Sustainability continues to be a burning topic for companies in 2022. The latest COP26 showed the growing corporates’ commitments to building a net-zero economy. More than 1,045 companies representing $23 trillion in market capitalisation (more than the GDP of the United States) are committed to science-based targets emissions reduction. Companies succeeding in translating climate commitments into concrete actions will achieve a sustainable leading status.
It is no secret, 2022 is the year for corporate climate action. It is a great opportunity to put words into action. But it is easier said than done, how can businesses make 2022 a year of corporate action on sustainability?
A recent survey by INSEAD revealed the apparent disconnect between what board members say about the importance of climate change and what they do. 75% stated that climate change is fundamental to the strategic success of their companies. However, 43% of companies do not yet have clear targets for reducing carbon emissions (or did not know if this was the case). 50% stated they are not entirely satisfied with their company’s reporting to the board on addressing climate change issues. But the good news is that this knowledge gap can be quickly closed.
In the Climate of business, our CEO, Lubomila Jordanova shares with companies practical tips on becoming sustainability leaders.
Sustainability tips to make 2022 the year of corporate climate action
Put the resources – often, what we see when speaking to prospects or clients is the limit on resources working on the sustainability / ESG agenda. Think about people, tools, and knowledge. The basic need for a company to succeed sustainability within a year is at least one person and a budget for tools. This person will need to implement this topic across departments, which also helps. One thing is sure: people want to be involved and loyal to sustainability leaders. They want to be accurate in their measurement and maximize impact. They are looking for ways their industry can become sustainability leaders while making a difference.
Set a target – it is excellent to embed climate and ESG in your long-term strategy, but setting short-term tangible targets is the key if you want to claim leadership in the topic in the longer and shorter term. We often see companies getting incredibly ambitious about sustainability and wanting to see results fast – this is achievable if you break it down in small steps for the coming 12 months.
Set a timeline and some buffer – sustainability sadly still needs a buffer when you plan to implement a plan. When engaging your employees, customers, and suppliers, expect it will take time. They sporadically connect to a topic that is not yet legislatively obliging them to behave sustainably. Make them part of the journey if you want results, but allow real-time to align them.
For chief sustainability officers and sustainability leads
Education first – the most likely reason for a sustainability agenda to fail is the lack of understanding across stakeholders why it matters at all. At Plan A, we often see that the vital ingredient to a quick turnaround in approvals, prioritisation of projects, or general implementation of decarbonisation activities; happens when the different stakeholders are aligned on why this matters. Spend time engaging your team, board, or management or work with a partner that can help you on this.
Share ownership – once the team “get it”, they most likely would want to become part of the projects you are leading. Even though probably you are the most knowledgeable on the sustainability topic, getting your team to show part of the implementation of your sustainability agenda is crucial. Often, sustainability is a topic that personally engages the team, the board, and the management. By letting them in, you can rely on their support for the future.
Connect it to the traditional KPIs – a “language barrier” for sustainability professionals, even after the team and the board are educated on the topic’s importance, is how does sustainability translate to money?
At this phase of our economy, we still speak about GDP, MRR, ARR, CAC, and EBIDTA. Connect your requests for budgets to the expected ROI. For example, how is sustainability leadership help with employee retention, customer engagement, and revenue increase? Tell this story, and you will have everyone on board.
Changing the climate reporting for board members
Education first – when speaking to sustainability leaders, I sometimes hear how they feel their board doesn’t “get it” and doesn’t prioritise sustainability enough as it is not bringing the expected ROI. Spending time on learning about the anticipated climate risks, the costs associated with them, the shift in consumer preferences in favour of sustainability and transparency, and the basics of sustainability would help you see the long-term value in the investment in sustainability today and allow you to sit on the table with the leaders of any company speaking the language of tomorrow.
To be early might be challenging, but to be too late will be devastating.
Anna Borg, Chief Executive Officer, Vattenfall
Drive the discussion – Maybe you already know but don’t see the board rooms you participate in express interest in sustainability. Lead the way. Business as usual is irrelevant, be it because of COVID, remote work, cryptocurrencies, NFTs, but also, of course, climate disasters in the last 12 months. The stereotype of the past discussion is irrelevant if it doesn’t include sustainability and ESG. Even if only legislation is the reason.
Commit for the short term – after the common understanding of sustainability and ESG has been established, focus on agreeing or promoting short-term goals. No one will claim the leadership better than the one that got their priorities straight today and engaged all the suppliers, customers, and employees (Scope 3) tomorrow.
Make your company a sustainability leader by working with Plan A. Find out how our tools and resources may support you in your decarbonisation journey.