Can the planet save business?

By Andrew Adie, Managing Partner

Being carbon neutral by 2050 was once a big statement of intent. A bold commitment to decarbonise and build a sustainable business fit for the future.

Today that year is continually dropping. This week Apple announced that it, and its supply chain, would be carbon neutral by 2030, last week P&G committed to net zero by 2030, Amazon, Reckitt Benckiser, Verizon and Infosys have all signed up to a Climate Pledge binding them to net zero by 2040. Microsoft has pulled a trump card on them all and pledged to be carbon negative by 2030 (it’s going to remove all the carbon from the environment that the company has emitted since its foundation in 1975).

For many environmentalists this corporate carbon reduction arms race is a step in the right direction but is met with a degree of weary cynicism. The broad argument goes ‘its fine to announce big initiatives and capture soundbites but what’s your plan?’ Clearly getting to 2049 and discovering that the mountain has still to be climbed is not much use.

I have some sympathy with the environmentalist perspective on this. In reality being carbon neutral by 20 (insert favoured number) isn’t the whole picture. If you’re a professional services firm the challenge will be very different to if you’re a steel manufacturer or an energy generator.

It also fails to reflect the broader picture: Corporate purpose and ESG isn’t just about sustainability (critical though that is). It’s also about creating a fairer society that is inclusive and celebrates its diversity. It’s also about creating fair working conditions and payment and it’s about good governance and giving back to society (including paying your taxes).

If you run the slide rule over some of the companies making big net zero claims, gaps in the wider ESG argument can become apparent.

Which brings us to the reputational challenge. Big statements demand big action and big results. That means more planning and less bluster.

There’s no point making a big statement if no one believes you. The quiet confidence of a well thought through plan that has milestones for delivery and a transparent reporting process is far more impressive. I’m not meaning to be dismissive of companies making big net zero claims. I’d much rather see businesses doing it than not. But the world is now watching and these firms have placed themselves in the bullseye.

If they deliver they will be celebrated, if they fail their reputations will be badly damaged. And they also need to ensure that the other elements of ESG are equally promoted. Purpose isn’t just a mission to save the planet (unless you’re an environmental NGO). 

There is however an additional bonus from this. To deliver these net zero plans business is going to have to invest substantially in energy efficient, low carbon production processes, offices, logistics chains and ways of working. For an economy looking for growth in an era of structural change that has the potential to be a huge bonus that brings economic as well as environmental benefits.