If you’ve not been spending this lockdown watching David Attenborough’s ‘Our Fragile Planet’ on the BBC, climate change may not be front of mind at present. Indeed, as we enter what the Prime Minister is promising will be the pandemic’s “toughest weeks yet” most of us – and most businesses – have more pressing immediate concerns. Employee morale, new business generation and sanity while home schooling are likely high up most risk registers at present. But a quick look down the line reveals 2021 as the year climate change and sustainability could make or break your company reputation.
This November, the UK will host the 26th United Nations’ Climate Change Conference of the Parties (COP26). Not only will this put the topic front and centre of news headlines the world over, but it also creates a golden opportunity for NGOs and journalists to scrutinise corporate activity in this space – and highlight companies who are failing to pull their weight.
Add to this concerns the Covid-19 pandemic has forced us to step backwards on green initiatives (hello more disposable plastics – goodbye reusable coffee cups) and the prefect storm is brewing. The public mood is shifting – in a poll last year commissioned by B Lab UK, 72% of those polled stated they believed businesses should have a legal responsibility to the planet and people, alongside maximising profits. If you need further evidence of this shift, look at media reports that banks are becoming uneasy about lending to certain types of fossil fuel businesses. Simply put, climate change is becoming the corporate reputation risk du jour.
So far, so manageable. Most companies have – at minimum – decent CSR initiatives in place, and an increasing number are signing up to bodies such as Certified B Corporations, to verify the highest standards of practice in this area. Yet the challenge lies not only in your own company actions – but increasingly the association with other companies who are not making similar efforts.
Every company you interact or associate with – be that as part of your supply chain, or as a client – is a potential reputational threat. Their actions on climate change and sustainability can cause you very real problems. Investors factor ESG into decision making – as shown in HSBC’s Sustainable Financing and Investment Survey last year. Service providers increasingly weigh up environmental factors when deciding who to work with, and Extinction Rebellion has been targeting City firms that have big polluters as clients. Yet having an accurate view of the climate credentials of your entire network is extremely difficult to attain. While you might be confident in your company’s stance on climate change, can you be confident there are no nasties lying in your supply chain?
The good news is, it’s not too late to take action. Here are some suggested steps to take right now:
- Review your risk register – if climate change isn’t near the top of the list, it’s time to move it up.
- Be aware of the complexity of the issue and act accordingly. This year be very wary of making sweeping company statements about the topic of climate change unless you are 100% confident in what you’re saying. Don’t say anything you can’t back up with hard evidence. You may make a rod for your own back.
- Conduct a thorough investigation of your supply chain and gets a warts and all view of where any issues lie. Yes, this may be a complex task – but information is power. Once you have uncovered any problems, you can resolve them.
- Use this time to be a force for good and lead the way. Does your sector have a code of practice you can adhere to? If not, is there an opportunity to be a leader in this space? Look for opportunities where you can model behaviour for others. This needs to be more than just box ticking or creating ‘green’ products – it’s making a real change to the way business operates and reporting it transparently.