Climate change is a significant challenge facing businesses today, and the impacts of climate change are already being felt across many industries. As the world continues to warm, businesses must adapt to the new reality of a changing climate and demonstrate to stakeholders and customers that action is being taken. Longer term strategies for business will include the need to develop adaption plans to deal with the impact of climate change. In some industries this could be fundamental to business survival as supply chains alter in line with local climatic warming such as agricultural seasons shifting or crop yields decreasing.
Right now, the direction of travel is clear. The UK setting a target of net-zero by 2050, and the subsequent flow down into local government and public sector organisations, is demanding suppliers to demonstrate how they are going to meet this target. Public Procurement Policy Note 06/21 sets a requirement for any business bidding on public contracts above a threshold contract value to publish a Carbon Reduction Plan. At WRM we have seen this requirement set at well below the threshold contract value with contractual mechanisms applying financial penalties against contract payments where emission reductions are not met. The importance of this approach is that organisations calculating their carbon footprint will require data from suppliers to compile their emissions inventory. This flow down of data reporting quickly expands up and down supply chains, demanding that all businesses calculate their own footprint and/or the footprint of their goods/services.
Of course, sustainability is much more that just carbon emissions. Indeed, the three pillars of sustainability (environmental, social, and financial) have long been identified as being interconnected. From this principle, ESG (environmental, social and governance) reporting took hold and has developed into a mandatory requirement for large private companies with more than 250 employees and a turnover of more than £36m. Smaller businesses should still seek to explore these pillars, even if the reporting under a defined framework is not required.
The sustainability space is large and growing all the time with reporting requirements, standards, and accreditations such as B Corp growing in popularity. Navigating this space can be challenging to cut through to what is important for your business. Just like with other areas of business focus, establishing a sustainability strategy is an often overlooked, but vitally important step. At WRM we have been helping businesses to develop a strategy that provides clarity on why, what and by when to ensure that each business has defined goals and objectives that align to internal and external stakeholders.
For any business considering how to approach sustainability, we advise that at a starting point, the following core activities will really make an impact and get you moving in the right direction.
- Strategise – identify the rationale behind targets and objectives;
- Calculate – understand current performance and establish your baseline emissions data;
- Explore – define what is possible now, and what requires further assessment;
- Act – implement short term wins and assess longer term opportunities;
- Report – publicise your strategy and annual performance.
Sustainability is a long term, evolving journey, not a single step tick box. To reap the business benefits, sustainability must become integrated into daily working practices and should be recognised as a journey without a finish line.
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