Sustainability in Business: 6 Key Trends
Ahead of the Climate Innovation Forum 2019 (CIF), we at Climate Action spoke to leaders of businesses trying to adopt greater sustainable policies and share their own practical solutions.
Increasingly, businesses are adopting socially and environmentally responsible frameworks to advance their own practises and partake in the global sustainable movement.
The Climate Innovation Forum is part of London’s first Climate Action Week, announced by the Mayor of London, hosted by Climate Action.
We found 6 key trends that businesses will find supportive or inhibiting in the journey to greater environmental sustainability.
1. Transition to net zero emissions
In the era of renewable power, investments for clean energy are set to increase as dependence on alternative clean energy expands. The increasing affordability of renewables as power is encouraging more and more businesses to fuel their own transport, buildings and activities on clean power.
The concern of economic sustainability is going to become the forefront of business policy. Project Leader at the Climate Crisis Foundation, Heather McKay believes that to achieve decarbonisation businesses must “recognise climate change as a serious, and potentially severe, risk to business operations, regardless of the sector”.
In combination with the UK government’s promise to become net-zero by 2050, it is unsurprising that cities, industry and businesses are likely to experience a transition to low carbon consumption and even target net zero emissions.
Low carbon innovation is being directed into cities; central economic hubs are becoming smart cities as global spending on this transition is expected to nearly double from 2018 to 2021 – from $80 billion to $158 billion, as estimated by the International Data Corporation.
In addition, smart grid technology and electric vehicles (EVs) are expected to expand on a mass scale, all in ambition to reduce carbon emissions and reach net zero.
Christopher Webb, Head of Sustainability and EMS at TP Bennett Architecture, Interiors and Planning, underlined the capacity available to businesses through the low carbon transition: “Growing technologies such as post-meter energy storage, the rise of renewables and EVs and a desire for decentralisation are reducing the domination of the unclean grid-based energy sector.”
2. Increased investment in socially responsible projects
As global demand for greater sustainability within companies and agencies increases, as does the demand for socially responsible projects from business investment. Financial gain is not the only requirement of business endeavours; now a mandate for a positive societal impact is being established.
Incorporating Environmental Social Governance (ESG) within corporate policy and practise is seeing exponential growth in mutual fund investments, having grown by over 60% since 2012 and exceeding $1 tn in 2018 according to the data provider Morningstar.
Nick Lyth, Director of Green Angel Syndicate, expressed that his own business is exclusively focused on the social responsibility of investment projects: “Green Angel Syndicate is entirely embedded in sustainable thinking. Its existence is predicated on ONLY working with investment opportunities that will make the change that matters to Global Warming.”
3. Greater governmental policy restrictions
The UK has now set the legally-binding track to net zero greenhouse gas (GHG) emissions by 2050. Ultimately this will entail greater business and industry emission restrictions to reach these targets.
GHG emissions rose by 2.7% in 2018, as renewable expenditure decreased. UK investment in green energy decreased 56% in 2017, according to Bloomberg New Energy Finance, after government support was removed. However, as found by the International Renewable Energy Agency, 2019 has seen renewable power become the cheapest source of electricity, creating a new opportunity for businesses to adopt more sustainable activities and possible investments.
In addition, the Energy and Climate Intelligence Unit (ECIU) reported that 1/6 of global GDP is contributed by nations and cities pledging to be net zero by 2050. In lieu of the recent UK pledge, as well as the UK’s Clean Growth Strategy, the capacity for businesses to expand the renewable market and commit to sourcing and using more green power is likely to rapidly increase.
The Climate Innovation Forum’s VIPs reached a consensus upon tighter government policy; greater restrictions and accountability was agreed to be a primary focus to both hold government and businesses responsible to achieve climate targets and result in economic sustainability.
Victoria Bradley, Director at Walker Morris emphasised the requirement of policy restrictions: “Following a period of stagnation in the market, the next 20-25 years is set to offer improvements in technology and subsequently enhanced investment opportunities. Policies aimed at restricting conventional processes promise to further secure the UK energy market as one of the most dynamic in the world.
4. Increasing time pressure
As companies and countries increasingly commit to climate policies, we found corporate concern over time achievability for reaching decarbonisation and sustainability amongst our VIPs.
The Intergovernmental Panel on Climate Change set the global temperature over which there is no return to be 1.5 degrees Celsius above pre-industrial levels in 2018. Present trajectories from the UN’s Intergovernmental Panel on Climate Change suggest under current policies, the world will reach this point of no return in less than 12 years.
Nevertheless, government commitments have since committed to greater climate targets; 15 nations and 23 cities have pledged to become net zero by 2050, analysis found by the ECIU.
To reach the new target and ensure industry contribution to global warming reduces, businesses will face greater time pressure in achieving goals. Indeed, shorter term goals will increase simultaneously with greater emission limits and investment in innovative technology.
Discussing concerns with attendees of the Climate Innovation Forum, many expressed apprehension over time limits. Nick Lyth, Director at Green Angel Syndicate said: “We are entering an era where it is obvious that decarbonising has happened disastrously slowly. The consequences are that global warming threatens overwhelming problems, which also means that decarbonising has run out of runway. It has to happen now, not tomorrow. It requires a combination of radical innovation, and radical policy change, to make this possible.”
Discussing the importance of collaborative events such as the Climate Innovation Forum, Board Advisor at Habitat Energy, Paul Massara, emphasised the “urgency” and the “need to apply innovation, human and financial capital as soon as possible”.
However, also discussed was the possibility that increasing time pressure will enact greater efficiency for climate action. Data will have to prioritise climate policies to ensure change is efficient and rapid within given time frames.
Global Head of Sustainability at Jacobs, Zoe Haseman stressed that the “smart use of big data” will have to be utilized to “identify the rapidly changing needs of consumers and resources and using this to inform future, demand-led solutions.”
5. Advancing technological innovations
Achieving climate targets depends heavily upon technological innovations that will help government, industry and businesses to continue with sustainably practises.
Innovations including renewables, electric vehicles, efficient batteries and carbon capture are emerging possibilities both government and industry are beginning to depend upon to reduce emissions.
In business, innovations such as AI, smart sensors, data analytics and blockchain will aid businesses to manage their supply chains and effectively cut emissions from production and distribution of products and services.
A consideration put forward by several attendees was the question of effective innovations. Indeed, the future of innovation will have to be directed heavily towards the most effective, as well as cost effective to reach both policy targets and appeal to economic markets.
Head of Sustainability and EMD at TP Bennett Architecture, Interiors and Planning, Christopher Webb emphasised the lack of policy surrounding embodied carbon despite it being “the most accepted train of thought being that 40 – 60% of total carbon emitted is embodied within the construction of buildings and the manufacturing of their parts”. In addition, he emphasised that “an over-belief in the imprecise art of ‘off-setting’ and BEIS’ reported reliance upon the use of non-existent carbon capture technologies both threaten the reality of a zero-carbon economy.”
Director at Walker Morris, Victoria Bradley underlined the importance of data prioritisation in innovation: “Data analysis enables more effective prioritisation, which in turn fast tracks solutions that can make the biggest difference. Smart systems will lead the way increasing transparency and becoming more efficient by using technology and the data collected to become more efficient.”
6. Greater collaboration between Government, business and industry to reduce emissions
To effectively prioritise policy and innovation, set responsibilities and achieve a temperature rise below 1.5 degrees Celsius, governments, industry and businesses will have to increasingly collaborate efforts towards climate policy and action.
Greater international frameworks are being set up to support industries within countries. Annual COP meetings, IPCC reports, UNCC conferences, as well as national agencies such as the UK’s Committee on Climate Change all provide foundations for Government and industry collaboration.
Sainsbury’s Sustainability Project Manager, Lyn Worrall discussed the achievability of a zero carbon economy. Taking action to pursue this goal, she said companies in their sector need “more joined up collaboration and sharing of information in this field” and “the Government needs to implement a standardised framework for what it expects from our industry”.
Global Head of Sustainability at Jacobs, Zoe Haseman emphasised Government-industry co-operation: “The opportunity is now for the Government, industry and society to work more closely together to find the best way to deliver the solutions we need as a country.
“Government will need to create the right conditions through incentives and regulation. Businesses need to respond and innovate and deploy technology to speed up the transition and society needs to change behaviours.
“We’re seeing far more need for aligned thinking to the challenge. If all stakeholders work in a partnership, this brings greater connectivity and cross-pollination of ideas, technology and strategy. It will take all of this together for us to meet our future decarbonisation objectives.”
Climate Innovation Forum
London | July 3rd 2019
Central to progress towards business sustainability are collaborative efforts, prioritised by both time and data, advanced by technological innovations. These trends are inculcated into the Climate Innovation Forum, where leaders in business sustainability and innovative practitioners can meet and discuss practises to build networks and secure sustainability in business. Don't miss out and register here today!