Three areas of focus for business and sustainability during 2017
I’ve not set resolutions this year. However, this year I have decided that I’d like to not take certain things with me into 2017. I’d like to leave the negative aspects of 2016 behind and focus on the now.
This particularly resonates for me when I think about climate change. So much was achieved in 2016 – ratification of the Paris Agreement and the ongoing march of renewable energy as an economically competitive energy source – but sometimes other events overshadowed the good news.
There were obviously challenging moments in 2016 too – it was the hottest year on record and extreme weather events continued – but I think effort is best spent in doing all we can to move things forward.
With that in mind, here are three elements of 2016 I’m leaving behind and three areas to focus effort for 2017.
1. Political uncertainty
Many of us entered 2016 with positivity and optimism: the Paris Conference of Parties (COP 21) resulted in a multi-lateral commitment by hundreds of countries to work towards managing the risks of climate change. Then: Brexit, Trump, uncertainty. There is uncertainty about what the future may hold for carbon targets and energy legislation.
BUT! What we must remember is that the UK has its own legally binding carbon targets (80% greenhouse gas emissions reductions by 2050 versus a 1990 baseline) enshrined in the Climate Change Act. We are on track to meet these thanks mostly to the work done to green the grid.
We can’t lose momentum in moving towards achieving the UKs carbon targets. The focus for 2017 will be on increasing the contribution made by businesses, raising current levels of ambition so they are consistent with UK targets.
2. Sustainability as an afterthought
Assessment and disclosure of environmental risks to companies is often only considered as an afterthought even though it falls under the fiduciary responsibility of company Directors. To continue to be successful and fulfil obligations to shareholders, companies need to consider the risks and opportunities of climate change and embed these in their business models. Our 2016 research into the Sustainability Reporting Performance of the FTSE 100 showed that 48 companies publish environmental and sustainability KPIs in their annual reports beyond the mandatory requirement. I’d expect more from the largest listed companies in the UK.
So its hugely encouraging that The Financial Stability Board (FSB) recommended through its Taskforce on Climate-Related Financial Disclosure (TCFD) that companies based in G20 nations adopt a range of best practices to report on environmental risks. This is big. The aim of the taskforce’s recommendations is to shift reporting of climate risk to financial disclosures and provide a global standard to ensure companies are reporting information at board level. Making this readily accessible to investors allows understanding of climate risk in investment decisions.
Helping businesses to identify which sustainability issues are business issues, and manage and report them to all stakeholders will be a key focus area for 2017.
3. Impatience at the rate of change
2016 was the warmest year since records began. The Antarctic experienced unusually low ice towards the end of 2016, while Arctic temperatures were up to 30 degrees Celsius above seasonal average. Etc. etc. These kind of headlines can cause despair. But rather than panic, I think that perhaps we should feel a sense of urgency and need for action that helps drive the pace of change.
From our offices in London we continue to have conversations with leading businesses looking to achieve more when it comes to managing their environmental impacts. From setting greenhouse gas emissions targets based on the science of climate change to commitments to purchasing 100% renewable energy, the trajectory of change is moving in the right direction.
For 2017, the focus must be on recognising and celebrating the momentum building and the action taken by leading companies. Highlighting how these businesses have worked to overcome challenges, achieve internal buy in and worked in collaboration with stakeholders will help bring others along on the journey to do more, quicker.
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