Whatever it takes?

It seems the pace of change is forever speeding up in all aspects of life, not least climate change.  Companies, just like Governments, have however been typically slow to change course: new policies and targets take months (and sometimes years) to formulate and achieve approval, especially where these are interwoven with commercial strategies.  So, how should corporate communications on sustainability react to the ever louder clamour for immediate action, results, and signals of hope?  Certainly not by spewing out more greenwash, but saying nothing can be equally as damaging to a corporate reputation.  Communications ‘channels’, reporting and social media included, are important considerations (see Insight).  But having credible and meaningful content that addresses the key issues, is the first essential step.

In the UK, the Government’s Committee on Climate Change (CCC) published its recommendations detailing how the UK economy could reach net-zero carbon emissions by 2050 at the latest.  The CCC’s report advocates that UK should adopt ‘complete’ 2050 targets (recognising national differences, including aviation).  The report calls for the UK Government to legislate a commitment to a 100% reduction in carbon emissions “as soon as possible”, and includes proposals for rewilding of 20,000 hectares of land annually; bringing the current 2040 ban on new petrol and diesel car sales forward to 2035, and seeing a fourfold increase in the amount of low/no carbon energy generated.

These recommendations come hot on the heels of the UK Parliament becoming the first in the world to declare an “environment and climate emergency”.  Many will see this as merely a symbolic move, questioning the lack of consistency with other policy decisions, for example the third runway plans at Heathrow, which the UK House of Commons overwhelmingly voted in favour of last year.

Internationally, companies should be under no illusion about the impending financial impacts of climate change.  Recent predictions from the Bank of England forecast that $20 trillion of assets will be wiped out from the global financial system by climate change, if institutions and companies fail to prepare now.  Investors and analysts are ramping up the pressure on companies to explain their climate strategies, and investors are already taking action.  Norway's sovereign wealth fund recently announced an intention to divest some of its fossil fuel investments, for example.  Whilst the irony of this decision is huge, given the original sources of this money was from the country's oil industry, and this industry will remain central to Norway’s economy, it is undoubtably just one example of many seismic movements that have begun.

Giving further encouragement to investors on the need for action, in a recent speech by Sarah Breeden of the Bank of England, she said “Climate change poses significant risks to the economy and to the financial system, and while these risks may seem abstract and far away, they are in fact very real, fast approaching, and in need of action today.  Climate change represents the tragedy of the horizon: by the time it is clear that climate change is creating risks that we want to reduce, it may already be too late to act”.

Amidst some of the wilder calls for a societal revolution in response to climate change, companies are also receiving mixed messages from consumers.  On one hand, in many countries there has been a significant upsurge in general consciousness on sustainability topics: not just climate change, but also ocean and air pollution, and human rights, to name a few.  On the other, there have been reports that underline how unwilling consumers can be to change behaviour.  Research for Sky News showed that the majority of Britons are unwilling to significantly reduce the amount they drive, fly and eat meat in order to combat climate change.  Just over half - 53% - say they would be unwilling even in principle to significantly reduce the amount they fly, 52% say they would be unwilling to reduce the amount of meat they eat, and 56% say they would be unwilling to drive significantly less to protect the environment.

There are also continued questions over international development ‘fairness’.  Less than 20 percent of the world’s population has ever taken a single flight. This year alone, 100 million people in Asia will fly for the first time.  Who, from within the 20%, would say that the 80% should not enjoy the same opportunities? 

For those companies that have not yet set ambitious carbon reduction, or other long term sustainability targets, how should corporate communications respond to the growing calls for information, direction and updates on sustainability?  Certainly not by trotting out weak and ill-thought through announcements about ‘alignment’ and ‘contribution towards’ the UN Sustainable Development Goals (SDGs).  As shown by the SDG Index, the 17 Goals are most relevant and useful at a Country level, but there the news is far from encouraging – no country is on track to reach all SDGs by 2030.  At the targets and indicator level, companies struggle to identify which of the 169 targets they should commit to in some way, and a number of the 232 official SDG indicators are still being discussed and developed, years after the launch of the 2030 Agenda.  In addition, a number of indicators rely on data where there are significant gaps in database records.  Instead of being able to make ‘matched’ commitments to the SDG targets, companies are left trying to work out how their contributions should be aligned, given previous and projected rates of progress, and relative importance of their impacts.  The end result is inevitably opaque.

The Science Based Targets Initiative (SBTi) takes a different approach, based on what science requires (i.e. a massive stretch for most), rather than what companies think they can definitely achieve.  This approach requires a complete end to end re-evaluation of where and how impacts can be reduced across a company’s value chain, and promotes action ‘ahead of time’ instead of leaving it to future generations.  In February 2019, SBTi announced updates to reflect the latest science from the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on Global Warming of 1.5°C.  These new resources will enable companies to set targets aligned with a ‘well-below 2°C’ pathway, which under the SBTi’s new criteria will become the minimum level of ambition accepted by the initiative.  This threshold is certainly challenging: at the time of writing, the SBTi reports 555 companies are taking science-based climate action and 204 companies have approved science-based targets.  Very few of the 555 will be aligned to the most challenging 1.5 degrees warming scenario.  Nevertheless, SBTi is a growing movement. Setting targets and taking action in this way can hugely strengthen the credibility of ongoing corporate communications on climate action.

Whilst targets on climate change (rightfully) get a lot of attention, companies need to be ready to articulate commitments and progress across many other key sustainability impact areas.  Whilst climate change can be a central theme (as it intersects with many other issues), robust sustainability communications programmes are often characterised by regular and diverse communications to demonstrate commitment and action on other material issues.  Climate change is, after all, just one of many planetary boundaries that we have bust.  According to the latest UN assessment report, the biomass of wild mammals has fallen by 82%, natural ecosystems have lost about half their area, a million species are at risk of extinction, and land degradation has reduced the productivity of 23% of global land. 

Recommendations from the UN assessment report include remedial scenarios, such as “transformative change” across all areas of government, revised trade rules, massive investments in forests and other green infrastructure, and changes in individual behaviour such as lower consumption of meat and material goods.  Just as the Stern Review on the Economics of Climate Change was a wake-up call for many Governments and companies on climate change, so this latest UN assessment should provide overwhelming evidence to support radical changes to our impacts on the wider environment.  There is indeed a crisis, and it is not just confined to our climate.  Companies need to take urgent action: by starting to use this scientific evidence to support fast-tracking of new targets to reduce their sustainability impacts in fundamental ways.  ‘Whatever it takes’ is easy to say, but hard to live up to.  Successful corporate communications on sustainability must be built on credible content.  Generating that content requires fundamental internal discussions on the path towards business success that is not at the expense of environmental or human capital.  Those discussions are not to be feared, but embraced as the mark of a company that is looking forward with ambition, not defending the status quo.

Challenge Sustainability works with companies to guide them through the process of setting long term sustainability targets.  Please contact us if you are interested to discuss how we can help your company.