What CIOs should know about corporate heat pledges

After another summer of extreme heat, corporate heat pledges are emerging as a potential new tool for businesses looking to protect their people, operations and infrastructure from rising temperatures. 

Unlike carbon reduction or net-zero pledges, which focus on reducing greenhouse gas emissions, heat pledges focus on preparing for and managing the impacts of extreme heat. 

In this Q&A, Mark Trexler, founder of The Climatographers and climate risk advisor, spoke with TechTarget to share his insights on heat as a business risk. 

Editor's note: This Q&A has been edited for clarity and conciseness. 

How do heat pledges differ from traditional carbon reduction commitments or net-zero pledges? 

Mark Trexler: Corporate heat pledges are very different from net-zero pledges. You've got a whole series of pledges on the mitigation side, where companies are saying, "We'll help mitigate climate change," and then you've got a series of pledges on the disclosure side where companies are focused on keeping investors informed about how climate change will affect us. And then you've got the whole issue of adapting to climate change. 

What specific business risks are driving organizations to make heat pledges now?

Trexler: Heat waves and thousands of excess deaths this summer from heat are certainly in the news. I would argue that there is no specific heat business risk. There is a climate risk associated with climate change that is going to manifest in many ways, including potential heat, but in the U.S., it's just one of many issues. 

I don't think there is a unique business risk leading the decision to make heat pledges. I think it's the fact that it's in the news. I would see it as mostly ESG [environmental, social and governance] statements, and that it's an easy opportunity to score some ESG points. 
 
What are the business consequences of getting heat resilience and heat pledges wrong? 

Trexler: One of the big issues is how do you do it. There is a really significant issue here that one of the implications of climate change is going to be a massive increase in air conditioning load in lots of parts of the world. If the grid is not keeping up, you could put in all this air conditioning and adopt all this technology, and then everything fails when the grid goes down.  

It's a complicated issue. You can't just assume that buying a bunch of air conditioners is actually managing the issue. It would be a really interesting opportunity for companies to look at passive measures, like airflow throughout the building, as opposed to just throwing existing energy-intensive technology at the issue. 

Is there a risk that companies might focus on commitments and reporting rather than making real change? 
 
Trexler: One of the first things that comes up if you say you're going to make a heat pledge is how you monitor whether you're in compliance with your heat pledge. 

This can lead to a big focus on measuring more, putting tons of sensors into buildings and coming up with big dashboards that tell us the average temperature across our 500 facilities. You can easily get misled or go down a path where it becomes a performative art, where your primary goal is being able to point to a screen and say, "Aren't we doing great?” In reality, that's not where the problem is. 

There are certainly plenty of ways, as with all kinds of voluntary commitments, to get distracted from the real problem. I argue that this is a big issue, even with climate risk disclosure commitments and with net-zero commitments. 

Companies make net-zero commitments, but companies aren't going to affect climate outcomes. The only thing that's going to affect climate outcomes is climate policy. I would much rather see companies commit to intervening with their politicians than focusing solely on their emissions. We tend to focus on the shiny bauble, which often is not very relevant in terms of the big picture. 

You mentioned engaging with climate policy, and companies intervening with their politicians. What advice would you give to business leaders who might want to start taking that kind of action? 
 
Trexler: It is not easy. Here in the U.S., if a CEO comes out and starts calling the White House about climate change, it's not going to go well. But at the same time, even if you can't talk to your politicians, you can talk to your customers. 

I have always argued that companies should be much more involved in educating their consumers about climate change, in addition to trying to talk to policymakers. It doesn't have to be national policymakers; it can be local policymakers who make relevant decisions. Whether it's about AI data centers or about zoning rules, you can talk to your local people as well. 
 
Most companies are totally reluctant to do any of that. Yet, at the end of the day, without the right policy, business climate risk cannot be managed because climate change is just going to keep going. 
 
How do you make the financial case for a heat pledge or heat resilience program to the board? Are there specific numbers that would get their attention? 
 
Trexler: That's one advantage of the heat issue. You don't need to come up with long-term modeling to show that we need to be paying attention to this. Especially if OSHA and the regulators are going to be paying attention to heat, you don't need a lot of financial modeling to be convinced that you need to pay attention to heat because if you don't, you're going to be in trouble. 

You mentioned OSHA there. How can companies prepare for OSHA's heat enforcement?  

Trexler: It's relatively simple because OSHA generally tells you what to do, or at least what you have to accomplish, even if it doesn't tell you exactly how to do it. You have to pay attention to things like climate models because one of the real tricky issues here is that this is all changing, and it's all changing quite quickly. Things that might have happened every 100 years are now happening every 20 years. Coming up with a static commitment today doesn't necessarily prepare you at all for a moving target. 

How can you prevent heat resilience from becoming a one-off project? 

Trexler: Even with things like net-zero, we made the commitment but had no idea what we were really committing to, so now we're dropping the commitment. The way I would approach that is to try and make sure somebody in the company is actually tracking the big picture of climate risk. 

Having a board committee that is responsible for this issue and that has a fiduciary responsibility for climate risk, and tying it into the strategic planning function is one of the most important things. As opposed to just parking it at the door of the chief risk officer or the chief financial officer or the chief information officer, it has to somehow be built into the larger functioning of the company. That's not easy to do, and that's why a lot of companies are failing at that task. 

What's one piece of advice you would like a leader to take away from this conversation about heat pledges?  

Trexler: Companies really need to think about the fact that what they've always been able to assume as a stable baseline for thinking about their future, they ought to be thinking more along the lines of, "In 2032, climate change put our company at risk. We almost failed because of climate change." Then, in doing what's called a pre-mortem, come up with the story that led there. 

So, you say we failed and went bankrupt in 2035. Why? When people start thinking that way, and coming up with the storylines and data to reach that conclusion, they start to understand much more about how climate change could affect their company. Getting companies to do some of these corporate pre-mortems at the strategic planning level is one of the best ways to understand how all these pieces fit together. 

Rosa Heaton is an editor for the Reader Engagement and Outreach team at TechTarget.