opposed to shareholder capitalism, and the work of the corporate environmental sustainability field fits right into all of that,” Flynn says. “A lot of it is about culture and values ​​and we’ve worked hard to create a company full of people who have been attracted to a company with a bigger mission.

“Culture is difficult to grow. Identifying your values, knowing what your company stands for, talking about it, acting on it, all of those things, building the cultural flywheel over many years… it builds momentum and that’s how we were able to launch the things that we have and get the support we need.

This cultural approach is found at both COP26 and COP27. Salesforce was a lead partner at the Glasgow Summit and also announced a wave of new initiatives in Egypt this week at COP27.

A new Nature Accelerator has been launched to provide nonprofits with new capital options to scale climate solutions. Additionally, a new ecosystem restoration project in Zambia has been announced, with the company partnering with the Global EverGreening Alliance to grow and restore 30 million trees in the country while supporting local farmers.

The move is part of Salesforce’s commitment to conserve, restore and grow 10 million trees by 2030.

Collaborate to innovate

For Flynn, these types of partnerships, where companies step out of the private sector to work with governments and nonprofits on the ground, are crucial to ensuring Salesforce stakeholders have a say in climate action. of the company.

“Whether you’re selling software or soft drinks, your customer is definitely increasingly in touch with the urgency of the emergencies we’re facing right now and I think one of the things that Salesforce talks about is to connect with your customers in a whole new way,” adds Flynn.

“We try to connect with them and our suppliers around values, especially around climate action. To do this, you need to be clear about your net zero goals to show that the company is serious about these issues.

“We can create values ​​centered on trust and these can produce great innovation. I believe the next big waves of climate action will come from those strategies that can only be achieved in a trusted partnership with another organization. I think most big companies have really harnessed a lot of what they can do on their own, and the big levers for change are untapped. »

Indeed, partnerships are a key goal for Salesforce. The company announced plans to purchase $100 million in carbon credits from technologies that remove carbon from the air at scale, as part of its participation in the First Movers Coalition, which has since added more than members at COP27. He also launched the “Net-Zero Cloud” to help organizations like Mastercard, JetBlue, TELUS and Deloitte Germany improve their approaches to sustainability.

This collaborative approach has also been crucial in the company’s efforts to achieve 100% renewable energy.

The company’s push towards 100% renewable energy has seen its carbon footprint across scopes 1 and 2 drop by 163,000 MTCO2e. In fact, electricity consumption represents around 90% of the company’s direct emissions.

In 2021, Salesforce achieved 100% renewable energy, purchasing enough renewable energy to match all the electricity it uses globally, which equates to approximately 746 GWh. However, although the milestone of reaching 100% renewable energy globally has been achieved, this does not mean that the company is entirely powered by renewable energy due to the complexity of regional markets. The company is working with affected suppliers and regions to try to unlock better accounting methods.

Lag evolution

Another ever-evolving part of the company’s net zero ambitions is that of offsets.

While many offset projects are credible and companies often see no other path to net zero, offsetting has proven to be one of the most contentious topics in the climate debate. Companies have been accused of greenwashing after investing in unverified credits or failing to prioritize internal emissions reductions. Double counting is a recurring concern.

Salesforce notes the potential of carbon markets, but is also concerned that climate target solutions only received 8% of climate finance in 2017-18. The market also faces an annual funding gap of $711 billion through 2030 that, if left unaddressed, could hamper global progress on climate and biodiversity.

As such, Salesforce recently released a new white paper on carbon markets.

“While carbon markets today are far from perfect, they are one of the best tools we have to fund these critical climate solutions,” the document says. “They are not a silver bullet and should only be used as part of a climate action package. But that’s no excuse for inaction.

Salesforce, like many other companies, is looking at the “net” aspect of net zero emissions.

The report notes that Salesforce has offset 85,000 MTCO2e of its remaining Scope 1 and 2 emissions, as well as all of its 185,000 MTCO2e Scope 3 carbon-neutral cloud emissions.

Indeed, Flynn notes that carbon credits, through the lens of a corporate decarbonization plan “should be used last, but not later.”

“Organizations that take climate action seriously should first think about what they can do to help the planet get to net zero as soon as possible,” he adds. “They should model emissions reduction targets that drive systemic change within their four walls and within their value chain.

“For all the shows that are left, hopefully as little as possible after all this work, let’s not wait until 2050, or 2040, or 2030, let’s invest in projects that have an impact today and change people and projects . Credibility is essential.