Earth Day 2022: How Businesses Can Do More to Help Tackle Climate Change
‘Invest In Our Planet’ is the bold call to action for this year’s Earth Day. Historically, Earth Day is a moment in time to call on businesses, governments, and individuals to work together to help solve the climate crisis. However, this year there is an undeniable focus on the role of businesses as the leading agents of change and how they can be the true enablers of sustainability. Without the backing of businesses, big and small, there is little hope for the kind of transformative change needed to help mitigate the worst effects of climate change.
Climate crisis: a year in review
When we reflect on the year just gone by, it remains clear that the world is still not taking the steps it needs to prevent and mitigate climate change. The worrying symptoms of the crisis are being felt across the world, from torrential rainfall in Malaysia to wildfires ravaging the mountains of Greece. The evidence is incontrovertible. Despite the devastation caused by climate change, political and business leaders have been working to turn the tide on the crisis. The three reports released by the IPCC throughout 2021 and into 2022 have all been clear - we all must play a part in tackling the crisis. Just recently, the IPCC released their starkest warning yet, which suggested that we were reaching a point of no return and that if we are to stave off the worst effects of climate change, we would need to significantly strengthen existing targets.
2021 was a big year for climate action, which is the result of an established trend in which climate change has become part of the public consciousness. Each year more people are recognising the devastating effects of climate change – according to a study in the Lancet, for example, more than 60% of young people are 'extremely concerned about climate change'. Alongside an increase in a public outcry for climate change, 2021’s long-anticipated COP26 summit also struck a chord with the public – with commitments made by world leaders being criticised for not going far enough.
However, it would be remiss to ignore the important steps international leaders made to help achieve our shared objective of keeping the planet's warming below 1.5C. For example, 153 countries strengthened existing or made new emissions targets; 137 countries pledged to end deforestation by 2030, and more than 100 countries have committed to reducing methane emissions by 30% by 2030. While further action is needed, the work achieved in Glasgow has kept the 1.5C goal alive.
Encouraging corporate decarbonisation: time to change tactics?
Now that political leaders have come together to double down on decarbonisation targets, the time has come for public authorities to design bold policies to tackle climate change. At the same time, businesses have a crucial role to play in decarbonising as fast as possible to prevent global warming and stay relevant. Many companies are already rising to the challenge. For example, in March of 2021, 30 of the UK's biggest companies signed up to the United Nations Race to Zero campaign and many have been making good on their commitments. For example, both BT and Vodafone reached their goal of powering 100% of their UK network by renewable sources, while AstraZeneca more than halved their greenhouse gas emissions (scope 1 and 2).
However, while more than 1,000 companies, including 82 Global Fortune 500 companies, have announced Net Zero targets, committing to ambitious goals is far from enough to accomplish a meaningful sustainability transformation and a significant reduction in global emissions. There is great momentum in setting targets but achieving Net Zero implies a transformation journey far beyond the incremental change most companies are accustomed to.
Engie Impact’s own research shows that while several companies have set goals, few have proposed a detailed strategy to reach them. I don’t believe that the lack of planning and foresight is a reflection of their attitude to climate change. It instead highlights the complexity of overhauling the existing setup. It is, undoubtedly, a huge challenge, but businesses must not bury their heads in the sand. Technology, skills and knowledge on sustainability are available and advancing rapidly – it's in a business’s best interests to adopt them and tackle climate change head-on.
To encourage businesses to design and implement effective decarbonisation strategies, we must look beyond the method of attempting to force companies to change through government legislation. The recent introduction of mandatory climate risk reporting in April should inspire more companies to get their sustainability house in order. The regulatory pressure will only increase.
However, while new regulations are essential, they are not a silver bullet, so companies must recognise the tremendous value in introducing sustainable business practices. Ultimately, it is in their best interests to invest in sustainability transformation. Those companies that engage in sustainability transformation will improve their bottom line as they reduce costs, by consuming less, unlock new revenue streams, retain and attract the best talent, create a competitive advantage compared to their peers, increase client loyalty, be financed through cheaper capital etc. And on top, they will help mitigate the effects of climate change.
Looking back … and forward
Since the last Earth Day, the spotlight on climate change has gained further momentum, with more of the world's largest companies announcing ambitious Net Zero targets and investing in their sustainability transformation. Meeting these targets will not be easy, but the good news is that investing in sustainability has become cheaper, with companies now able to take advantage of funds allocated for sustainable projects and a significant reduction in the cost of technologies. These changes have also coincided with advancements in sustainability digital platforms to enable a seamless transformation at enterprise scale. Businesses can now leverage data to simulate precisely how much carbon they can reduce by implementing new internal processes, saving time and enabling companies to expedite their journey to Net Zero.
Sustainability transformation is not a choice, it is a business imperative. Companies that refuse to invest in sustainability transformation will quickly become irrelevant as consumers opt for their greener competitors. While Earth Day continues to shine a positive spotlight on sustainability each year, the fight against climate change is happening every second of every hour. We still have a chance to win the battle, but the time is NOW.
Mathias Lelievre is the CEO of ENGIE Impact.