Business Leadership in Climate Action
On November 26th, CEP Toronto hosted a sold-out event that engaged the community in discussion around the role of businesses in climate action. Our expert panelists and moderator brought a wealth of experience on the subject and discussed the current Canadian landscape, challenges and opportunities. CEP Toronto is a non-profit, volunteer-led organization committed to facilitating conversation and professional opportunities in sustainability.
If there’s one thing I appreciate in a discussion about sustainability, it’s frankness; it was for this reason that this commentary of Steven Pacifico’s was my favourites of the evening: “The kind of effort we require now is akin to a wartime effort. If you’re not thinking about this now, your business is irrelevant, or will be shortly.”
The business climate has been changing, too, and the panelists agreed that environmental, social, governance (ESG) practices have become table stakes in big business, where we now see an intimate understanding of sustainability. Consumers are growing more conscious of the impacts businesses have and are spending their dollars at companies that align with their own values. Likewise, businesses are increasingly taking a public stand on social and environmental issues. Examples include social cause marketing campaigns from Nike and Levis and donations from companies like Patagonia, Shopify and Apple.
While value alignment with consumers is an immense incentive for businesses to take climate action, doing so also makes good business sense. Government regulation is no longer the primary driver of change; sustainable options are often better and more cost-effective. Another influencer for business leadership is risk management and mitigation; those that delay action increase their risk exposure to changes in regulations, technology, and market trends that will result from climate change. Beyond emissions reductions or carbon neutrality, business leaders today are focused on innovation, adaptation, continuity and longevity in the context of climate change.
How can we gauge the authenticity of business action against climate change and identify greenwashing? To this question the panel response was unanimous: “look under the hood”. Look at what companies are doing internationally. Are they consistent with their values? What are they lobbying for, either directly or indirectly? Look at how impact is being defined. Is this being disclosed? How is it being measured, and delivered? Lastly, look to authorship. Inferences can be made about an organization’s commitment to ESG factors based on the seniority of the person authoring a report. We are progressing, but our country, government, economy and businesses are in transition; the change we need isn’t going to happen overnight. While those in charge of the country’s largest businesses have achieved literacy in sustainability, widespread changes in mindsets and skillsets are required.
Looking forward, business and climate strategy should be in alignment. Initiatives like RE100 and B Corp exist to help guide and certify businesses. At a national level, the panelists believe that change stems from a mission, and people standing behind it; sustainability values need to be injected into the country’s economy if we are to overcome the challenges faced today.
Opportunities abound in innovation and partnership. Technological innovation will continue to equip businesses with scalable solutions that can neutralize their operational impacts, and partnerships will drive connectivity that disperses solutions at every level. Rather than components, businesses should be focused on the decarbonization of their entire value chains, with building retrofits being cited as one of the single most impactful steps a business can take in this direction. For those wondering where to begin, the panelists implored attendees to dream big and speak up; to think about where they could have the biggest impact, and not to shy away from disruption. To anyone in need of encouragement, they suggested reading the case study of Danish energy company Ørsted, which decided to lead with purpose and has profited greatly.