Finance Monthly - May 2022

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 transformationwill 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. In 2021... 153 countries strengthened existing or made new emissions targets 137 countries pledged to end deforestation by 2030 100+ countries have committed to reducing methane emissions by 30% by 2030 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. Finance Monthly. Ea r t h Da y 2022 15

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