• Sustainability
    • Environmental

A sustainable approach – key takeaways

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Sustainability needs to be at the heart of future planning for all businesses. With the UK government committing to an ambitious target of reducing emissions by 78% by 2035 and achieving net zero by 2050, sustainability is one of the most pressing topics facing businesses today. It presents significant challenges, but also real opportunity according to our panel of experts, including Andrew Griffith MP, the UK’s Net Zero Business Champion, Philip Mitchell of Carbon Intelligence, and Michaela Wright, Head of Corporate Sustainability at HSBC UK. Here’s what you need to know.

Business and society have woken up to the need to play their part in solving global issues. We’re already seeing that those businesses with strong ESG credentials are performing better and are more resilient, so there are clear business benefits.

Michaela Wright | Head of Corporate Sustainability, HSBC UK

1. Why sustainability matters

The UK has made a global commitment to achieving net zero by 2050 and is leading the way in enshrining its commitment to reduce emissions by 78% from 1990 levels by 2035 in law. “Businesses are at the centre of this change,” says Andrew. “Every single business is critical to this and needs to be part of the solution. Businesses need to engage with sustainability, and they need to act now.”

And, says Philip, there are three reasons why businesses are such a key part of the sustainability equation. “Firstly, businesses emit the most carbon, so they need to take responsibility for that. Secondly, it’s because businesses are agile and can enact change far more quickly than global bodies or governments can, and finally, because it’s becoming increasingly important from a competitive point of view – simply, businesses who don’t get on board with this risk being left behind.”

Nor is it just a risk of being left behind that businesses need to consider adds Michaela. “Business and society have woken up to the need to play their part in solving global issues. We’re already seeing that those businesses with strong ESG credentials are performing better and are more resilient, so there are clear business benefits.”

2. Risks and opportunities

Climate change as well as growing awareness and the creation of global targets and government commitments are creating both risks and opportunities for businesses.

“Businesses have started to see the physical risks of climate change in terms of the increasing frequency of extreme weather events,” says Michaela, “but reputational damage from either not setting or sharing realistic targets or failing to meet targets that are too ambitious are also real and can mean losing investors or customers or failing to attract employees or new business.”

But, she states, the opportunities far outnumber the risks: “Committing to a sustainability strategy will increase the value of your brand, it will help you attract and retain employees and customers, it will reduce costs over the longer term and it will future-proof your business.”

“There’s a significant competitive advantage to this,” agrees Andrew. “Many of the biggest companies and the public sector are already signed up to net zero commitments, so businesses that want to work with them need to get on board. Investors are looking at it more closely and it can also of course, drive greater employee and customer engagement.”

3. What net zero really means

Net zero targets, Philip explains, mean working towards achieving zero annual net GHG emissions across your company and your wider value chain. “Many people will have heard of the Science Based Targets initiative, which is a way of making sure that companies can set sustainability targets and validate their net zero targets. It is a growing movement and is rapidly seen as the gold standard for target setting. Importantly, it includes scope 1,2 and 3 parameters, as well as annual assessments of progress and it minimises the use of offsets.”

Standardisation is likely to become increasingly important, says Michaela. “Common global metrics will be key to the sustainability agenda, so we can be assured that whatever we claim is green and sustainable, actually is. There are currently moves to create a global classification system and a global taxonomy, which will improve target-setting and measurement.”

“The Carbon Finance Disclosure regime, for example, has already started for the very largest businesses,” adds Andrew, “and it will trickle down. As that evolves, it will create a new language for businesses, and understanding the carbon cost of processes and operations will become as familiar as understanding financial costs.”

What’s really important is that businesses shouldn’t feel disheartened by the scale of the issue or if they’ve not really started on the journey. The opportunities that sustainability offers businesses are there for the taking.

Philip Mitchell | Consultant, Carbon Intelligence

4. Where to start and where to take your sustainability journey

With our experts agreeing that building a sustainability strategy can feel intimidating and that businesses are often put off by the cost and resource needed, Philip says that focusing on the positives is crucial.

“In order to get started and progress, you have to focus on all the benefits rather than on the costs of becoming more sustainable,” he says. “And there’s so much more evidence of all the benefits – superior revenue growth, reduced risk, lower overall costs, employee retention, greater innovation.”

The process itself, he points out, is “fairly formulaic”:

  1. Set your boundary and baseline – what emissions are going to be included and what you are currently emitting, so where you are and what you’re going to incorporate.
  2. Look at reductions and the alternatives – one example is business travel.
  3. Removals – are there areas or projects you can invest in to take some of those emissions out of scope?
  4. Timeline – be realistic about how long these will take and don’t be too ambitious. “Most businesses are probably looking at 10-15 years plus."

Michaela emphasises the importance of getting started, of interrogating data and of working collaboratively. “Take a look at the UN Sustainable Development Goals and see which are material to your business as a great starting point. Make sure your data is accurate and that you’re tracking the right metrics, and have open conversations with your clients and suppliers. There’s a lot of guidance out there.”

There can be a fear factor in getting started agrees Andrew, but there are some simple steps businesses can take regardless of their size and industry. “One of the biggest ways to abate carbon emissions is to get rid of waste,” he says. “Whether that’s food or materials waste, or switching lights and computers off at night.”

Beyond that, there are four areas that businesses can and should address:

  1. Look at your energy providers and consider switching to a renewable provider.
  2. Look at your building domain and make simple changes like installing smart switches, LED light bulbs or turning thermostats down.
  3. Consider transport – how do your employees get to work? Could you create secure bike storage or install EV charging points?
  4. Review your supply chain – map out the distance some of your supplies travel and see if there’s a more local substitute.

“By slicing the issue down and starting tentatively, businesses can build confidence over time,” he adds.

“What’s really important,” concludes Philip, “is that businesses shouldn’t feel disheartened by the scale of the issue or if they’ve not really started on the journey. The opportunities that sustainability offers businesses are there for the taking. It isn’t too late to make sure you’re not left behind.”

To find out more about how to get your business Tomorrow Ready, visit our hub or for more practical support and guidance to help your business on its journey to a more sustainable future, visit our Sustainability Hub.

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