While governments flounder on the issue, leadership can be found in the business sector where ‘money is power’ and that power is driving the change needed to ensure a balance between sustainable development/economic prosperity and emissions reductions/the environment. The starting point, as always, is Sustainability.
The physical risks of climate change are impossible to ignore for business. Supply chains, infrastructure, economic growth, workforces and food systems are all impacted by climate change. So what can be done?
Assess your company’s risk of being physically impacted by climate change. Ask yourself, what it would mean to your company’s bottom line if your supply chain was impacted? Take steps to protect your operations and create a mitigation strategy designed to withstand a hotter and more volatile planet. Remember, Directors and executives have a responsibility to not only report on possible risks but to take action to mitigate that risk.
The Taskforce on Climate Related Financial Disclosure (TCFD) Guidelines urges companies to be transparent in their reporting of governance, strategy, risk management, metrics and targets. The idea being, that investors determine a company’s suitability for investment based on its sustainability position ie; risk and mitigation strategies on climate change, social and governance behaviours. Companies with good green-credentials obtain improved access to capital, at cheaper rates. So, companies now realise the economic sense in being ‘green’ and reducing carbon emissions, as the world moves towards a net-zero carbon economy. No-one wants to invest in a company that contributes to carbon emissions, fails to adhere to the Modern Slavery Act and doesn’t pay staff correctly.
Not convinced? A recent report by McKinsey Global Institute puts global sustainable investment in excess of $30 trillion, which represents a 68% increase since 2014. They directly link the massive increase to the strength of an organisation’s Environmental, Social and Governance (ESG) Sustainability position.
Don’t be left behind. Organisations need to set ambitious targets to reduce emissions. Smart companies identify economically viable carbon reduction measures to achieve enterprise-wide transformation. So please, be brave and avoid setting incremental targets based on what you ‘think’ your company can achieve, instead target areas where you will achieve the largest positive impact.
The Climate Decade is all about action, so align your sustainability agenda with your organisation’s operating plans by making ESG data a core capability. Use this data to inform your strategic planning, supply chain management and capital allocation. And tell the world what you are doing. Tailor your sustainability reporting and communications to meet the needs of your growing range of stakeholders – employees, shareholders, customers, suppliers, government and industry. Further, the information you use to inform internal decision-making and disclose publicly is of critical importance - so make sure it’s auditable. Remember, anyone can claim they are a good ‘green’ corporation, but only those with auditable tracking, can prove it.
ESG Sustainability is a value-creation tool for your business and has the potential to positively impact your bottom line. With growing consumer demand for sustainable goods and services that are climate-friendly, can your business afford to ignore this? And let’s not forget about the multi-billion dollar purchasing power of the 2-billion Gen Z’s on the planet, who want authentic and sustainable consumerism. They are the future and they want action on climate change now.
The unprecedented threat of climate change has placed your business and the wider, global economy in a state of uncertainty. Things we took for granted – buying, selling, investing, growth and economic prosperity are no longer set in stone. Never before has ESG Sustainability been so important for the survival of your business and achieving the balance between economic survival and environmental stewardship. Who knows, it might just be the key to avoiding the catastrophic impacts of climate change on our beautiful planet.