In it together

Way back in the early days of non-financial reporting, I used to have my own unofficial sniff test – a quick count of the number of photos showing outsized donation cheques and random smiling children to illustrate supposedly fundamental action. Thankfully the former now rarely feature, even if the latter haven’t entirely disappeared.

These days, things are altogether more serious, with a consumer backlash and regulatory intervention. The prospect of fines of up to four percent of annual sales puts this firmly into the business mainstream.

Our writers this month cover the bases – examples of companies that have tripped up, advice to look along the supply chain around the world, a suggested action plan, the offer of a risk detector, even a lexicon of greenwashing (dubbed a laundry list, get it?). 

This month we are focusing on transition planning.  That’s timely as the body tasked by the UK government with issuing guidance has just published its final set of advice. There’s now a pretty comprehensive resource bank for companies and investors wanting to shift towards a low carbon economy.  Already the talk is of moving from voluntary guidance to mandatory requirements, and regulators in different jurisdictions around the world are aligning their approaches.

Coming at a time of “congestion in reporting requirements”, as one of our writers this month tactfully puts it, the danger is that c-suite decision-makers view all this as yet another compliance issue to be managed away. That mindset will only add to the costs and miss the opportunities. A common theme across all the advice we offer here is that plans need to be flexible and be adapted to your own business needs – the path forward is indeed “non-linear” as one of our contributors says.

We continue our monthly look at topics of importance for people moving their businesses onto a more sustainable and responsible path.  Few issues have more buzz right now than artificial intelligence.

If 2023 was the year everyone seemingly started wondering and worrying about the risks and opportunities of AI, then already, such is the pace of change, this year looks like being one of rapid adoption and adaptation. As I write this, news comes that British AI pioneer, Mustafa Suleyman, is joining Microsoft to lead its newly formed AI division. He has written thoughtfully about the dilemmas at play here and the need to maintain control over powerful technologies.

We kick off this year’s regular monthly focus on actions businesses can take to be more sustainable, by looking at risk. Time to put on a metaphorical hard hat. From where I sit, the outlook is intensely depressing, whether in Eastern Europe and the Middle East or further, from the South China Sea and beyond.

Even more sobering is this year’s Global Risks Report from the World Economic Forum, published in January. Both its two-year and ten-year outlooks are markedly more negative than previously. Topping the list of respondents’ immediate worries is extreme weather, next is AI-generated misinformation, followed by some 20 other concerns. WEF’s contextual analysis identifies four structural forces at play, with climate change being one. Our writers this month advocate techniques such as scenario planning and carbon pricing to mitigate or at least anticipate this. Our guest post highlights help on transition planning.

Our year examining priority Actions for Business ends this month with a look at alternatives to the traditional economic model of take-make-waste, then repeat.

Of all the topics we’ve addressed, this is the one where, for me at least, the gap between opportunity and reality is most frustrating. We’re actually going backwards, according to data from the Circular Economy Foundation cited by one of our contributors here.

On the good news side of the equation, one positive outcome of the COP28 summit – behind the roller coaster will-they-won’t-they final text agreement – was nature-based solutions being put centre stage. We looked last month at just how much of world economic output is based on nature, with food supply accounting for a third of GHG emissions.

With COP28 fast approaching as I write this, all eyes are on climate. So you might wonder why this month we’re focusing on nature. No surprise, really, as in Actions for Business, we try to think a few steps ahead – read on to learn more – but in any event, climate change and biodiversity are intrinsically connected. 

Sustainability practitioners in business are pretty familiar now with the whole architecture around net zero, with its targets, timetables and seemingly new language, or at least new acronyms – TCFD, SBTI, CSRD and the rest. 

Fast approaching, in fact already firmly here, is a new set of tongue-twisters – TNFD, NBS, GBF, FLAG, to cite a few. It’s time to buckle up and get ready to ride the next wave of initiatives that are addressing arguably the more pressing crisis we face, on biodiversity. Underpinning all of this is the stark reality that more than half the world’s GDP is directly dependent on nature, according to the World Economic Forum. If climate still feels like a theoretical or long-term threat for some, dependence on agricultural raw materials is a present-day reality.

This month we’re looking at how social and environmental factors can align and reinforce each other. Such win-win outcomes have long been at the heart of the sustainability and responsible business agendas – the proposition that it’s not a binary choice between profit on the one hand and people and planet on the other; on the contrary, getting the latter right can drive successful, enduring businesses.

We have a practical example of this in a case study from EDP, the integrated energy utility with major markets in Portugal, Spain and Brazil. It is tackling access and inclusion, supporting communities affected by closed thermal power stations, and promoting efficiency in use, not just switching supply sources to renewables.

Our focus this month is on human and labour rights – earlier this year our forward-looking Actions for Business report anticipated growing interest in the topic. This has proved timely, given the evident challenges in switching to a “green tech” future at the speed governments say they want.

A case in point is accessing essential metals and minerals in the volumes implied in transition plans: we report on the labour rights issues in mining for cobalt in the Democratic Republic of the Congo. On the wider human rights agenda, our guest contributor is scathing about how few companies have gone beyond platitudes, to the extent of examining their business models – the result being that soft expectations among stakeholders are turning in hard law regulations by governments (such as the coming EU due diligence directive). In response, my colleagues offer a four-step approach for practitioners wanting to get a grip on this agenda.