Companies are becoming more and more encouraged to make bold commitments in the bid to address the persisting issue of climate change together with the other challenges associated with it.
Despite this, many of these commitments either do not come to fruition, or are too slow in becoming implemented, with various business leaders failing to consider all of the challenges involved in making to a net zero footprint viable.
In order to fulfil the goals that they have put in place, businesses need to address various financial, organisational, and regulatory requirements, all while being brave to take the next step for the good of the environment and the future of society.
The urgent need for action when it comes to climate change has made headlines for various years, yet the application of sustainable practices has been far too slow in the climate challenge.
Therefore, apart from authorities, business leaders must also instigate such change. This is especially the case if they aim to meet the European Union’s (EU) 2030 Climate Target Plan, which seeks to cut emissions by at least 55 per cent by 2030, placing Europe on the road towards becoming climate neutral by 2050.
Hence, here are five practices business leaders can put in place within their companies to be as sustainable as possible while not abandoning profitability and productivity.
Nowadays, climate action has become a central part of companies’ strategies, thus a focus on it does not differentiate one business from another.
In order to effectively get an advantage over other companies in this area, companies have to assess their strategic levers and see whether competitors have overlooked certain ones.
First of all, products and services should be assessed against those of competitors to ensure that their portfolio is sustainable, introducing decarbonised products and services where possible. Such short-term changes will make a difference in terms of funding the long-term agenda.
Additionally, companies need to make the most out of the fact that investors are now more likely to invest in businesses that are more focused on green growth.
A company might have the right green portfolio in place, yet it may still find it difficult to meet its net-zero aspirations if it does not have the right leadership, organisational structures, or roles.
Climate action is reliant on decisions made by those at the very top, so business leaders must be aligned on their sustainability ambitions and also ensure that employees fully understand the company’s climate goals and their roles in the transition.
Business leaders can do so by establishing a dedicated unit focused on monitoring the execution of the climate strategy, while also clearly distinguishing the roles of each individual in implementing the strategy.
Additionally, business leaders need to adjust their hiring strategies to have the right talent and skills in hand to build expertise in areas like ESG, renewables, and green financing, among other things.
The push for net-zero emissions ultimately cannot be done alone.
Businesses must work with other organisations, sectors, and value chains to form ecosystems of diverse and committed players who can push for significant change in the area at a steady pace.
By working together, companies can finance certain green initiatives more easily, thus paving the way for more breakthrough innovation in the area. The Malta ESG Alliance is a local example of such a coalition, bringing forth companies from various economic sectors to show their commitment to the cause.
Transparent policies are crucial for companies who want to work towards sustainability, as these allow them to put in place existing technologies at a quicker rate and invest in new ones with less risks.
Businesses need to actively engage with regulators to propose and support policies to accelerate the adoption of green technologies.
These policies also help promote decarbonisation in public procurement, as they make it clear to suppliers that Government sees climate impact as an important selection criterion.
The push for a transition to net-zero emissions will most likely prove beneficial to society as a whole, yet it may also prompt increasing energy tariffs and job losses in the fossil fuel sector.
As a result, business leaders need to plan ahead to have a smooth transition, with this including programmes for reskilling and upskilling affected workers. Workers have to be educated and ready for the changes that may be in store, both within the company, and in the market as a whole.
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