We are now feeling the full effects of the climate crisis we were warned of for decades. Public awareness of the issues has increased, and with it demands from across the social and political spectrum for businesses to take the lead in finding solutions.
Many organisations still haven’t really got to grips with how they can have a positive impact, despite there being numerous opportunities to reduce their business carbon footprint. The focus is now on business sustainability, from supply chains and manufacturing through to recruitment and thought leadership.
Businesses need to act now to embed sustainability principles in their strategies and operations. Key considerations include:
- stakeholder interest and influence;
- supply chain sustainability;
- risk assessments across the short, medium and long-term;
- redefining internal processes (e.g. new product development and capital allocation);
- performance management and KPIs; and
- skills, including future skill requirements.
Communicating action plans and progress, through transparent reporting, for example, is vital to answering stakeholders’ questions and satisfying investors.
At RSM, we consider your business’s environmental impact across four categories.
- Natural world
- Resource consumption
- Waste and recycling
Carbon dioxide and methane are the major gases influencing climate change. Commerce and industry are major contributors to carbon dioxide emissions in particular, having large business carbon footprints.
For the business community, the transition to a low carbon economy brings both significant risk and opportunity. The transition is as significant – perhaps more significant, given the stakes – as any historic industrial revolution. Shaping credible net zero strategies that resonate with stakeholders is a key task.
Furthermore, the number of legal and reporting requirements relating to greenhouse gases is growing, as companies are rightly held to account against their promises of climate action.
Businesses affect the natural world in many ways, from the use of raw materials through to changing or repurposing land. Some applications for planning permission have been denied because of their business strategy and environmental positioning not aligning, leading to adverse environmental impact, including effects on wildlife.
The natural world has not got as much attention as climate change or waste and recycling, but this is changing. Across construction and agriculture, for example, organisations are considering net positive biodiversity. Legislation is bound to follow, thanks to the Taskforce on Nature-Related Financial Disclosures.
Resource consumption in all its forms has a major impact on businesses and their consumers, especially when there are supply chain disruptions. An organisation’s ability to cope often depends on whether it can find alternative sources – and the bigger the organisation, the better its ability to find new suppliers.
Environmental considerations have made inorganic materials (specifically, plastic) less attractive to consumers, but non-renewable natural resources are exactly that; non-renewable. And many of the minerals and metals required to create the technologies that would support our transition to low carbon are both scarce and often hard to access.
Leading environmental enterprise organisations are therefore looking to replace scarce resources with new materials. A great example is graphene, a new material with wide-ranging applications in materials science, including the production of more efficient sonar panels. Such innovations are driving new product development, creating value, and promising greater supply chain resilience in the future.
Waste and recycling
Waste and recycling
Waste is expensive – whether it be as a result of collection fees, landfill taxes, inefficient use of materials, or pollution.
Pressure on natural resources is behind most legislation to combat large-scale corporate waste, but the overwhelming amount of single-use plastic still being produced, for example, shows us that there is much left to do.
Leading businesses are starting to move beyond waste management and into a ‘circular economy’; an economic model that aims to avoid waste and preserve the value of raw materials, energy and water for as long as possible. It promotes an alternative approach to the “use-make-dispose” economy by following three principles:
- ‘Design out’ waste and pollution
- Keep products and materials in use for as long as possible
- Regenerate natural systems.
This is still an emerging field, but we’re seeing more and more businesses implementing this model as pressure from customers and other stakeholders grows.