Businesses and Climate: Time to be Bolder and Faster
Earth Day 2022 just passed us by. 52 Earth Days after we ‘celebrated’ the first, we’re worse than better on climate change. If you are a business, then is “doing your bit” good enough? Is your success (and your executive pay) still only linked to revenues and net sales and market share etc.? Are we still running our businesses “as usual”? At this time which is a “code-red for humanity”, it is time to be bolder and faster.
11 May 2022 | By Jaideep Gokhale
Does anyone remember what we celebrated, just a fortnight ago? Most likely we’ve all forgotten.
We celebrated Earth Day.
Remarkably, Earth Day was first celebrated in 1970, as mobilisation of support for the environment. The awareness that climate was being impacted and something had to be done about it struck us all the way back then.
However, here’s a sobering thought: 52 celebrations later, things are far from better – in fact, in many ways they are far worse. We have left our planet a big mess (thanks to the last 250 odd years of profligacy following the Industrial Revolution). Compared to 1970, we are twice as many people living off the same land mass, and we are emitting 2.6 times the CO2 we did back then. If you live in Asia, 99 of the 100 most environmentally vulnerable cities are in Asia (as you read this, you are probably feeling the full effects of the heat wave engulfing many of us).
Please don’t take this the wrong way: I am not trashing Earth Day. While the day itself has gathered momentum globally and has succeeded in generating conversations, events, and activities, we need more. Also, we need to stop calling it a ‘celebration’- it’s more like a beseeching and super-critical call to action to every individual, business and nation, to do much more, much faster. Individuals, businesses and countries will argue that they are already setting themselves tough ESG metrics and sustainability targets; that they have been doing so for years; and that they are consistently meeting and beating their targets. So, if everyone you talk to says “Hey, I’m doing my bit”, then how come we’re still staring at a climate disaster?
For businesses, it is time for boldness and speed
The ugly truth is that the minority are making commitments and acting upon them; the majority are not committing to or doing enough. And very few are doing it soon enough. A case in point: according to a Natural Capital Partners study of the Fortune Global 500 companies (together responsible for USD33 billion revenues), although there is some encouraging news in that there is a three-fold increase in net-zero targets set, some 60% do not have meaningful climate milestones by 2030; a mere 6% (32) of companies have a net zero target set between 2031 and 2050, whereas only 1% (5) have set a net zero target to be achieved earlier – all by 2030.
In my experience with crisis management, I have always learnt that when a crisis confronts us, managing the crisis takes precedence and carrying on your ‘business as usual’ should take a backseat. And yet, it would seem as though the world is carrying on with ‘business as usual’ like nothing has happened; I shall illustrate this in four ways:
- Countries still measure their ‘success’ through how much they produce and consume; the current definition of success is outdated and needs to change;
- India is expected to see at least 250 unicorns or privately held startups with a USD1 billion or higher valuation by 2025, according to a latest report from investment fund Iron Pillar. This comes on the back of a record 43 Indian startups entering the unicorn club in 2021 alone. My question is: how many of these 43 unicorns are focused on addressing climate change or ESG-related issues? If anyone has the answer, please share. I’m going to hazard a guess and say: very few.
- Thanks to climate change, we are facing unprecedented heat waves; temperatures in many parts of India are well over 40◦ C. It is getting much too hot, too soon. It is ironic that we have caused this to happen, and even as we worry about climate change and clamour for action, we turn on our ACs to deal with the heat. Sales of air-conditioners across India this April are up 50% compared to last year and 35% more than 2019. With more air-conditioners being used, more electricity is being used and consequently, this causes more emissions. Yet, media reports and companies are gloating about ‘record sales’ – back to the first point I made;
- In the next 18-20 years, there will be much more plastic waste generated; even more plastic leaking into the ocean; and a significant increase in the quantum of plastic stock in the ocean. Rather than drastically decrease the plastic, we are hoping to (as has been said many times before) recycle our way out of trouble
In conclusion, I will advocate three things:
- The world needs to redefine how we measure success - as parents, as individuals, as companies and as nations. It can no longer just be about making the most (goods and services), having a fat salary, owning a big house, a big car, etc. Success should mean: will we leave a bigger impression on this planet than the (carbon) footprint we create?
- Companies that are leaders need to expand their sphere of influence – just like in geopolitics, influential nations do (and I mean this in a positive way); the corporate world has a much bigger role to play – with the involvement of their full value chain including suppliers, partners, employees et al, their sphere of influence to make good things happen faster and to influence smaller companies and laggards can be huge
- As businesses, we need to drop our ‘business as usual’. We need to act en masse and in unison to start dealing with the climate crisis which is an existential threat; not tomorrow but today!
Jaideep Gokhale, sustainability expert and industry veteran
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily represent or reflect the views of an employer, organisation, committee, or other group or individual.