24 April 2024

Sustainability is now mission critical for businesses

| The European |

To truly mitigate the effects of climate change, organisations need to embed sustainability into their core operations, writes Ash Patel of Avieco

Sustainability first surfaced as a corporate measure a couple of decades ago. However, in most cases it did not consistently translate into tangible action and business leaders were sceptical about incorporating it into their core strategy. 

The scepticism is subsiding. In its place, sustainability is now a management imperative, shifting corporate focus towards achieving tangible long-term viability, alongside organisational ROI. Sustainable management presents immense opportunities for organisations that seek to make a difference and thrive in these challenging times.

The drivers for action are increasing

Sustainability is key for driving both customer and wider stakeholder value. There is a growing demand from investors for companies to act on climate-related issues. This is so they can better identify risks and opportunities in the context of a range of possible future climate scenarios and can invest with confidence in organisations with a proactive approach to sustainability. Consumer expectations continue to evolve too, with an inevitable decrease in demand for products and business services that are harmful to the environment or don’t take battling climate change into consideration.

Workforces around the world are also placing greater emphasis on the need for action, and are increasingly holding employers to account over climate change responsibilities – not just in terms of how an organisation is aiming to be greener, but also regarding who it chooses to work with.

In the US, for example, law firms are under pressure from law students to stop representing businesses in the fossil fuels industry. Each younger generation places a greater importance on sustainability, therefore companies that don’t engage will soon find themselves struggling to attract talent.

Corporate interest in sustainable management is being driven primarily by the upside it offers to investors, consumers and corporations themselves. However, regulations are increasingly mandating climate-related action, with the UK having announced its intention to make TCFD-aligned disclosure mandatory by 2025.

The time to act is now

COP26 is almost upon us. The UK is about to take centre stage in global discussions on climate change policy. While the anticipation for governments and businesses to make ambitious pledges to net-zero was always strong, the expectation is now sky-high, as the Intergovernmental Panel on Climate Change’s latest report underlines. 

With climate concerns becoming integral to everyday life, we have finally seen a step change from businesses and organisations. The UN has described it as the “Race to Zero” – a head-to-head on one of the most important issues of our time. Yet, when we see target dates of 2050 it feels more like a jog than a sprint. And this is emphasised in the IPCC’s 2021 report, where it is estimated that the climate will exceed 1.5°C target set out in The Paris Agreement, even in the lowest emissions scenarios, and as early as 2027 in the worst-case scenarios. When taking climate action, businesses and organisations can no longer afford to take the slow lane – adopting a position that exercises the minimum requirements, with basic regulatory compliance and minimum industry initiatives is no longer acceptable.

Jogging in the middle of the pack, with targets or a strategy in place and aiming to achieve them through enhanced Occupying a middle ground, with targets or a strategy in place and aiming to achieve them through enhanced disclosure and adhering to basic governance, is also not enough given the urgency of the current situation.

To become truly sustainable, businesses must take assertive action – transforming from the inside out to integrate sustainability into the core of the business. This corporate strategy may be more difficult, but will separate the organisations that thrive from those that may not last in the long-term.

No longer a choice

COP26 will be a chance for businesses to showcase their own readiness for the decarbonisation challenge and maximise the opportunities that the transformation will bring. The question for many is how they will make good on the promises they make. This will require setting goals, action-planning, monitoring, reporting and assurance. Any organisation that fails to honour their climate promises will be held accountable. Those that continue to do the minimum will suffer almost just as badly. However, those that act and transition towards a low carbon world will be rewarded with numerous advantages, including greater operational efficiencies, more resilient business models and supply chains, as well as the profits that derive from appealing to a growing market of sustainability-conscious customers. The world is watching. The time for action is now.

About Avieco 

Avieco inspires and empowers organisations to become more sustainable. The firm works with global businesses, government departments and individual communities, to understand their sustainability challenges and create the solutions they need. Avieco’s mission is make sustainability more than just a word.

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