Beyond net-zero targets: What role can businesses play in solving the climate emergency?
Recent months have seen the numbers of businesses committed to net-zero climate targets expanding exponentially. But beyond these long-term, high-level ambitions, how can firms of all sizes and sectors deliver change on the ground?
That was the key discussion point for speakers on the first plenary panel at edie’s virtual Sustainability Leaders Forum (scroll down for details), featuring senior representatives from Unilever, Kimberly-Clark, Nespresso, Anglian Water, the World Business Council for Sustainable Development (WBCSD) and session sponsor Centrica Business Solutions.
Kick-starting the conversation, Futerra’s co-founder Solitaire Townsend, who was chairing the discussion, asked panellists what the biggest solution mechanism is in the private sector’s response to the climate emergency.
Terms floated by audience members ranged from circular economy solutions, to consumer engagement campaigns, to specific low-carbon technologies. But panellists ultimately agreed that there are “no silver bullets” and that businesses have a responsibility to act on multiple priorities in tandem, deploying all solution mechanisms possible.
Speakers repeatedly highlighted the importance of collaboration and of embedded models of sustainability to delivering a holistic response to the climate crisis at an appropriate pace and scale. On the former, Anglian Water’s chief executive Peter Simpson offered a behind-the-scenes look at the process of co-developing a roadmap to net-zero by 2030 for the UK’s water sector – and at the results this activity has already generated.
“Increasingly, the more we adopt that model where we share between companies what the opportunities are to make a difference, the more we learn,” Simpson said, outlining opportunities for unlocking innovation by streamlining R&D costs and engaging new groups across the value chain.
On the latter, the WBCSD’s managing director for climate and energy, Claire O’Neill (nee Perry), said: “It’s not enough to have a standalone sustainability operation. The best companies embed sustainability in their business units…. It isn’t just a standalone, consultative function; it needs to be business-as-usual in everything we do, from our management, to our information systems, to our compensation structures.”
O’Neill also emphasised the importance of following up net-zero targets and other lofty, long-term goals with regular and transparent reporting on progress. For example, the Task Force on Climate-related Financial Disclosures (TCFD) surpassed 1,000 supporters globally in 2020, and numbers will likely shoot up as nations including the UK beef up reporting mandates. But progress adopting the recommendations in full remains mixed and investors are warning laggards that they will run into more difficulties in the coming years.
Kimberly-Clark’s president for the EMEA region, Tristram Wilkinson, agreed. He added: “Beyond external collaboration…we need to get the whole organisation collaborating [internally]. We have very big companies on the call today that have some 100,000 employees and there’s so much power and capability in those teams to create a lot of change.
“Often, I think we get very focused on big moonshot innovation and massive moves. These do need to be made, but also, there’s a myriad of smaller things that can be done through enabling and empowering the wider organisation.”
The evolving role of the CEO
Collaboration and embedded sustainability, as topics, have been raised countless times at edie events and during interviews in recent years. But with the unique opportunities posed by the snowballing global net-zero and green recovery movements – and the sheer scale of the economic risks associated with inaction – panellists also honed in on the role of board-level executives in developing and delivering sustainability strategies.
Speakers agreed that, at present, there is a trend towards CEOs co-developing long-term goals and the necessary alterations required in the business strategy. Nonetheless, there was an acknowledgement that top-level announcements must be followed up with action on the ground.
“The thing that gets the ball rolling for many companies is CEO conviction,” O’Neill said.
“The challenge is to break the inertia that does exist in some organisations and, to do that, definitely, the big top-down commitments and ambitious goals are critical,” Wilkinson added. “But really, that’s just the beginning and on it’s own won’t achieve much. You must also wire the organisation to work bottom-up.” For multinationals, this means ensuring that every function and brand knows how it can contribute to central goals.
Anglian Water’s Simpson provided advice for engaging such professionals. He said: “In my experience…. Businesspeople tend to be convinced by other businesspeople showing them examples of what can be done, as opposed to, frankly, academics or blue sky [innovators] or anyone else.”
As well as case studies, Simpson said that most executives know it is “not really an option to ignore” groups that pay their bills and salaries – their investors and consumers – indefinitely. As such, they will respond well to primary or secondary research on changing sustainability expectations. Executives may also be swayed by opportunities to unlock innovation, bring new talent on board, improve retention rates and access new streams of capital. Anglian Water has, for example, raised more than £1bn through green bonds to date.
A seat at the COP26 table
Building on talk of boardroom buy-in, the discussion turned to the ways in which businesses can get buy-in from policymakers in the run-up to COP26 this November.
O’Neill admitted that while conversations and collaborations between government departments and businesses have improved and multiplied as the UK continues to develop and deliver its economic response to Covid-19, there have been difficulties historically. She also emphasised the limitations of the private sector’s direct involvement in COP outcomes.
She explained: “The COP does not have a place to bring this private sector ambition as part of its core negotiating function. Our job is to use the amplitude of the COP moment to bring these private sector solutions and to collaborate very well with government.”
Providing specific advice for listeners in the private sector, she added: “The more you can collaborate, the better. There are obviously many traditional industry groups but, sometimes, forgive me, they come across as simply lobbyists…. When industries get together and work with their supply chain, then we can have a much more nuanced conversation.
“Come to [politicians] in a joined-up way with some very specific asks and make the case by showcasing the opportunity. We always talk about the pain and the cost.”
These actions, O’Neill said, assisted the creation of the Offshore Wind Sector Deal. Industry players have agreed to invest £250m by 2030, under the deal, in exchange for participation in £557m of state subsidies for renewable energy. Since the Deal was finalised in 2019, BEIS has slashed its forecasts for offshore wind energy costs through to 2030 by more than half.
There’s still time to join the conversation at edie’s Sustainability Leaders Forum
From Tuesday 2 to Thursday 4 February 2021, edie’s award-winning Sustainability Leaders Forum event is returning in a brand new virtual format. This year, we are delighted to bring you speakers including former Energy Minister Claire O’Neill and World Green Building Council CEO Christina Gamboa.
This event will allow you to be connected with peers via face-to-face via video chats; be inspired by high-level keynote talks from industry leaders; be involved in a series of interactive panel discussions and live audience polls; and be co-creative in our interactive workshops, whilst also meeting leading technical experts in our dedicated virtual exhibition zone. Rooms, expo booths, private chats, bespoke stages and backstage passes – it’s all possible.
For a full agenda and to register now, visit: https://event.edie.net/forum/
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.