What are the world’s most sustainable companies doing right? How can leaders focus on climate action in their organisation? We take a look.
Employers today have many responsibilities and must keep on top of them if they want to attract the best talent. More than ever, skilled professionals want to work in jobs they are passionate about and for companies their values align with. For many, sustainability and climate action are high priorities.
Last year, Lauren Compere of Boston Common Asset Management highlighted five sustainable business trends to watch. They were climate transparency, the circular economy and resource efficiency, overcoming the ‘we would if we could’ excuse, better digital human rights and workplace equality.
But that was before Covid-19 hit and threw the world into disarray. After a turbulent year for businesses in every sector, is climate action still a priority? Accenture’s Karen O’Regan is hopeful.
Companies have an opportunity to imbue their Covid-19 recoveries with greener practices, she told us, putting long-term sustainability over short-term financial returns. So, what steps are business leaders taking now to secure a more sustainable tomorrow?
The world’s most sustainable companies
Paying attention to best practice is key and a good starting point is to look at businesses already taking climate action.
The Global 100 from Canadian research and media firm Corporate Knights ranks sustainable companies around the world with revenue in excess of $1bn. Topping the list in 2020 was Ørsted, a renewable energy provider based in Denmark.
According to Forbes, Ørsted has set a precedent by leaving fossil fuels behind and investing in offshore wind power. This helped the company reduce its carbon emissions by 83pc.
Ørsted developed 20 different sustainability programmes, including a decarbonisation initiative to help the company become coal-free by 2023. Its offshore windfarms already deliver green power to more than 13m people, and the plan is to grow that to 50m by 2030.
Almost half of the companies that made the top 100 are based in Europe, with Dublin-headquartered Accenture coming in at number 20.
“The big takeaway when looking at Ørsted and the other companies doing well is how fast the pace is speeding up in terms of the growth in green, clean markets,” Corporate Knights CEO Toby Heaps said at the time of the report’s release. “In this age of climate and carbon constraints and an emerging climate economy, these companies are positioned to succeed.”
Corporate Knights noted that the companies included in the 2020 Global 100 represent a wide range of sectors, from aerospace and apparel to wireless telecoms groups and wholesale power companies.
The largest sector was financial services, with 18 companies including 12 banks appearing on the list. Corporate Knights said this suggests that investors and lenders are more advanced in their understanding of how taking sustainability issues into account can help their business performance.
Chinese electric car maker BYD and Hong Kong’s Vitasoy were new entrants on the 2020 list – which, according to Corporate Knights, shows that “while the world’s largest economy lags behind European and North American nations on key sustainability metrics, environmental, sustainability and governance issues are starting to gain traction where it will matter most”.
Setting actionable targets
Like O’Regan, PwC’s Kim McClenaghan believes there’s plenty to learn about climate action from the global response to Covid-19. McClenaghan, who is the firm’s technology and sustainability partner in Ireland, says the pandemic has changed people’s attitudes and business norms, but the onus will be on company leaders to set the targets that will ultimately reduce carbon footprints.
“Many companies are turning to science-based emission-reduction targets to define their carbon reduction ambition, with reference to the goals set under the Paris Agreement,” he says. “These set out to limit global warming to well below 2 degrees Celsius above pre-industrial levels, and pursue efforts to limit warming to 1.5 degrees Celsius.
“As companies look to rebuild, it will be important to future-proof business models and, where possible, take learnings from our experiences of dealing with Covid-19.”
This will require harnessing business model disruptions with technology at their core, he adds. “Covid-19 has rapidly disrupted business norms and created new preferences and practices that, if sustained, could also lead to direct emissions reductions.
“These could include remote working and increased digital social connecting, nearshoring and regionalising and nationalising supply chains along with 3D printing, which would usher in a new mantra of ‘make where you sell’.
“Across the board, these could deliver sustained reductions in transportation demand and associated emissions. In addition, the accelerating automation of production lines that the retail sector brought about to enable business continuity during this crisis will also deliver emissions reductions.
“Moving towards zero carbon will enable businesses to adopt strategies and create products and services based on the true cost and true impact of climate change.”
Empowering your people
Covid has made it clearer than ever that businesses would be nowhere without their people. Involving them in conversations around climate action will be crucial going forward, says Workhuman’s vice-president for environmental, social and governance, Kevin Mullins.
“The health of our planet and humanity is at stake and requires everyone to play a part. Governments cannot bear this burden alone,” he says.
“Companies have a responsibility to fully understand the global impacts of their activities and actions. This starts with determining their environmental footprint, taking the appropriate steps to minimise their impact and seeking ideas and approaches that will be sustainable in the long term.”
The steps Workhuman has taken so far aim to achieve carbon neutrality while promoting a “less impactful, more ethical relationship between business practices and the environment”, Mullins says.
In 2020, the company became a charter member of the Sustainable Business and Enterprise Roundtable, which provides advice and support services for companies working towards greater sustainability.
More recently, Workhuman launched a new employee resource group for sustainability. This group will drive sustainability ideas and actions across the wider company.
“Sustainability is strongest when conducted as part of a wider community, leveraging the reach and power of collective, like-minded people and companies,” Mullins adds.