The effort required to overcome severe global challenges has been exposed
The significant cost of failing to act against serious, global challenges has been starkly illuminated by the pandemic. The World Bank expects that 92.9% of economies will endure recessions during 2020 and beyond, with global GDP shrinking by 5.2% – 7% in advanced economies. The social cost has been severe for all.
Together, COVID-19’s impacts are an eye-opening reminder of the speed and magnitude of harm that massive and brutal events can inflict on the global system, particularly when resilience is lacking. However, it has also shown that urgent, concerted action is both possible and effective, and that when coupled with a high degree of preparation, governments and companies can meet public expectations and earn their respect.
It’s crucial you learn from the pandemic if you want to improve your future crisis readiness, and no impending crisis is as serious as climate change. A Carbon Brief analysis of studies into extreme weather events and trends shows that 69% were made more likely and severe by human-caused climate change, and European national science academies warn that the frequency of destructive weather events is significantly increasing.
Climate change will be destructive, disruptive, and costly, regularly threatening global social, economic, and environmental systems over the very long term. Analysis from The Economist Intelligence Unit (EIU) in 2019 predicted that, due to a lack of climate resilience, the global economy will be 3% smaller in 2050 than it otherwise would be; a $7.9 trillion cost.
Even during the pandemic, you should be mindful of the part your company must play in building resilience. Failure to prevent climate change’s effects will not only harm your profitability and appearance in the eyes of ever-more climate-conscious consumers and prospective employees, but the global systems on which we all rely. Thankfully, however, the pandemic has shown action is possible, and we already understand the causes and effects of climate change (unlike the virus). The solutions already exist; they simply require the will to disrupt.
Businesses are facing broader and greater calls for sustainable action
Appetite for sustainable action is accelerating across multiple fronts; it is crucial that you listen and adapt to these drivers so you can position yourself to ensure the continuation and growth of your business.
Driven by generational trends and greater publicization of climate change and its causes and effects, consumers are demanding products with smaller carbon footprints and a greater range of locally sourced goods. This is being accelerated by COVID-19, as consumers become mindful of the effect globalization has had on the virus’ spread.
Major French grocery retailers, for example, have given priority to French fruit and vegetables during the pandemic, all while considering increasing consumer frugality when pricing these local, seasonal goods. It’s crucial this kind of action lasts beyond the pandemic.
Similarly generational in its nature, employees are expecting greener working environments and company-wide sustainability efforts that go beyond token measures and align with their values. Peakon’s 2020 Employee Expectations Report, found that employees’ environmental expectations have increased by 52%, with environmental discussion rising by 128% among Gen Z employees and 600% in the manufacturing sector.
Pandemic-hit employees are also adapting to new remote working standards, and many demand this continues post-COVID as they reflect on the benefits of reduced commutes and improved environmental quality during lockdown.
It’s essential you meet these expectations with real policies, goals, and actions that affect all aspects of your company, avoiding greenwashing and insincerity
To meet environmental protection goals, governments are calling on businesses to adopt sustainable business practices and reduce the carbon intensity of their operations. State aid for struggling businesses hit by the pandemic is also being tied to climate action.
Canada has required bailed-out firms file climate risk reports, and both the EU’s seven-year €1 trillion budget proposal and €750 billion recovery plan will both feature 25% of spending earmarked for climate action and a ‘do no harm’ clause that recipient businesses must adhere to.
While businesses must balance the need for sustainability with that of profit, these goals are not necessarily conflicting. Tackling climate change requires the elimination of waste, long-term frugality, resilience-building, and innovation – all things that businesses are already doing as part of their pandemic response.
Invest in sustainable products and sourcing, back action with a company-wide corporate social responsibility (CSR) strategy, and you will meet legal, employee, and customer expectations for a sustainable future while safeguarding your business performance.
Smart, holistic action must be taken to meet demands
To meet these expectations and make meaningful improvements to the state of the climate, it is essential that your business adapts. The key pillars of tomorrow’s successful companies are sustainability, resilience, performance, digitalization, and innovation. All are interconnected, meaning sustainability must be a crucial part of all strategic planning going forward.
There are three clear levels of activation you can employ to ensure sustainability takes root and provides tangible benefits:
- Compliance – Measuring and understanding the environmental impact of your business is critical to the success of any further sustainability initiatives. This means designating key performance indicators, creating a CSR strategy, and understanding the impact of your supply chains. Gucci Equilibrium, the retailer’s CSR hub, is an excellent example of this.
- Utilize opportunities – In the move towards sustainability lies opportunity. You must adapt to new business approaches and products that you can leverage to make your company more environmentally friendly while safeguarding profitability, such as smart cities, the circular economy, and green energy.
- Company differentiation – By placing sustainability at the heart of your business, you can position yourself to meet the sustainability demands of consumers and prospective employees, gaining customers, improving innovation, and enhancing business performance. Full alignment across your business is key – avoid greenwashing at all costs.
While some companies are still engaged in fragmented, surface-level sustainability initiatives, many are creating strategies, policies and practices that span their entire business and supply chains. Now is the time to consider how you can drive and benefit from a green recovery; meet global market trends, quickly recover from COVID-19, and effectively resist future challenges.
Global appetite for sustainability is accelerating at a faster rate than ever. Learn more about incorporating green practices within your business – contact our experts today.