Climate change poses a very real and imminent threat and will inevitably impact all our lives. And it’s not just the natural environment that will be impacted. Climate change will have a significant impact on society-at-large, The World Bank has predicted that climate change could drive 100 million more people into poverty. As a result, consumers are increasingly looking for environmental credentials before committing to purchases.
With COP26 coming to a close, the issue of Net Zero is likely to be front of mind of many business owners. With such a large array of information available, it can be hard to know where to start. We spoke to Paul Atkinson from environmental consultants Green-Works to help get some ideas.
Why is it important for a business to evaluate its sustainability and environmental impact? For society to achieve the climate change ambitions set out in the Paris agreement of limiting warming to 1.5 degrees of pre-industrial levels all sectors must play their part. Governments are increasingly putting in place legislation, taxes and green incentives for businesses. Awareness among consumers has increased thanks to the David Attenborough effect and many now demand that businesses offer more eco-friendly products. If environmental protection and carbon reduction is not a priority for your business or for you personally, it is still an operational topic that should be addressed to ensure you that you are not left behind. Net zero is currently an optional strategy, but it is a matter of when, not if, it will become a legal obligation and so getting a head start is highly advisable.
What are the first steps we should consider when looking to address these issues? Firstly, a business should look at its full operations or value chain and ascertain where they think the biggest area of their footprint or environmental impact lies. They should also consider what risk climate change poses to their business model around areas such as legislation, supply chain and future product demand influences. For example, could a carbon tax influence your costs or will rising sea levels contribute to price hikes for raw materials. Once this is done, they can look at what is easy to change quickly and what needs more of a long-term plan.
Is it going to be expensive? Not always, many easy wins are actually cost saving or efficiency changes that make sense even if not considering environmental impact. Green energy and transport solutions are becoming more affordable and will soon be cheaper than conventional alternatives, especially if you make use of government incentives. For most businesses it will be cheaper long-term to reduce carbon emissions now and play their part in limiting warming than any adaption costs to cope with the effects of climate change.
What does getting to net-zero actually mean? We essentially need to balance the amount of man-made carbon emissions with the Earth´s ability to sequester (remove) carbon through natural and artificial sinks. This should be done by reducing the carbon produced and increasing the amount of carbon absorbed, either through natural carbon sinks such as forests or technologies such as carbon capture and storage. As businesses, the main area we can influence is the first of these by looking at ways to reduce our carbon footprint.
There’s lots of impacts outside my direct control – what should I do in these circumstances? No business can tackle these challenges on its own. Collaboration with stakeholders (or partners) is a key step to reducing the overall impact of the product or service across its whole value chain. In the short term, work with suppliers or downstream businesses to also adopt carbon reduction strategies through partnerships or contracts. You can also choose to work only with businesses that share your values and climate ambitions. Be vocal about what you are doing, simply sharing your story can engage, educate and perhaps even inspire your staff and customers.
I’ve heard of off-setting – is this not the answer? Off-setting is a tool that can be used over the short-term for emissions that are genuinely unavoidable or as a temporary transition solution whilst other forms of mitigation are implemented. Off-sets should not be seen as a way to continue “business as usual” and simply paying to make things look better to consumers. Any off-set program that is used must be evaluated for its credentials, for example ensuring it is permanent and doesn’t have negative social implications. Systems that remove carbon should be preferred over those that mitigate or reduce future emissions.
Do consumers really care about this type of information? With the media attention and focus on events such as COP26 this issue is certainly gaining momentum. A recent study by Deloitte (2021) found that the majority of consumers are now making changes to adapt to a more sustainable lifestyle. Avoiding single-use plastics is still the most common change consumers have made. Ethical and sustainability issues are a key consideration for 1/3 of consumers, who claim to have switched brands as a result. Lack of interest, price and lack of information are the main reasons holding some consumers back. Sustainability is also an important factor in attracting and maintaining employees – with top talent increasingly making employment decisions based the social policies of a business and not just the paycheck.
What information and help is there available to SMEs? There is a lot of information out there but admittedly it can be confusing. For most businesses, the UK Government´s business climate hub is a good place to start. If you want to get more technical around carbon calculation, then the Greenhouse Gas Protocol website has free tools and calculators you can use. Of course, some of this can be very time consuming and complex and so that is why many SMEs chose to engage with consultants such as Green Works to guide and create strategy and action plans around the relevant topics
Is there a roadmap or framework I should follow? To understand the reductions relevant to your specific industry take a look at the Science Based Targets Initiative. It takes into account that some industries will be able to reduce their emissions more than others and offers for different industries.
At Green Works, we have developed our own framework to take you to net zero and we would be happy to walk through this with you during a free 1-hour discovery call.
So, if I decide to just do nothing, will it really matter? As one of richest nations on Earth we must see the big picture of our collective actions, both historic and future. The scenarios set out by the IPCC on what would happen in a world with over 2 degrees of warming are stark and devastating to all life on the planet. Climate change affects everyone and will make the disruption we have seen with the Covid-19 pandemic appear insignificant. We are already seeing the effects of climate change, here in the UK and in Europe: more extreme weather events, flooding, storms and heat waves in summer, devastating wildfires. Climate change is no longer something that only affects other people or distant countries. We have also witnessed in recent weeks the effects global supply issues have on prices, but these will be just the tip of iceberg compared to what’s ahead. So yes, what you do does matter.
About SWIG Finance
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