As the Intergovernmental Panel on Climate Change (IPCC) issued its “final warning” to governments on the urgency of action on climate change, it implored them to be more aggressive in their efforts to decarbonise global economies.
The report, published by the IPCC with the approval of the governments of 195 countries, calls for developed countries to deliver on their net zero ambitions by 2040 – a decade earlier than previously planned.
Critical to delivering this ambition, it says, is the delivery of net zero electricity supplies by 2035 and the phasing out of coal by 2040 at the latest.
Of course, the decarbonisation of energy supplies is only one step in the decarbonisation of industry and businesses will be contemplating what the impact of the more ambitious pathway to net zero laid out by the IPCC will be, if adopted by governments.
While the UK’s new energy strategy provides some responses to the IPCC’s challenge, organisations with an international footprint must remain alert to the impact it may have on their operations in other jurisdictions too.
Regardless of the scale or pace of change to existing targets initiated by this latest report, there are actions businesses can take today to build the foundations for a sustainable future and help the UK achieve its net zero ambitions.
We’ve listed four below – none of them complex in themselves, but all part of a wider strategy to accelerate progress and prepare businesses to thrive in a net zero economy. Some can be completed internally, while others – given the scale and pace of change required – depend on the ability of organisations to collaborate with peers.
So without further delay, here they are.
UN secretary general, António Guterres, described the IPCC’s synthesis report as “a clarion call to massively fast-track climate efforts by every country and every sector and on every timeframe. Our world needs climate action on all fronts: everything, everywhere, all at once.”
Despite the urgency, though, it’s important that organisations ensure actions are carefully planned, strategic and measurable. This may seem an obvious first step, but while most organisations have established and announced decarbonisation targets far fewer have developed detailed action plans to deliver on those stated ambitions.
Organisations should begin by examining their activities to determine which have the greatest impact on their emissions and consider the available window for action within the countries and regions within which they operate.
Ensuring targets are both science-based and align with those set at a national level by governments establishes a solid platform for success, enabling organisations to identify key actions which need to be taken to reduce emissions, the timelines within which they must be achieved, and the investment required to deliver them.
Forward-thinking organisations should also consider adaptation within their sustainability strategies, taking into account measures that could be applied to future-proof their operations from the damaging impacts of climate change which are already occurring.
This one isn’t even something to consider – it’s an imperative.
Put simply, firms face corporate reporting requirements that they must meet - including the existing requirement from the FCA for listed companies to make TCFD disclosures and the forthcoming guidance from the ISSB that the UK government is expected to adopt.
As well as businesses needing to meet these new requirements because they will be mandatory, they will also want to consider how providing this data will increasingly influence, or even be a precondition for, access to finance.
The investment businesses make to be able to meet these new reporting requirements will enable them to pull together information internally that will help them better steer the business, implement their sustainability strategy and seize opportunities created by the sustainability transition.
Supply chain is often where companies find their largest risks and opportunities with scope 3 emissions making up the vast majority of the overall carbon footprint of many companies.
For companies to align their pledges and obligations with realities on the ground, they need a supply chain that is resilient and transparent. Crucially, they need suppliers that are able and willing to disclose information to them, and work with them in new and innovative ways.
To achieve this organisations should integrate sustainability into sourcing decisions and supplier management, working with suppliers to identify cost-effective ways to reduce their use of materials, energy, chemicals, water, etc. as well as passing on the same requirements to their suppliers so there is alignment throughout the chain.
Where possible they should also work together to design circularity into product design and procurement, exploring ways to take back used products for repair, re-use or re-manufacture, moving from a linear to a circular approach reducing business impact on natural resources.
The transition to a green economy can only be achieved if we have the people with the technical skills, knowledge, behaviours and capabilities to tackle environmental challenges and unlock the opportunities for growth they present.
And with as much as 80% of the people who will make up the workforce of 2030 are already in employment today it's not an issue we can kick into the long, green grass. If we're going to build their capabilities for the future, now is the time to act.
We’ve been working alongside the Institute of Environmental Management and Assessment (IEMA) to produce a blueprint for green workforce transformation. It supports organisations in the drive to build a greener workforce and can be used by businesses across all sectors of the economy to develop the skills needed to drive forward their decarbonisation plans.
There’s positivity from all sectors of industry, too, with the vast majority of respondents to our CxO Sustainability survey published earlier this year, remaining optimistic that the world would take sufficient steps to avoid the worst impacts of climate change. Those same people reported feeling a great sense of urgency to take action and increasing investment in sustainability within their own organisations and industries.
Recent reports from the IPCC and the UK’s own Climate Change Committee, though, highlight that action continues to lag behind ambition – and that industry and Government must collaborate more to accelerate our decarbonisation journey.
There’s no one answer to the climate crisis – and no one with all the answers – but, as the IPCC has highlighted in its latest report, we collectively have the technologies, skills and capital to drive forward our race to net zero together.
Let’s team up to speed up our journey to a net zero economy.