Once again everyone’s favourite lip service summit is back. World leaders and experts have been gathered in Sharm El-Sheikh, Egypt to discuss the climate crisis for the past thirteen days with, so far, not much success. As it is unlikely any impactful outcomes will result from COP27 and time is running out for climate action, at Jump we are asking: how can businesses take climate action?
A summary of COP27 so far
Progress has been slow throughout the week and an unimpressive first draft was published yesterday. NGOs have expressed frustration at the document’s lack of urgency and failure to call for a phase down of all fossil fuels, with Greenpeace International’s COP27 head of delegation, Yeb Saño, calling it an “abdication of responsibility”. The first draft also fails to include details of launching a ‘loss and damage’ fund for developing countries that are going to be hit the hardest by the climate crisis, a key topic that has arisen at the conference. Only the European Union have agreed to setting up a fund, while other countries with large carbon emissions are yet to pledge their support. The document will be redrafted and finalised over the coming days, but it is a clear indicator of what is to come: not enough.
As things currently stand, COP27 has confirmed what many of us already know, we cannot rely on world leaders to take sufficient and timely action to curb the climate crisis. We must now ask, what can the rest of us do to play our part? This blog takes a specific look at what Businesses can do to take climate action.
What the climate crisis means for businesses
As the climate crisis worsens it will inevitably impact, if not totally collapse, supply chains. The increase in extreme weather events will impact supply chains globally, with a direct impact on 70% of all economic sectors worldwide. The most common ways climate change will impact businesses are:
1) Operational issues: such as workforce disruption and damage to facilities.
2) Lack of and cost of resources: food, water, and energy will be scarce.
3) Political uncertainty and changing regulations.
4) Increased insurance costs.
5) Reputational damage.
Some businesses are already experiencing these effects, indicating that action to curb the climate crisis is now in the private sector’s best interests. Below we go into the best ways businesses can take climate action.
How businesses can take climate action
Education
The first step in taking climate action is education. Invest in ensuring everyone in your organisation is carbon literate, from the top down. Use this education to reimagine your vision and mission, inform all future decision making, and to create a science-based strategy to mitigate emissions and manage risks. To put it simply: create a culture of sustainability within your organisation that permeates all areas of business. Keep people engaged by regularly taking time to promote your new sustainable vision and mission, as well as incentivising engagement in your sustainability strategy.
Decarbonisation
A global scaling down of fossil fuels may not be happening as a result of COP27, but this doesn’t mean businesses should shy away from decarbonisation. Switching to renewable energy means that businesses are using their purchasing power for good, improving their reputation, and protecting themselves against potential future legislation changes or fuel shortages. Decarbonising your value chain by targeting scope 3 emissions is also essential, this means choosing green suppliers for all areas of your business, from ICT to catering.
Transparency
In today’s globalised world, sharing information between supply chain stakeholders is key to knowing the true environmental impact of conducting business. As supply chains often cover a range of countries and continents, it can be a challenge to keep track of sustainability measures. For this reason, businesses should invest in supply chain traceability solutions. However, for supply chain traceability solutions to be effective they must have accurate data inputting from various stakeholders within the supply chain. Reward power in business-to-business relationships is a way to achieve this trust and collaboration from suppliers. This refers to creating desired behaviours by incentivising stakeholders to comply with your sustainability requirements, such as offering longer contracts. You can read more about influencing stakeholders by using various types of power in this report.
Collaboration
Ultimately, what all the above points come back to is collaboration. To quote John Donne:
“No man is an island entire of itself; every man is a piece of the continent, a part of the main.”
This is even more true of businesses. Without getting everybody from employees to stakeholders behind your sustainability strategy there will be no impact and no sustainable growth. Collaborate with others in your industry by sharing best practices and partnering up in your sustainability efforts. It’s important to remember there is competition in the climate crisis – it is all of us against our uncertain future.
The benefits of taking climate action
Increased profits
Businesses that invest in sustainability increase their profits by operating more efficiently, reducing overhead costs, and increasing sales through an improved public image. Deutsche Bank reviewed 56 academic papers and found that businesses with the highest ESG ratings have lower debt and outperform competitors in both the medium and long term (three – ten years). You can read the review here.
Recruitment & retention
Sustainability is increasingly becoming a top consideration for those in the job market today. Deloitte surveyed millennial employees and found that 45% would look to change jobs if their company didn’t have adequate sustainable business practices, while 44% would leave negative reviews for their company if they had poor sustainable business practices. While they have also stated that Gen Z wants employers to be good global citizens, who focus on sustainability, diversity, and positive societal change. Ultimately this means that employers who listen to these desires will have better retention as employees will feel listened to and cared for, and better recruitment opportunities as socially conscious businesses are in demand.
Continuity
Adopting sustainable practices ensures the continuity of your organisation as it protects it from and prepares it for what is to come, whether that is resource shortages, new regulations, or increased fossil fuel costs. Implementing a science-based sustainability strategy now will protect you from what is inevitably coming and improve your public image and profits which will also allow for continuity.
To summarise
The lack of collaboration and results from COP27 so far have been disappointing, which makes a stronger case for businesses doing what they can for the environment and for themselves. Sustainability is the greatest crisis of modern times and employees know this and want to see employers making big commitments to creating positive change. There is an endless amount more that could be said on the topics of business sustainability and engaging people in it, so if you enjoyed this blog and want more content on these subjects, join our mailing list.
