The latest Intergovernmental Panel on Climate Change (IPCC) report, published earlier this year, issued a stark warning to the world: ‘it’s now or never’ if we want to escape the consequences of global heating. It is imperative that key stakeholders such as governments and businesses (especially in the Global North) answer growing calls to accelerate the green transition if we are to meet the goal of limiting temperature rise to 1.5C above pre-industrial levels.
It is forecast that a sustainable transformation will ultimately cost just a few percent of global GDP, a small price to pay for a big return. And although current reticence amongst businesses is unsurprising given the need to front the cost now, the cost of inaction will be far greater.
The IPCC report found that all sectors of the global economy need to accelerate and amplify their transformations, highlighting a need to usher in new, more sustainable technologies.
Climate Change and Business
All businesses, whether big, small, new, or well-established have a part to play in reducing their environmental impact and working towards a more sustainable way of doing things.
Though the most obvious reason to start proactively implementing changes in favour of more sustainable practices is for the ‘greater good’ or to work towards being a ‘good corporate citizen’, there are also substantial benefits to business to consider:
- Acting proactively and pre-emptively to implement ESG and sustainability practices in your business could positively strengthen your credibility and reputation
- Acting now will mitigate ‘transitional risk’ as governments usher in new legislation and regulations
- Demonstrating a commitment to sustainability can be important for securing key financing and funding opportunities
- Transforming your business now will help secure the future of your enterprise and its longevity through uncertain and turbulent times.
Businesses & ‘Sustainability’
Though the environment is a major part of ‘sustainability’, it’s not the whole picture. Indeed, just as the climate crisis is intersectional, grappling with questions of privilege, class, and race, ‘sustainability’ is a complex concept that extends beyond simply ‘being more environmentally friendly’. Sustainability is also intertwined with issues surrounding human health and wellbeing, gender equality, clean energy, the workforce, the economy, and industry, innovation and infrastructure, as exemplified in the UN Sustainable Development Goals.
In a business context, these themes are all addressed through the concept of ESG. The SDGs relate directly to both the ‘Environmental’ and ‘Social’ aspects of ESG. ‘Governance’ relates to the way in which an organisation or enterprise is run by those at the top, and how they’re acting to implement ESG principles within their business.
ESG as a road to Sustainability
The concept of ESG: ‘Environmental Social Governance’ ties the broader aspects of sustainability together from the perspective of private business. ESG is intimately linked and contribute to the UN Sustainable Development Goals on a Global Stage and the concept of a Circular Economy on a local scale. Put simply, ESG is all about future-proofing your business. By aligning your values and operations with the SDGs, helping to contribute positively to the circular economy, and changing your internal structures to achieve and sustain ESG principles, you will not only be acting ‘for the greater good’, but for the future of your business.
Businesses need to set ambitious, but realistic, targets and establish a robust accountability mechanism. It is essential that commitment to ESG principles extends beyond the surface and becomes an unshakeable part of a business’ core values, approach and culture. Understanding your current performance using our ESG Barometer is a great place to start. By providing key insights into your actual and perceived compliance with ESG, we help businesses to shape their long-term strategy and implement ESG compliant practices to achieve sustainability.
Get in touch to find out more about how to get started with ESG barometer.