Businesses must 'build resilience' through mandatory carbon reporting
As the mandatory carbon reporting regulation comes into effect this month many businesses could be missing an opportunity to safe-guard their operations, says Martin Baxter.
Speaking to edie, Institute of Environmental Management and Assessment's (IEMA) executive director of policy, Martin Baxter, says the environment is changing the business dynamic.
Companies must realise that access to resources will constrain the ability to operate effectively and efficiently in the future and this awareness presents an opportunity for businesses to future-proof operations.
"A business can use this knowledge to help build a more resilient organisation against some of the more frequent climatic-related events," he says.
From flood-affected global supply chains, to drought-exposed raw material prices, environmental risks are starting to have much more tangible impacts on a company's long-term potential success. Ultimately, boards of directors need to start thinking about this now and take the longer term perspective.
In terms of a business' success, understanding what the corporate world might look like in years to come is a vital, albeit challenging, step to ensuring carbon reduction mechanisms, such as a reporting system, work over the long-term.
This approach will differentiate those operating successfully from those struggling to keep afloat and it will essentially come down to companies that can withstand the changing dynamics of business through increased volatility from climate change.
"Organisations should be thinking about what sort of environment they may be operating in in 2025 and how well they are positioned to operate in that environment. This needs to set the context of today's decision-making to inform the direction of the business and therefore the metrics for measuring success," says Baxter.
Long-term vision is therefore crucial, says Baxter, when setting up systems to record, manage and report greenhouse gas emissions, and will be essential for businesses to attract investment and protect their own investments.
Read more on how businesses could be using mandatory reporting to future-proof operations