Memo to CEOs: It’s Time to Commit to Net-Zero.

Mark Tercek
10 min readFeb 19, 2021


Our topic this week: The compelling opportunity for CEOs to commit their organizations to a net-zero economy.

Encouraging news about business leaders addressing climate change and other environmental challenges has really surged over the past few months. More CEOs and prominent investors are stepping up and leading on the environmental front. This makes sense and is great news.

Larry Fink’s recent letter to CEOs — this year telling them to prepare a plan to be net-zero or suffer market consequences — was an especially high-profile and welcome shot across the bow. We can expect others (see hedge fund leader Chris Hohn) to be more assertive.

I’ve been trying to persuade CEOs to lead on the environmental front for more than 15 years. Maybe I was a bit ahead of my time. But I’m declaring now as plainly as I can: We’re at a tipping point. It’s time for business to move.

I have two main arguments for CEOs to consider:

  1. From a self-interested point of view, if you step up and lead, you and your organizations will be well rewarded.
  2. From an environmental point of view, if your organizations engage fully, it will make a big difference in society’s efforts to reach critical goals.

Could The Glass Be Half Full?

Back when I ran TNC (2008–19), people always asked me the following question: “Are you optimistic?”

This is what they meant: Did I think humankind would successfully address the daunting environmental challenges we face?

My bold answer was always the same: “It depends.”

It depends on what we do. Humankind has the tools, know-how, and resources we need to address our challenges. Whether we will do so, however, is another matter. That’s where all of us come in. We need people across society and in all walks of life — but especially leaders of influential organizations — to step up and push for the change we need now. If we do that, yes, I’ll be optimistic.

But Do We Know What to Do?

The other question people liked to ask me: “What’s the plan?” The people asking this question were often trying to assert that we environmentalists had never formulated an actionable plan to address the climate challenge. Therefore, they implied, it was our fault that more wasn’t being accomplished.

Well, I have good news for them. We’ve now got the plan. Just two words: Net-Zero.

Our plan to address the climate challenge is to achieve a net-zero economy by 2050 and to get halfway there by 2030. (Looking beyond 2050, we’ll want to go further and remove enough carbon to get back down to pre-industrial levels. But one step at a time.)

What’s a Net Zero Economy?

A net-zero economy is one where we add no more greenhouse gases to the atmosphere than we remove. Picture a landscape in which 1) any emission that can be eliminated is eliminated, and 2) any residual emissions are removed through nature-based projects (like restoring ecosystems) or technology-based ones.

Net-zero is not carbon neutrality. The latter usually refers to programs where one entity (company, country) can compensate for its emissions with offsetting reductions purchased from another entity. There’s no room for that in net-zero. Unavoidable emissions must be balanced with carbon removals.

What does a net-zero economy look like?

Princeton’s Jesse Jenkins and his team have produced a detailed study explaining exactly what we need to do to reach net zero in the US over the next 30 years. It’s a complicated plan but mainly calls for two big things:

  1. The electrification of everything that can be electrified (home and building heating, stoves, cars, etc) and all of the electricity needed comes from renewables.
  2. An enormous build-out of new infrastructure. Envision huge expansions in wind, solar, transmission lines, EV charging stations, and so on.

It’s a very positive, exciting outlook.

Why do we need business to take the lead?

The private sector has important strengths here — thinking big, moving fast, innovating, keeping costs down, raising and deploying capital effectively, and generally executing well.

More specifically:

  • Business can move faster than policymakers. The policy outlook is improving, but too slowly. Business can help us get everything moving now before it’s too late. Continued delay is very costly.
  • Business can demonstrate the upside. The path forward is one with huge economic opportunity and important win-win outcomes like better human health, protection of biodiversity, and — done right — greater environmental justice.
  • Business knows how to be cost-efficient. People sometimes assume getting to net-zero is an overly expensive endeavor. But done right, it’s not. And it’s far cheaper than the cost of doing too little. Society should earn very high returns on its investment in net-zero. But execution really matters. That’s one place where business can help a lot. It’s critical that we move forward in the lowest-cost way. Otherwise, high transition costs will hurt — especially for people who are less well off. That would be a bad outcome that also makes the politics more difficult.
  • Business leaders can credibly make the case for job growth. Again, consider the Princeton study and just think about how many high-quality new jobs are on offer here. Far more than are lost by canceling pipelines, for example.
  • Business can push policymakers. We’ll need regulatory frameworks and government funding that enables this transition. We’ll need quick permitting of new infrastructure; ambitious R&D programs; green federal spending (think EVs, for example); and regulations that crackdown on carbon polluters. Business knows how to lobby the government for the measures we need.

Of course, business can not — and should not — try to do all of this alone. Policymakers, other government officials, NGOs, academics, and all citizens have key roles to play. This should be a team effort.

Case in point: who did society turn to for urgently needed COVID vaccines in the midst of the pandemic? The private sector (which in turn engaged academics and others as appropriate). The pharma companies moved quickly; accessed the capital, technology and R&D they needed; and executed brilliantly. We need those same capabilities in the climate battle.

But what’s in it for you, CEO? Why should you take this on?

Here are four reasons why it’s in the best interest of CEOs to act immediately:

1) On the DefenseProtect your company. Without a net-zero plan, you should worry about:

  • Larry Fink and other titans of the investment world downgrading or dumping your stock. Over time, ESG-themed investors will have more capital to deploy and greater determination to shun climate laggards.
  • Important corporate customers like Walmart and Apple insisting that suppliers also commit to net-zero plans, in accordance with their own ambitious climate commitments. Get in line, or they’ll drop you.
  • Your insurance coverage being dropped or repriced. Insurers under pressure to rethink their business models to minimize climate risk and to comply with investor demand for climate commitments (see here).
  • Activists naming and shaming you, or worse, leading a boycott against you.
  • Recruiting and retaining great employees. Growing numbers of climate-concerned employees want positive action from their employers.
  • Having to play catch up as old ways of doing business become obsolete (consider internal-combustion suppliers to GM) and climate-misaligned capital investments become stranded.
  • Regulators requiring such steps eventually. It will be lower cost and lower risk if you start now.
  • Ecological collapse, as this is not so good for business.
  • And your legacy being as “one of the CEOs who resisted addressing climate.”

True, all of these risks might not be realized right away. Maybe you can dodge some of them. But most are likely to be realized over time. Why not prepare now and avoid getting caught flat-footed?

Consider Exxon. Probably no leading company has been more outspoken about its decision to stick with fossil fuels, nor suffered more consequences (see here). Just look at what’s happened over the past few weeks: Rating agencies say Exxon should prepare for credit downgrades. A new hedge fund is leading a high-profile assault. Exxon disclosed that it was recently in merger discussions with its biggest competitor in order to buffer its financial position. And investors are now encouraging the company to add a prominent activist as a new director on the board. Maybe Exxon is getting the message — just this month the company announced a $3 billion investment in carbon capture.

2) Play OffenseTake full advantage of all of the new business opportunities presented by net-zero goals.

  • Review the Princeton plan again. Don’t you see a huge number of new opportunities for top-line growth? And don’t you expect pursuing them will lead to more?
  • Given investor focus on climate, expect higher valuations for businesses that are on their way to being net zero-aligned.
  • Worried about recruiting and retaining great employees? The workforce today cares more than ever before about working for firms whose values align with theirs. This is especially evident in connection with climate
  • See Bloomberg Businessweek’s new list of “Climate Billionaires.” It’s a long list. But it includes only one American — Elon Musk. Most of the billionaires are from China. I was surprised when I read the article. Seems like a wake-up call to me.

3) Getting started is not difficult, and you can manage risk carefully.

  • Until very recently, no companies had ever done this before. The companies who will face the most criticism will be those who sit this out, not the ones who earnestly engage now.
  • The long time frame is helpful. On the one hand, there will be pressure to get most of the easier and lower-cost stuff done in the near term — say, by 2030 — but these initial moves should pay for themselves quickly. On the other hand, there will be time to iron out the more difficult challenges as 2050 is a long way off.
  • The first step is to formulate the initial plan — say, for the next 9 years. The Science Based Targets Initiative has guidelines and advice for how best to get started (and there are other good initiatives like this too). If you sign up, your fellow participants will include other companies, financial sector players, and members of the environmental and academic communities. Most of the participants collaborate with one another to determine the best ways to handle the toughest challenges. Grab a seat at the table; be part of the discussion and decision-making.

4) FOMO. Look who’s announced net-zero goals — some 1500 companies (and more than a quarter of the S&P 100). The list keeps growing every day. Don’t get left behind.

What about financial institutions?

They’re not exempt. The same principles hold true.

It’s a bit harder to see exactly what’s happening in this sector, mostly because there is less transparency. That’s easy to fix — just disclose more about your efforts. Or, if not ready, it’s time to formulate your plan.

Financial asset owners are starting to throw their weight around. They want their capital to be invested in ways that align with their values. I expect they will keep pressing for more say on exactly how their capital is deployed. I think we’ll see a shrinking of the “distance” between financial asset owners and investment managers.

  • See Blackrock. In addition to issuing letters like Larry Fink’s noted above, BlackRock is overhauling its fund offerings to align with the net-zero world. New products such as climate-aligned index funds will allow for huge amounts of passive money to be invested in a net-zero friendly way.
  • Pension funds are forming coalitions to push for these changes (see the Net Zero Asset Owners Alliance).
  • Global insurers like this one are doing the same both as investors and as risk managers.
  • Banks are finally moving with big names like Morgan Stanley and TD Bank leading the charge.
  • I think PE firms should be doing more, and I think we will see that shortly. It seems inevitable that the funds’ underlying asset owners — the limited partners — will press harder for this agenda. And PE deal teams will also come to understand that net zero-aligned companies will sell for higher valuations.

I recently “put my money where my mouth is” by making an investment in the start-up mobile banking platform Ando. The company’s business model is simple and elegant. They eliminate all of the “distance” between climate-concerned asset owners (today, depositors; in the near future, insurance and credit card customers too) and managers of their capital. 100% of customer capital is invested in climate solutions, period. No exceptions. Total transparency too. My guess is that we will see more ESG-aligned and customer-oriented innovations along these lines.

I’m Not Saying This is Easy.

Not long ago, I was a CEO myself. By and large, I’m enormously proud of everything the team accomplished during my 11-year tenure at The Nature Conservancy. Looking back, however, there are of course some things I wish we had done differently. One is that I didn’t follow the advice I’m giving you now.

I brought up the idea of developing an ambitious plan for TNC to reduce its greenhouse gas emissions significantly. I got a lot of pushback. Some colleagues were concerned it would take away resources from higher priorities. Others thought it would be too disruptive to the way we did business. And others just slow-walked everything I asked for on this front. Fully aware that CEOs have to pick their battles, I eventually moved on. In retrospect, I think that was a big mistake — one I’m hoping others will learn from and not repeat. You’ll likely run into headwinds just as I did, but you should persevere. Reach out and find those colleagues, shareholders, and customers who share this aspiration and recruit them to support your efforts. I should have done that. But the good news is, there are likely a lot more of them today. The timing for this couldn’t be better.

My Recommendations to CEOs

  • Just get going. It’s not going to get easier if you wait.
  • Be transparent every step of the way. You don’t have to have all the answers, but you do need to “show your work.”
  • Set and disclose interim milestones. Give yourselves and others a way to measure your progress.
  • Don’t overpromise; don’t brag. This is difficult and never-been-done-before stuff. It won’t always go smoothly. Manage expectations. If things go better than expected, you’re in the position of overdelivering. That’s a good place to be.
  • Partner. There’s no need to do this alone. Join industry consortiums, collaborate with NGOs, help others and learn from them too.
  • Engage your constituents. Invite employees, customers, and suppliers to advise you and help.

In sum, there are lots of upsides if you act and lots of downsides if you don’t. So what are you waiting for?



Mark Tercek

Former CEO of The Nature Conservancy CEO. “Nature’s Fortune” author. Family man, yogi, ice climber, vegan.