Climate change and the challenge for corporations

As the COP26 meetings unfolded in Glasgow, climate activists, such as Greta Thunberg, stood in the streets surrounding the River Clyde and denounced the talks as mere “blah, blah, blah” – meaningless pledges, in other words.

It’s unsurprising Thunberg and other activists reached this conclusion. Despite COP president, Alok Sharma’s, emotional closing speech, the final agreement signed by nearly 200 nations will not – to cite the mantra – “keep 1.5 alive” or halt the cascading climate breakdown we are witnessing.

Even our usually enthusiastic PM couldn’t help admitting the end of the summit was “tinged with disappointment” and in a pointed message to pro-coal China and India said: “We can lobby, we can cajole, we can encourage, but we cannot force sovereign nations to do what they do not wish to do. It’s ultimately their decision to make and they must stand by it.”

Yet while the watering down on the language around coal is disappointing and the phasing out of the Earth’s dirtiest fossil fuel is on hiatus, COP26 was not a failure. And if you look at the climate talks with an anthropologist’s eye, the symbolism which unfolded in Glasgow over the two weeks paints a rosy picture for the future.

Back in 2015, when a COP produced the Paris climate accords, the attendee list was dominated by environment ministers, scientists and activists. Now, six years later, business leaders, financiers and monetary officials all touched down at Glasgow International Airport. The significance of this is twofold. Firstly, it reflects an awareness in governments that climate pledges will cost taxpayers money. But it also shows a realisation from the private sector that climate change is creating strategic corporate challenges – or to put in other words, an understanding that their business strategies and carbon footprints need to be reassessed to reap monetary rewards. Even Amazon CEO Jeff Bezos, who recently flew into space, noted the role of the private sector in his address to the COP conference and stated that “we must all stand together to protect our world”.

The business benefits of adopting a green mindset are numerous and well-documented. With the CBI last week commenting that the UK’s climate targets provide the opportunity for a “new industrial revolution”. The body’s director-general, Tony Danker, went one step further and stated in the CBI’s annual conference that the push towards net-zero could level up the country.

However, there was another symbol at play during COP26 which may also explain the private sector’s eagerness to go green. While government officials were discussing the future of the planet behind closed doors, hundreds of thousands of climate activists took the streets to demand action on climate change. Although those who listened to Thunberg and other activists’ speeches are environmental campaigners, the widespread public interest in dealing with climate change is irrefutable.

In January, the UN Development Programme surveyed 1.2 million people in 50 countries and found that 69% of those aged 14-18 believe there is a climate emergency, 58% of those over 60 agreed, showing there is not a huge generational divide.

In nations where fossil fuels are a major source of emissions, people strongly supported renewable energy, including the US (65% in favour), Australia (76%) and Russia (51%).

What these results convey is widespread global interest in the environment and an expectation that both the government and the private sector must act to avert climatic breakdown. To put it simply, if you’re a business leader and you haven’t got a net-zero target now, you’re looking like you don’t care about the next generation, and you’re not paying attention to regulations coming. Your business’s reputation is at risk, and so is your ability to attract and keep talent.

Businesses need to move beyond just words and take affirmative action to show their progressive and green credentials. Consumers are sceptical now, on the whole, and are constantly on the lookout for brands green or woke-washing their comms. One brand that understands this challenge and has undertaken genuine progressive campaigns is Ben and Jerry’s. Alongside its pledge to use 100% renewable energy by 2025, the ice-cream brand has embarked on a series of bold campaigns – from boycotting Israel to commenting on the Kyle Rittenhouse trial – to cement its status among younger consumers.

The road away from net-zero is narrowing for businesses. Consumers want to shop, and employees want to work at businesses they believe care about the environment. Similarly, governments around the world are signing up for eco-friendly pledges which will force the private sector to adapt. For businesses the choice is clear; adapt and grow or lag and risk losses.

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