In it together

We begin the year 2025 with the last of our ‘actions for business’ briefings – one that is arguably the most fundamental of all.

There’s little economic activity that isn’t dependent somewhere along its value chain on the natural world – from obvious sectors like food, pharma and energy, to the healthy eco-systems on which we all rely for fresh water and clean air.

Yet the looming crisis in bio-diversity is being overshadowed by (welcome) international attention to climate change. 

The concept of a circular economy was first cited in the 1930s to make a contrast with old linear forms of production. The earliest recorded use with environmental connotations, however, was not until 1989, when the Los Angeles Times hastily wrote that companies must begin moving away from the 1950s throw-away society “in the next decade” if they were to survive. Full marks for analysis, if not predicted timelines.

Our focus this month is human rights – a topic so broad that businesses can have difficulty deciding what it really means, are unsure what to do, or where to put it on the ubiquitous materiality maps that underpin many strategies and reports.

Help is at hand.

Judging by the squeals of pain, the burden of reporting on sustainability performance is mounting. What started as a voluntary multi-stakeholder movement (I’m thinking Global Reporting Initiative here) has mushroomed into an alphabet soup of initiatives. Many are now effectively mandatory, thanks to UK and EU governments taking an interest, with the SEC joining the party. Some will say it’s a good thing, too. For years, non-financial reporting focused on good news stories or, latterly, on the elements companies chose to put into their sustainability strategies, while issues in the ‘too difficult’ box were neglected.

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.