By Chris Bowden, Managing Director of Squeaky
In our vitally endangered world, there is simply no version of the future in which business leaders can continue as they have always done. Because the reality is that every organisation, across every industry, will be transformed by the climate crisis.
How an organisation fairs will depend on whether it opts to harness the opportunity that exists in reducing its impact of climate change. Or indeed, whether it decides to stick with the easy option and do business the way it has always done.
In his 2022 letter to CEOs, Larry Fink, CEO of Blackrock was quoted saying: “The next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators – startups that help the world decarbonize and make the energy transition affordable for all consumers.” In the same letter, Fink goes on to question companies on the actions they are taking to disrupt their business. He asks how they are preparing for – and participating in – the net zero transition.
And it’s these questions posed by Fink that business leaders must ask of their organisations too.
Because if the answer is that a business leader is doing nothing, well, to use the analogy provided by Fink above, that company risks going one way only, and that’s the, “same way as the dodo”.
Business leaders, it’s time to change your status quo. Here are five important steps that you can take today to reduce your business’s impact on the climate.
1. Prioritise purpose over profit: Over the last decade, more and more organisations have committed to the purpose over profit model. And, despite initial scepticism, much of the business world has finally awoken to the fact that those who prioritise purpose over cash will financially outperform those who do not have a guiding purpose.
It is clear that organisations can no longer turn a blind eye to the connection between profit and purpose. The rapid rise of stakeholder capitalism means that consumers, employees and investors are more cautious about buying into companies that do not serve the interests of a more sustainable world.
Consumers will spend their money with brands who align with their moral beliefs. And this powerful stakeholder group has no hesitation in forgoing companies who they believe are not pulling their weight. But consumers aren’t the only stakeholder group with buying power. Employees have started lobbying the companies they work at to follow a moral imperative, and indeed, are now punishing those who fail to speak out by taking their talent elsewhere. And in this, the year of The Great Resignation, firms cannot afford to merely pay lip service to ESG matters.
2. Avoid token pledges for true impact: It is no understatement to say that climate change has wreaked havoc in the corporate world. As a result, much of the action taken by organisations has been driven by alarm. And a clear gap has appeared between pledges made and the impact delivered.
This is not the time for a business leader to falsify and elaborate their organisation’s commitment to minimising the impact of climate change. This is the time to focus on the needle-moving actions that will create substantive change.
Because only the impact of the action taken really counts in the fight to tackle climate change.
3. Break it down: It’s clear that tackling climate change is an awfully big elephant to eat in one bite. Not least because the skills and the expertise required in this space are so highly sought after.
In fact, the Financial Times recently reported consulting firms are struggling to develop the skills to meet the demand from clients seeking sustainability advice. In findings – that were not just limited to sustainability – Source Global Research, found that one-in-five consulting firms are turning away work because they did not have the right skills.
As such, the demand for genuine sustainability professionals is undoubtedly outstripping the supply. This means highly experienced sustainability professionals now come with an eye-watering price tags. It’s a problem for firms of all sizes, across all industries because most companies don’t have the inhouse sustainability skills or the budget to outsource.
As Desmond Tutu once wisely said: “There is only one way to eat an elephant: a bite at a time.” Leaders must think about solutions to climate change in the same way. Not with baseless token pledges or by throwing massive budgets at pricey consultants, but through bitesize actions that genuinely move the needle on climate change.
4. Find out where your power comes from: An important step any business leader can take on their quest to reduce the impact of climate change, is to clarify with their energy manager or sustainability manager understands the source of the energy they are using to power their business.
Because, although energy firms are required by law to disclose the makeup of their energy in a Fuel Mix Disclosure (FMD), the rules – or lack therefore – allow them to obfuscate their actual source of power. Which means, in short, that your energy supplier could be misleading you about the makeup of the energy you are powering your business with.
The sad truth is, Britain’s energy suppliers have long been involved in greenwashing practices, which means you and your sustainability team will have to do more legwork to ensure you are being powered with the energy you think you are.
Ultimately, if you really want to display your commitment to tackle the climate crisis and put purpose at the heart of what you do, it is important to uncover bad practices and get to the root of what your energy team is actually buying.
5. Power your business with 100% clean energy: When searching for ways to reduce the impact of climate change, it is important to consider those things that are proven to make a difference. Moving away from fossil fuels and powering your business with 100% clean energy is one of those key things. This is a positive step which is arguably far easier than, for example, trying to get all the carbon out of an organisation’s supply chain.
To be clear here, when we refer to ‘clean energy’, we mean energy derived from natural, non-polluting UK resources that are capable of being replenished on a short timescale, such as wind, solar, geothermal, wave, tidal and hydropower.
In a recent survey we conducted of energy and sustainability managers, we found that more than one-in-four (26%) of sustainability and energy managers admitted that they are not yet committed to powering their business with clean energy. Given the size of the organisations we surveyed – FTSE 250, or equivalent sized companies, and who spend £1 million or more on energy – our results certainly raised alarm bells.Because it’s the captains of industry who we expect to lead the way on clean energy, especially if we are to stand some chance of reaching net zero.
Climate change is, by far, the greatest challenge of our time and requires action by business leaders like you on a monumental scale. Not only will these actions ensure that you can reduce your organisation’s impact on the planet, but they will help you to harness the opportunity and get ahead of your competition.