Sustainability is racing up the retail agenda
Working together with The Met Office, we’ve created four climate scenarios that describe what the future could look like by asking ‘what if…?’
They're not predictions about what will happen. Instead, they use historical climate data to hypothesise on what could happen.
Their job? Supporting progressive companies in their drive towards more sustainable operations and resilient supply chains. And enabling businesses to use data to weigh up the risks and opportunities that climate change presents in the years ahead.
Taking action – guided by science
Achieving net zero emissions by 2050 in line with the Paris Agreement is the UK’s legal target. Now, well into the decisive decade in which changes must be made, a surge in net zero commitments from governments and businesses indicates building momentum.
“For companies to make choices now about potential future challenges, they need to be confident that they have considered appropriate climate-related risks and opportunities – and climate scenarios like these can help us all to visualise the details,” said Emily Cromwell, a director at Deloitte.
“Businesses that engage in this kind of thinking, guided by science, provide a powerful example of how to effectively manage climate-related risks and opportunities, through more sustainable operations, while improving their offer for, and relationship with, customers.”
For companies to make choices now about potential future challenges, they need to be confident that they have considered appropriate climate-related risks and opportunities.
Emily Cromwell
Partner, Deloitte
People power and social responsibility
One such business is British luxury brand Burberry, whose COO and CFO Julie Brown describes sustainability’s importance to the company’s culture and future success.
“Sustainability is racing up the agenda of customers, employees and investors,” said Julie. “It appears more and more frequently in customer feedback - our employees are passionate about it and want us to do all we can.”
It’s a shift that’s reflected in our own data too: Deloitte research shows that 40 per cent of those surveyed in 2020 said they’ve chosen clothing and footwear brands that have environmentally sustainable practices or values.
Change-making action by Burberry includes ensuring all its products have a positive social or environmental impact, focused on improvements made at the raw material sourcing and product manufacturing stages. These range from the amount of organic content or recycled fibres used in materials or the delivery against carbon emission reductions at production facilities, to workers being supported through wellbeing programmes.
This is part of Burberry’s commitment to be carbon neutral across its own operations by 2022, and to be climate positive by 2040, going beyond net zero by investing in key initiatives to support wider climate change efforts beyond its value chain - uniting customers, employees and investors behind a common purpose.
Understanding the impacts of climate change
Bringing climate reporting in line with financial reporting also helps to drive progress and Burberry discloses climate-related risks and opportunities in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
Action taken to address them is published in the company’s annual report. “It’s not just a reporting mechanism,” Julie continued, “but a way of assessing the risks and opportunities associated with climate change, and that in itself brings about positive change in the business.”
An evidence-based picture
To develop an ever more detailed understanding of climate-related risk in relation to its supply chains, Burberry’s team had already carried out qualitative scenario analysis to identify raw materials vulnerable to impact of climate change.
Building on this, we collaborated with the team on workshops that aimed to quantify the exposure of the leather goods value chain to climate-related risks, using conventional climate science.
“Using climate data from the reference scenarios, we were able to estimate a potential financial impact of selected climate-related risks across the leather supply,” said Deloitte’s Emily Cromwell.
Our work together included sharing knowledge with Burberry on the scenarios and climate science behind them, so they could apply the same climate risk assessment across other risks and other commodities in future.
Contact:
Katy Barrass, PR manager
+44 20 7007 7916 | Email Katy
