Net Zero won’t be achieved in a day, but that doesn’t mean you can leave it on the back burner. Businesses large and small are scrambling to keep on top of fast-changing legislation, key industry benchmarks and updated best practices. With customers demanding evidence that businesses aren’t just talking the talk, it’s time to get serious about Net Zero.
Business performance is increasingly linked to being able to prove that success can be achieved in a sustainable way. From gaining access to credit, to drawing new customers, if it can’t be done sustainably, customers – and investors – don’t want to know. And increasingly, they are paying close attention to the businesses just giving lip service.
Matching ambition to action
The climate is changing, and businesses are stepping up en masse to confront the challenges of global warming. But for all the enthusiasm, there can sometimes be a disconnect between ambition and action. A recent PwC survey showed that, despite widespread agreement on the importance and opportunities that the Net Zero transition could bring, only 44% of asset managers have integrated sustainability into their public reporting in line with the Task Force on Climate-Related Financial Disclosure’s recommendations.
And this hints at a larger problem. Lots of businesses are moving quickly to allay concerns and claim they’re well on the way to Net Zero. But hot air is…just hot air. It isn’t enough to simply talk about moving to Net Zero, your stakeholders want proof, and if you can’t give it to them, you’ll be playing catch up from the back of the pack. Businesses that are only reacting to demands being placed on them will find themselves treading water. To get ahead, businesses need to be proactive and match ambition to action. And an important part of this will be communicating your Net Zero journey to your stakeholders.
Set your goals
The journey of a thousand miles begins with deciding on how to measure your business’ sustainability performance. There are lots of different indices, certifications and licenses you can pursue, but not all will be relevant or appropriate for all businesses. From the Sustainable Finance Disclosure Regulation (SFDR) to The Science Based Targets Initiative (SBTI), it can sometimes be overwhelming for smaller organisations to keep on top of fast-evolving requirements around ESG reporting. According to Goby, an ESG management platform, there are currently over 2,000 individual ESG reporting indicators requested by 600 ratings agencies and benchmarks.
The benchmarks and measures that are right for your business will depend on your specific circumstances. So when it comes to deciding how best to measure your performance, seek out the criteria used by similar firms in your industry and cast an eye to your peers to see what works for them. The main goal is to help you understand where your business is currently in terms of sustainability performance, identify your most important improvement opportunities and help you map a clear path to achieve your sustainability goals.
Whatever stage of the process you are at, it’s important to remember that nobody, least of all your customers, likes a greenwasher.
Regulators and lenders around the world are clamping down on businesses failing to take meaningful steps towards Net Zero. Achieving Net Zero by 2050, as states agreed at COP26, won’t happen quickly. It will require businesses to make fundamental changes to their operating models, like rearranging supply chains, swapping out carbon-heavy logistics vehicles for electric models, or sourcing materials from different markets. Businesses looking to access credit to finance such a significant transition will struggle to secure it if they aren’t clear in their planning and transparent in their reporting. Whether you’re close to achieving your sustainability goals or still in the early stages, transparent reporting is essential for proving you’re taking tangible action towards your goals and making demonstrable progress towards meeting them.
Communicate with impact
The ESG report is often the first focus of companies looking to get their sustainability ducks in a row. But it’s only one of the tools at your disposal.
Communicating your journey to Net Zero shouldn’t just happen once a year. Publishing a range of regular updates can help to show a continued focus on ESG and a commitment to making ongoing progress. From producing weekly or monthly blogs, to insights and case studies, depicting your journey in a range of ways helps to demonstrate the tangible outcomes of your sustainability programme. Research of video ads by Greenbiz shows that videos displaying innovative climate solutions were 50 times more effective at driving views than videos with more negative messaging about climate change, so don’t be fooled into thinking that ESG reporting starts and ends with a report. Intuitively weaving your Net Zero journey throughout your communications shows a more holistic approach to meeting your goals.
When it comes to documenting your journey to Net Zero, actions speak louder than words. But without the right words, businesses can struggle to make an impact and demonstrate their commitment. Find out how we can help you write your sustainability report or build a more strategic approach to your sustainability comms.