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How organisations can develop a climate commitment

This decade we stand at the threshold of major climate choices. If global greenhouse gas emissions are not reduced in line with the Paris Agreement's 1.5°C scenario, the resulting impacts of planetary heating on our societies will be devastating. The last five years are on track to be the warmest on record. The earth's global average temperature has increased to 1.06°C above pre-industrial levels, leading to sea level rise, wildlife and biodiversity loss and increases in severe weather events leaving families, homes and communities devastated.

These outcomes have significant social, community and economic implications. The future of our people, planet and profession depends on decisive, transformative, and collective action over the next ten years. The business community has a clear role to play in both averting and adapting to the climate crisis and many are setting climate commitments.

If you are part of the 97% of New Zealand businesses that is defined as SME (20 employees or less), it may be challenging to think about how to embed sustainability into your business.  Here are some key learnings from organisations to help you set your climate commitments.

The starting point to setting a climate commitment is to have information about your key climate risks and opportunities. Understanding your emissions profile is the first step - where in your supply chain is carbon generated?  It could be in heating, lighting, and running office space, or from your manufacturing process.  Perhaps farther afield, like how you source your raw materials or transport your goods. Information is key to help make better decisions.

Once you have a view of your emissions landscape, this, in combination with your climate and business ambition, is a crucial input to set your organisation’s climate strategy. Breaking the key information down can reveal ways to improve, such decarbonising parts of the manufacturing process, purchasing renewable energy for offices or electrifying transport.

With those identified, the next step is to set priorities and a plan for action. The main thing is to think through your whole value chain from beginning to end and determine the most material issues (and opportunities) for you. But remember, this process can provide opportunity for  innovation in your business and can look to increase value – it isn’t all about cost.

Start taking some co-ordinated action to balance operations, physical presence and growth ambitions within the newly set strategy and targets. Identify quick wins, key focus areas, longer term projects and decisions that may need to be made now to achieve long term objectives.

Based on your material issues, consider specific decisions around things like energy use, travel, water, materials use, food, carbon and particulate pollution, plastics, waste, conservation, and biodiversity. Start building trust and confidence with key stakeholders through transparent communication and embed your climate change ambitions in your organisation’s culture. As part of that process, start conversations with the key enabling staff in your organisation that support your transition, e.g. procurement, finance, IT, HR. All your staff play a role in reducing emissions so ensure that you take them along the journey and enable them to make positive climate choices.

Finally, your suppliers are another key stakeholder. Segment your suppliers on risk and leverage, to identify areas of opportunity and consider the most appropriate ways to engage with them to create alignment on your climate change ambitions.  Remember this is a journey and will take some time to come to life.

Start simultaneously embedding climate change-related choices into your operational policies and processes. Consider how your leadership (including your Board if you have one) hold themselves and others accountable. Over time, you should think about how roles and responsibilities are allocated and how you will measure and report on your results – as well as how external advisors can support these processes.

Finally, measuring and reporting your progress will be a key enabler for continuous improvement. Working on programmes to better integrate carbon data into decision-making will be important for long-term success. When this is integrated with your financial, resource and operational planning, measuring and reporting allows you to evaluate scenarios, set plans and monitor the progress of your emission reduction journey.

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