That’s because, traditionally, sustainability metrics haven’t been seen as being that important to the core business and as a result have not been subject to the same levels of scrutiny and control applied to companies’ financial information. This is the year that will change.

Regulators tighten rules

Over the last 12 months, regulators are not only getting more specific in their expectations; they are also moving from voluntary to mandatory disclosure:

• The UK now requires large companies to report on their climate-related risks in line with the recommendations of the global Taskforce on Climate-related Financial Disclosures (TCFD).
• The EU Corporate Sustainability Reporting Directive (CSRD) means that companies will be required to publish detailed information on sustainability performance.
• The Transition Plan Taskforce (TPT) is strengthening disclosure requirements on net-zero plans.
• The US Securities and Exchange Commission has proposed rule changes that would require climate-related disclosures.
• At COP 27 in November 2022, UN Secretary-General António Guterres called for greater accountability and verification in a bid to end greenwashing.

Investors expect more

Increasingly, investors are looking to companies’ environmental, social and governance (ESG) metrics before making funding decisions – and are often finding them lacking. This was highlighted in a recent EY Global survey, which found that:

• 99% of investors utilise companies’ ESG disclosures as a part of their investment decision-making process.
• 76% of investors believe that companies are highly selective in what information they provide to investors, raising concerns about greenwashing.
• 80% of investors said that too many companies fail to properly articulate the rationale for long-term investments in sustainability.

Stakeholders must be satisfied

Companies have become increasingly alert to the way non-financial issues can impact their key stakeholders, including employees, customers and suppliers as well as investors. This is impacting business-critical areas such as investor confidence, customer satisfaction and demand, talent retention and even license to operate:

• 57% of consumers are willing to change their purchasing habits to reduce negative environmental impact.
• 70% of UK employees expect their employer to take action on societal issues.
• Companies with $4trn of purchasing power are requesting ESG information from suppliers worldwide.

Without robust non-financial information, businesses will not be able to adequately address these stakeholder concerns.

CFOs rise to the challenge

These pressures are making finance leaders, who in the past may have been reluctant to integrate sustainability into their reporting processes, sit up and take notice. Put simply, if the company is going to be held accountable for its non-financial performance, then the CFO must have total confidence in its reporting. That means putting in place the sort of high-quality processes and controls for non-financial metrics that are used for financial information.

Generating value

The benefit of this forward-thinking approach can be broad and far-reaching. With proper metrics and management buy-in, a business is much better placed to understand the role of sustainability in driving business performance and creating long-term value. The connection between sustainability and strategy becomes clear and the need to apply it throughout operations rather than in the narrower field of sustainability reporting or health, safety and environment also becomes apparent.

While external pressure from regulators, investors and other stakeholders are key drivers, the creation of better sustainability metrics can help businesses to better manage risks and have confidence in the progress of sustainability plans. Unlocking this improvement means focusing on the sustainability issues that matter most to the individual company and investing in the key performance indicators (KPIs) that measure them best, putting in place the controls that provide assurance to management teams and investors. Given the increasing appetite of investors and customers for engaging with sustainability leaders, stronger ESG metrics can also become a powerful competitive advantage.

Looking ahead

With these actions in place, 2023 looks set to become the year in which any remaining fluff and puff is finally replaced by meaningful and accountable disclosures that will not only reassure regulators but also support growth.

Leadership teams must better understand which sustainability measures are most important to the business and its stakeholders and why. Stronger processes need to be put in place to build confidence, not only in the delivery of critical sustainability programmes, but also in the data on which they will be judged. This will require stronger governance, accountability, documentation, quality assessment and control. It will also mean choosing technology platforms that support data confidence and completeness. Ultimately, it will be about delivering better data that can make a real difference to the delivery of both business and stakeholder outcomes.

Crucially, modern slavery can occur in any type of organisation, large and small, at all stages in the supply chain. For example, there have been high-profile cases involving migrant workers trapped in debt bondage on farms supplying the large supermarket chains from where we buy our groceries. With more than 40.3m people worldwide estimated to be trapped in conditions of modern slavery, this is a sustainability issue. Tackling it is part of meeting the UN Sustainable Development Goal of enabling inclusive economic growth and decent work for all.

Even when modern slavery isn’t a direct problem, organisations have a responsibility to ensure it’s not an issue somewhere in the supply chain. A starting point is for organisations to understand the vulnerabilities associated with modern slavery – and to see it as a risk no business can afford. Because the reality is that it’s not just a corporate risk – it’s a serious violation of people’s fundamental human and labour rights.

And it goes beyond that. Once an organisation puts in place supply chain transparency to prevent, identify and manage modern slavery risks, they are better placed to detect other vulnerabilities, whether these are environmental, health and safety, or labour concerns. Moving from risk to resilience on modern slavery is a way to protect an organisation from a whole suite of challenges. And while in the UK only large companies are legally required to declare their modern slavery prevention work, communication by smaller organisations that supply chain risks are being adequately addressed can offer competitive advantage.

The why is clear, but how can organisations move from risk to resilience and support sustainability goals? For starters, it means going beyond being satisfied with mere compliance with legal and statutory duties. It means setting a clear and common path to meaningful action to identify and help eradicate modern slavery risks, regardless of size or sector.

There are many strategies available, and for many organisations it will be an iterative process. One key tool is alignment to an international standard, which can provide a roadmap to achieving best practice. At BSI we are helping organizations of all sizes understand where to start and what practical action they can take.

Developed with support from key partners such as the Slave-Free Alliance and a Survivor Alliance representative, BSI’s standard on modern slavery aims to support organizations in understanding and managing this risk as part of legal and non-legal frameworks. It includes guidance on preventative measures, on identifying, analysing and evaluating exposure to modern slavery risks, approaches to addressing identified risks, remedying modern slavery practices, and reporting mechanisms.

The reality is that we have a certain image in mind when we hear the word slavery. Modern slavery doesn’t always manifest itself in obvious ways or places – but its scale means all of us have a part to play a part in rooting it out of supply chains. Going the extra mile to address wider risks associated with modern slavery, and taking a systematic approach, will enable organisations to truly move from risk to resilience and build a sustainable future of fair work and dignity for all.

WATCH ON-DEMAND: 30-Minute Masterclass: Tackling modern slavery in your supply chain

edie’s recent webinars on sustainable supply chains are now available to watch on-demand, featuring speakers from Ibstock Brick, Golden Agri Resources, Carbon Quota and BSI.

Over the course of 90 minutes on the afternoon of 15 February, edie delivered a 60-minute webinar exploring crucial interlink between supply chain sustainability and net-zero; and a 30-minute masterclass focused on how the Modern Slavery Act can be used to tackle inequalities and enhance social sustainability at every point in the chain.

-CLICK HERE TO WATCH OUR SUPPLY CHAIN SUSTAINABILITY ONLINE EVENT ON-DEMAND-

Undecided whereas working for a tobacco company was the right way to drive change, now, looking back, I’m glad I made the leap. Companies across industries have increasingly had to reckon with their impact on society and the environment, and PMI is no exception. For us, this has meant disrupting our traditional business from the inside out and leading the industry in an unprecedented transformation toward a smoke-free future. As such, addressing the health impacts of cigarettes (aiming to make them obsolete) is our core priority.

Yet, as the impacts of climate change unfold in front of us, so too do the most pressing sustainability issues of the moment. As we embark on a new year together, I want to highlight three areas that are top of mind for me. My hope is that together we can see real progress on these (and many other urgent challenges) amid a rapidly changing landscape in the year ahead. There’s no time to waste.

Climate justice

It was encouraging to see climate justice and the links between environmental and social issues take center stage at COP27, but we can’t stop there. Whether we are successful in avoiding the worst climate change impacts will depend in large part on the extent to which the international community takes a human rights–based approach to mitigating and adapting to climate change. Inequality exacerbates the effects of climate change, more deeply affecting those living in poverty, making them even more vulnerable to its extreme impacts. These include increased forced migration or population displacement due to food insecurity, poor sanitation, and lack of access to water.

At PMI, we aim to contribute to climate justice at the different stages of our value chain and have implemented several programs geared toward climate protection, as well as the protection and promotion of human rights. While PMI is making good progress in this area, we recognize that much more needs to be done. We also know that we cannot create change alone. Everyone has a role to play, and together we should mitigate our impacts on the planet and people—especially on those who are vulnerable and facing heightened human rights risks due to climate change.

Biodiversity and water protection

Protecting biodiversity is critical to maintaining the quality and resilience of ecosystems on which both business and society rely. In the wake of COP15, which concluded last December with a new landmark agreement on protecting global biodiversity, we are especially mindful that when it comes to preserving ecosystems, developing nature-based solutions, and building natural capital, there’s a real need to create strong and collaborative connections between different stakeholders, including the private sector, science, and policymakers, in order to lead to nature-positive solutions.

In December 2022, PMI was proud to announce new ambitions on biodiversity and water that align with the Post-2020 Biodiversity Framework. These goals strengthen PMI’s efforts to address the environmental impacts of our business operations, which we currently manage through two main strategies: Tackle Climate Change and Preserve Nature. We also intentionally structured the new ambitions to maximize their impact around a 10-year span, from 2023 to 2033, and are eager to work alongside our stakeholders to ensure these aims are met in the decade ahead.

Transparency in reporting

As sustainability matures and gains importance inside and outside PMI, the question of how to measure ESG performance is something many continue to grapple with. We have long expressed our support for more rigor in sustainability-related reporting and disclosures—and not just for companies, but also for ESG ratings and related products. There is a need for greater transparency, more robust methodologies, and better clarity on definitions and assumptions. We certainly welcome recent developments leading to more consistency in standards under strong governance frameworks.

Accordingly, we at PMI have focused on developing a clear and accepted process for establishing concrete definitions, documentation, and controls for sustainability with the aim of standardizing how we measure ESG performance. During 2021, we developed a bespoke Sustainability Index to measure and communicate progress toward achieving our 2025 Roadmap using a set of clearly defined and verifiable metrics. Meanwhile, our ESG KPI Protocol establishes a framework that is both specific to our company and clearly defines KPIs that can provide our organization with a method for making the connection between our company’s purpose, strategic direction, financial performance, and environmental and social considerations.

As companies continue to set ambitious climate goals, we encourage them to be transparent in their progress to ensure greater accountability as we collectively work toward a more sustainable future.

As we take on a new year and new challenges together, transforming for good and driving positive change forward, I hope we can all remember Hemingway’s ‘The Sun Also Rises’ and his comments on how change happens— little by little, then all of a sudden. So let us continue, knowing that progress may not be readily visible, but that each step forward makes a difference.

My dad worked as a substation craftsperson, and when I was a child, I was always inquisitive and eager to learn how mechanics worked from him.  I wasn’t initially looking for an apprenticeship myself; my interest was in animals and conservation. I went on to study veterinary medicine at university, but I soon realised that formal learning was not the right path for me. At that point, I started to think about combining my love of the planet with being outside of the classroom. I was really inspired by my dad’s career and now, after three years of really hard work, I’m almost at the point of qualifying into the same type of role he did before his retirement.

There is a huge need for apprenticeships in the industry. We need more young people to choose Science, Technology, Engineering and Math (STEM) subjects and to be supported into careers in the sector. Everything in day-to-day life revolves around STEM in one way or another, and we need future generations to be equipped with the knowledge and experience to drive the energy transition.

Building a diverse workforce is a crucial part of this – everybody brings different ideas to a company, which creates innovation. As an apprentice, I know that my ideas are appreciated and I’m listened to, and you can’t progress or find new solutions to challenges without giving everybody that same opportunity. When people are free to express themselves, it creates an inclusive environment, and people are more likely to speak up and put that extra effort in if they feel valued and heard.

There are always new ideas for how we’re going to achieve net zero, and looking ahead, I’m intrigued to see what changes are going to happen as the industry undergoes rapid transformation. I’m excited to be at the forefront of those changes– it’s a really big thing to be part of.

I think one of the best parts of being an apprentice is that we gain such a breadth of knowledge and understanding of the transmission network and how it operates. We’re not just trained for the position we’re going into – we learn about all the different roles around it. The apprenticeship is a fantastic stepping-stone and there are lots of opportunities for progression. Once I finish, I have so many career paths I can take, and I could even go to work in a completely different area of the organisation.

Alongside the physical skills I’ve learned, my personal development has come on leaps and bounds whilst working at National Grid. There are a whole host of courses available, and my interpersonal skills have improved.  I’ve been nurtured, supported, and challenged to push myself by my colleagues, and my confidence has grown significantly since I first started.

I’m so proud to have a role in delivering the energy transition – and to be a woman in STEM, pushing the boundaries of energy innovation to get us to net zero.

National Grid offers a range of different Advanced Apprenticeships and Higher Apprenticeships to recruit a new generation of talent, charged with the destiny of shaping the future of energy. Read more about their apprenticeship programmes here.

No company, country or even region can fix these problems alone. Collaboration is the only way forward.  At last month’s World Economic Forum’s Annual Meeting meet in Davos, Switzerland, world leaders were endeavoring to respond collectively to the complicated and interlinked challenges we face. Convening on the theme of ‘cooperation in a fragmented world’, they know such systemic problems require coordinated solutions.

In the same way, the fashion sector must unite to address its particular social and environmental challenges. As one of the planet’s most polluting industries, it has much work to do. For apparel manufacturers, retailers and brands this must be a year of collaboration, not conflict, of progress, not platitudes.

Seismic changes are coming our way. In response to the climate emergency, new public policies will put increasing demands on all aspects of operations. In these circumstances, the only way we make progress is if companies set aside their differences, listen to each other and find common ground towards shared solutions that benefit all, and not just some.

In 2023, we have three pressing challenges to overcome together:

Collective action to cut emissions

First, we need to agree on cutting our emissions in line with the goals of the Paris Agreement and commit to taking action. In practice, this means the entire fashion industry should set Science-Based Targets (SBTs). They are widely recognised as the most clearly defined pathway for companies to reduce emissions. Unfortunately, the fashion industry has been slow to adopt them.

To date, only 24% of our members have approved SBTs in place. As our membership organisation represents around half of the fashion industry – including some of the world’s biggest brands – and exists to enable positive social and environmental impacts at scale, this low uptake demonstrates the urgent need for much faster progress. In an effort to tackle this, we launched a new Decarbonisation Program to support and drive the sector to work towards urgent, and necessary emissions reduction. The Program will focus on collaboration, member support and delivering tools and guidance to make achieving these targets possible.

Strategic partnerships to address the data gap

Secondly, brands, retailers and manufacturers must collaborate to fill the current gaps in sustainability data. Without it, there is no credible way forward. To reach crucial climate and human rights goals, each company must first understand its current status. Otherwise, there is no way of knowing what action to take. That’s why independent, scientifically accurate and standardised data is essential.

Over the last decade, the SAC, together with our members, has gathered a wealth of verified data to measure the cradle-to-grave environmental impacts of textiles, materials, accessories, and final products. This increased transparency has enabled those within the industry to make informed decisions. The data isn’t ever complete, but it is evolving. Some crucial gaps remain that must be urgently filled; we want to see NGOs, data specialists and leading industry brands and manufacturers coming together to solve this.

Harmonised legislation for a common approach

Finally, we need harmonised legislation for the materials, textiles and accessories used to make garments and footwear, as well as for final fashion products. As a highly complex international industry, with supply chains typically crossing continents, the apparel sector can only drastically reduce its social and environmental impacts within a clear, robust and standardised framework.

We need a common language to describe sustainability, alongside a method for calculating environmental footprints that are recognised worldwide. It’s the only way organisations can undertake reliable sustainability measurements that provide the foundation for trustworthy sustainability claims. It’s how we combat greenwashing.

We are living through turbulent times, but we are in this together. Massive systemic change only happens when we are all involved. Our industry – with its immense creativity, innovation, knowledge and ability to collaborate pre-competitively – has the capacity to be an example for others.

There is still so much to be done and time is running out. The decisions we make together in the year ahead will have profound impacts for generations to come. To ensure a greener, cleaner and fairer future, they must be the right ones. For apparel, I believe that means setting SBTs, filling crucial sustainability data gaps, and harmonising global legislation. Those are this year’s crucial steps towards creating an industry that leaves the world in a better place than when we arrived, and it’s clear to me that we must tackle this together.

Skidmore has urged government leaders to grasp the “historic opportunity” that net-zero can bring, pointing out that the UK is currently falling behind on some targets and that inconsistent and unambitious policies have resulted in missed opportunities for many businesses and households. Any further delay on climate action, he warns, will risk damaging the UK’s already precarious economic prospects and stifle key growth opportunities.

The findings of this review stand in stark contrast to those net-zero sceptics across government and certain media outlets who last year tried to argue that net-zero policies could increase the financial burden on UK citizens and businesses, even suggesting that net-zero was contributing to soaring energy bills. Of course, this could not be further from the truth, with analysis in Skidmore’s review actually indicating that the average household stands to save up to £6,000 by 2050 if current net-zero policies are implemented, with this rising to as much as £14,000 if more ambitious policies are enforced.

Furthermore, analysis referenced within the review calculates that the global market opportunity for UK businesses from net zero could be worth more than £1trn in the period 2021 to 2030, while the direct costs of decarbonisation throughout the next 30 years will amount to less than 1% of UK GDP. That’s before mentioning the approximately 2% additional growth in GDP that is anticipated when factoring in the indirect economic effects of the transition, through a combination of new jobs, increased economic activity, reduced fossil fuel imports and cost savings.

So, how exactly will these opportunities be realised? Skidmore’s report puts forward a total of 129 policy recommendations designed to seize the opportunities that will result from a green economy. Amongst the key recommendations presented are a number which are aimed at backing businesses to go green, including business tax incentives and capital allowances for decarbonisation investments, a “Help to Grow Green” campaign aimed at helping SMEs to plan and invest in the net-zero transition, and new legislation and funding for energy efficiency improvements in non-domestic buildings, to help businesses save on their energy bills. At IES, we always advocate energy efficiency as being the best approach to simultaneously address decarbonisation and cost savings, and this report supports that view, highlighting that untapped energy efficiency measures are currently costing UK businesses as much as £6bn per year.

While this review provides a much needed wake-up call on the need for stronger net-zero policies, it remains to be seen whether the government will follow through on the recommendations presented. Sadly, we know that the government has been historically slow to move on some of its net-zero pledges, and often schemes which may sound promising at first have failed to deliver anywhere near the level of action that is needed to protect our environment and economy from the risks of climate change.

Fortunately, at IES we believe that there is a lot that businesses can start doing now to bring the situation into their own hands. Recently, we produced our free Guide to Reducing Business Energy Costs to help businesses improve their energy management strategy and reduce their carbon impact; all while saving costs and improving employee comfort, productivity, and other ESG outcomes along the way. It’s worth taking a look if you have not downloaded your copy already.

Furthermore, IES recently partnered with edie to create a post-COP business report on how net-zero will evolve moving forward, summarising key developments, announcements and initiatives, as well as capturing the key messages of thought leaders.

Making it happen: The Net-Zero November 2022 Summary Report is designed to act as a blueprint for business leadership as we begin to move from ambition into action, and covers all net-zero facets from green policy to innovation, to the built environment and the energy crisis, to help businesses turn ambitions and targets into action and progress.

If you haven’t already, you can download your free copy now at: https://www.edie.net/the-net-zero-november-2022-summary-report/

It is not overly surprising that some companies want to ‘green’ their image without doing the work – this has been known for some time as greenwashing – but now, many are doing quite the opposite and greenhushing by choosing not to publicise the positive work they are doing, such as making science-based targets, for fear of being accused of greenwashing.

Though these may seem to be opposing, disclosure can act as the antidote for both greenwashing and greenhushing. It offers a company a structured way to avoid the accusation of greenwash and simultaneously give them the confidence to communicate their work on climate and nature by providing a universal framework through which to measure commitments. It also allows us to track progress more easily and confirm that businesses are doing more than just making commitments.

The perception of disclosure has shifted in recent years from being a ‘nice to have’ to being a business fundamental. Last year, a record 18,700+ companies disclosed through CDP – 42% more than the previous year.

Disclosure matters as it helps set a strategy that then leads to action. Take climate disclosure – CDP’s data shows that 69% of companies disclosing for a third year have emissions reductions targets, compared to 38% in year one. It can also improve a company’s reputation, boost competitive advantage, uncover risks and opportunities, and track and benchmark progress.

In the past we have said that companies have time to start their climate disclosure journey, but that landscape has shifted and the pace of change needs to be much more rapid.

Getting ready for disclosure – including setting science-based targets, outlining quantifiable reductions, and getting the right governance in place – can be a lengthy process. But with mandatory disclosure fast approaching, companies need to get up to speed or risk falling victim to more aggressive legislation or market trends.

Indeed, the momentum is already here for mandatory climate disclosure, with most major economies planning to adopt some form of it, including the EU’s European Sustainability Reporting Standards (ESRS) in June this year setting pulses racing on how green companies’ commitments really are.

Mandatory disclosure on nature will not be far behind as the agreement at COP15 in Montreal provided the foundations to set a pathway to making biodiversity disclosure a business norm globally.

However, it is still possible for companies to get ahead of the curve for climate and nature disclosure and, we have seen already, the sooner companies disclose, the better it is for business and of course the planet.

Greenwash will end with transparent data and comprehensive transition plans. So, let us build on the momentum and ensure 2023 is the year of disclosure on climate and nature.

So, I was delighted when in December, the Montreal Conference on Biodiversity (COP15) set a global goal for nature – to protect 30% of land and sea by 2030. This protection is vital and urgent – WWF’s Living Planet Report found that wildlife populations declined by 69% since 1970.

One of the thorny issues at COP15 was finance. After walkouts from some delegations, the conference agreed on a target of $200bn for conservation initiatives from public and private sources.

I am proud that our government fully supports this financial pledge and is committed to play its part in meeting it. But to do this, we must align mainstream finance with its goals – which brings me to the Financial Services and Markets Bill which is currently passing through Parliament.

The Bill sets out how the financial sector will be regulated over the next decades. The bill must align with our international commitments to nature and climate.

There is fierce competition by the world’s leading financial centres to attract green investment. ESG investing is the fastest-growing segment of the finance sector, and the sustainable finance market grew to reach $1.6trn globally in 2021.

For the UK to become the global centre for green finance, we need to show we have a well-regulated market that can protect investors from greenwashing and support companies leaning into the green transition.

This Bill sets out whether the UK’s financial regulators will have the teeth to, for example, tackle greenwashing or not and, as it stands, the Bill will jeopardise the UK’s reputation as a supportive market for green finance.

This is why regulators need a statutory objective on climate change and nature. Failure to do so will give our international competitors an open goal. And without amendment, the Bill will not future-proof our financial sector to fund the transition to a net zero, nature-positive economy.

Unlocking private finance to tackle the nature and climate crises is a huge opportunity for UK businesses. The private sector knows this, which is why a dozen financial institutions have already written to the Bill Committee expressing their support in amending the current Bill to make the UK the world’s leading green finance centre it needs to be in the coming decades.

The finance sector contributes more than £193bn (including £75bn in tax) to the economy and employs 2.3 million people across the UK. If we change how we regulate it, it is vital that we get it right.

Getting the Bill right will be key to the Government achieving its ambition for the UK to become the world’s first net-zero-aligned financial centre and to protect and restore nature. It will help unlock the finance needed to protect forests, invest in renewable energy, insulate homes and drive climate and nature-positive growth across the UK and the UK economy.

This Bill is a key plank in setting the architecture for financial regulation for at least a generation, yet it does not address how we tackle the twin crises of nature loss and climate change and does not do enough to deliver on the government’s promises on nature or net zero.

That is why I will be supporting a new objective for the UK’s financial regulators on climate and nature.

The climate crisis and escalating global instability have drawn attention to the need for companies to not only act in alignment with their purpose but live it every day. Increasingly, their customers, investors and regulators also want to know if organisations are part of the solution to society’s challenges and aspirations.

The Rising Prominence of Corporate Purpose

The way consumers treat organisations that act either without purpose or contrary to their stated purpose is changing – reflecting new expectations of their role in society.

Newly published figures from BSI reveal that two-thirds of UK consumers say that they would abandon firms that purpose-wash. Indeed, close to half (47%) of adult UK consumers make purchasing decisions at least in part based on a company’s stated corporate purpose.

As the cost-of-living crisis continues, consumers are also changing their spending behaviors. These changes are most pronounced for younger consumers, who are also the demographic most keenly attuned to a business’s consistency, or inconsistency, with its approach to purpose.

BSI’s research found that nearly three in four of 18- to 24-year-olds actively consider an organisation’s purpose when making purchasing decisions. They are also more likely than other demographics to react negatively to purpose-washing, with 80% more likely to abandon businesses acting inconsistently with their purpose.

Most, but not all, organisations have a stated, written purpose beyond profit – close to two-thirds (63%) according to the survey. And nearly four-fifths (78%) consider the purpose of other organisations they use or work with. Nevertheless, two-thirds do not frame or measure the delivery of their purpose through an independent third party.

What’s clear is that organisations that state their purpose are now not only crystallising their company’s existence, but they are also making a promise to consumers – one that younger consumers in particular are starting to take notice of. But in today’s world, how can business leaders stay the course when it comes to their purpose?

The Route to Purpose

As the generation that values purpose-driven organisations reaches adulthood, it’s clear purpose initiatives will be critical to the long-term success of profitable enterprises. At BSI, we have published a new purpose standard that provides a practical guide for organisations seeking to become purpose-driven organisations.

Naturally, one size does not fit all when deciding on and operationalising a corporate purpose. This will depend on factors such as a company’s size, sector, industry, culture, starting point and available resources. That’s why the standard describes the worldviews, principles and, crucially, the behaviors which organisations aspiring to be purpose-driven can flexibly apply.

The Turning Point

There is no better time than now to realise how organisations can play their part in accelerating progress to a sustainable future for the long-term wellbeing of all. The world in 2023 faces multiple crises where organisations can have a real impact.

The benefits of clarifying purpose are wide-ranging, with discernible impacts on internal culture, a company’s bottom line and ability to attract the best talent, who are often very purpose-driven themselves. 2023 is the year in which organisations are reassessing how and why they do business and aligning corporate purpose for the long-term benefit of people and planet.

The purpose standard is freely available to download here: https://www.bsigroup.com/en-GB/standards/pas-808/

BSI and edie’s ENGAGE event

BSI’s Hayes is speaking at edie’s online sustainability reporting and communications sessions, taking place on Wednesday 25 January.

edie’s ENGAGE 2023 online event effectively combines three webinars into a single afternoon on Wednesday 25 January, with each session taking a particular format. The first will take the form of an audience-led Q&A; the second will be a series of quick-fire case studies; and the third will take a ‘masterclass’ format.

—-CLICK HERE TO REGISTER FOR ENGAGE 2023—-

Announcing the plans, the government said that “alongside the clear benefits to employees, there is also a strong business case for flexible working.”

“By removing some of the invisible restrictions to jobs, flexible working creates a more diverse working environment and workforce, which studies have shown leads to improved financial returns,” it said in a statement.

Flexible working is becoming the norm

It’s now two years since working from home (WFH) turned the world of work upside down, as organisations responded to the new reality of the pandemic-induced lockdown.

If flexible working is to continue to contribute to the workplace, employers need to think beyond issues such as company culture, team cohesiveness and productivity.

Organisations also need to spend time assessing the environmental impact of WFH compared to a permanent return to the office. And when it comes to matters such as the overall sustainability and environmental footprint of a business, there is no bigger question: “Which is better — home or office?”

Like any good conundrum, the answer is, “it depends”.

Environmental monitoring needs to extend beyond the office and into homes

On the one hand, working from home eliminates the need for the daily commute leading to fewer vehicles on roads and less crowded public transport. For many people, this is often cited as the single biggest environmental benefit of WFH as people seek to maintain a healthy work-life balance.

But any benefit here in terms of reduced transport emissions needs to be balanced against the likelihood that employees will use more energy at home for heating, lighting, and running their home offices. This becomes especially acute when firms also spend precious resources heating, lighting, and servicing under-used corporate office spaces.

For those organisations concerned about their green credentials, it means that corporate responsibility has to extend beyond the office and into the home if that’s where employees choose to work. To think otherwise would allow organisations to abdicate their environmental responsibility when employees work away from the office.

That’s why data gathering will continue to be of vital importance to understanding your corporate footprint, including how this is impacted by home/office working.

Employers have a role to promote sustainability for those WFH

For organisations that continue to use the office as a working hub, they can control their environmental impact by ensuring that the energy they use for their commercial premises is sustainable, renewable, and carbon neutral.

Of course, it goes without saying that firms cannot exert the same control over employees and how they chose to source their energy. But they can educate them to make more informed choices as part of an ongoing programme of employee engagement.

By engaging with and educating employees about energy, water and waste reduction, employers can do much to extend their environmental reach. For instance, employers can set greenhouse gas targets by working with external bodies, such as the Science Based Targets initiative, which provides a clearly defined path to reduce emissions in line with the Paris Agreement goals.

Such schemes not only help staff to be more sustainable, but they also provide practical hints and tips for a greener lifestyle.

That could mean encouragement to turn off office equipment — including PCs and printers — when you’re not using them. If you’re buying new office technology such as printers, employers need to be sure they are as energy efficient as possible and have high ink yields which can lead to an overall reduction in consumables.

Small changes here multiplied across entire workforces can make a sizeable impact on reducing emissions and meeting sustainability goals.

After all, it doesn’t matter where you work, we’re all responsible now for taking sustainability seriously. It’s up to employers to educate employees about how to reduce their energy costs while they WFH as part of their overall carbon footprint reduction programme. And they can only do that by including flexible workers in their own corporate carbon footprints and helping them to meet sustainability goals.

But this return to the ‘new normal’ has not been a jubilant occasion. Between Russia’s war in Ukraine, fractured global supply chains, the ongoing pandemic and waning trust in governments, leaders are being asked to step up in the short term rather than celebrating with champagne and mapping out images of utopia.

As John Elkington, the founder of Volans and the creator of the ‘triple bottom line’ and ‘green swans’ concepts wrote on LinkedIn: “Having served on the Davos faculty back in the day, am not sorry to be elsewhere this year. The storm of challenges we predicted back then are coming home to roost.”

This has undeniably been a challenging environment in which to keep climate high on the agenda.

The summit has, I’ve observed from a distance, put on display hundreds of people attempting to strike the delicate balance of communicating the risks of the climate crisis while acknowledging that they are speaking predominantly (directly at least) to the wealthy, as the world faces a recession.

Some got it very right. Others have been hounded for getting it wrong.

This blog lists five takeaways on effective climate comms from Davos. Fear not, you don’t need to be a world leader or billionaire to implement them.

1. Always think and rethink about how your message will land in context

In previous years, world leaders who skipped Davos have been accused of failing to care about the environment or other pressing world issues. Others have been hailed for skipping out in cases where they state that they are taking a stand against things the summit can represent to its critics, including grobalisation (think Donald Trump) and social exclusion (119 billionaires attended in 2020 and, each year, the attendee demographic is only around 25% female).

This year, several world leaders opted out on the grounds that they were needed in their countries amid the energy price crisis. This line of argument was taken by all G7 leaders bar Germany’s Olaf Scholz, as well as South Africa’s Cyril Ramaphosa.

It seems that this is only a successful line to sell if you are, actually, credibly addressing the energy price crisis and related issues in your country. UK PM Rishi Sunak has attempted to demonstrate care for the general public with new Levelling Up funding this week, but has been rapped for taking three jet flights within the UK in ten days and for continued clampdowns on the right to protest.  This comes amid continued strikes in sectors including healthcare and postal services, largely with employees unable to make ends meet.

The message here is clear: If you want to be seen to be taking a stand, you have to do the work.

This Davos has also, hopefully, prompted leaders to consider whether, in their messaging, they stand with long-standing traditions of politeness between the powerful, or with the interests of a wider group.

Several of those in attendance, including US climate envoy John Kerry and EU green chief Frans Timmermans, were rapped by environmentalists for welcoming the appointment of the new COP28 President. As expected, the UAE selected Sultan Ahmed Al Jaber. Al Jaber is the chief executive of the state-owned Abu Dhabi National Oil Corporation (ADNOC) and is also the UAE’s Special Envoy for Climate Change.  Kerry said he was a “terrific choice” and Timmermans emphasised his work on renewables. Activists say his appointment shows a conflict of interest, with the UN permitting fossil interests to permeate decisions that will affect the future for billions.

It is undeniably a tricky time to get your optics right. But there are opportunities to define where you stand and to clearly explain why. In this digital age, your choices will be resurfaced in the future. Think about who can hear what you’re saying and whether it will connect with them.

2. Do not shut yourself off from challenges

There have perhaps been fewer world leaders on the ground in Davos this year than ever before. In addition to the G7 absences, Russia was, as expected, absent. The US and China sent ministers and envoys but not their leaders. New Zealand’s Jacinda Ahern stayed back home and stood down this week, citing burnout.

This means that the cohort represented at Davos is shifting. While this opening up of spaces means there are more billionaires, which brings its own can of worms, there was also an increased presence of activists this year, many with environmental messages.

Activism has taken many forms, from direct protests against private jets; to rousing statements from Greta Thumberg at a panel also featuring Vanessa Nakate and Luisa Neubauer; to the presence of investors and academics and others looking to disrupt business-as-usual through their day jobs.

In all its forms, this activism presents opportunities for a change in stance or behaviour – or just the provision of new information. This opportunity is rarely seized by media-trained leaders.

Away from Davos, though, this isn’t always the case. Several businesses are moving to open themselves up to questioning and criticism, with the aim of improving their environmental and social impact. The Body Shop, for example, hosted a panel at COP26 with questions led by youth activists sceptical of business sustainability pledges. It has since set up a ‘Youth Collective’ who are consulted for feedback on environment-related decisions.

3. Balance risk and opportunity

A highlight of the Davos proceedings is always the publication of the annual global risks report. Taking into account the predictions of more than 1,200 experts, the report maps out the most likely and most severe risks on the horizon over a two-year period and a ten-year period.

By publishing the report at the start of the week, the WEF makes clear to attendees the sheer scale of the issues their discussions are grappling with. It also makes clear that these issues are not happening somewhere else, decades into the future – they are here, now, and are poised to worsen within a decade. Additionally highlighted are the dimensions of risk; that the environmental and social is ultimately economic.

Underplaying risk means we will likely fail to act accordingly. Using the language of risk doubtless opens the ears of financial players. But only thinking in terms of what we have to lose, and in terms of the sheer global scale, can be a recipe for paralysis induced by climate anxiety.

The WEF followed the global risks report with publications laying out the job creation and economic opportunities of creating a more environmentally sustainable and socially just world. These confirmed 60 million social jobs and 12 million green jobs by 2030 in just ten countries.

These two sets of reports balanced each other out, in a way. You can show the opportunities and make progress without forgetting how steep a hill there is to climb, and vice versa.

4. Emphasise the ‘win-wins’

Nature has been edging its way up the UN climate COP agendas for several years now. New, unprecedented commitments on forests caught attention at COP27 and, last year, COP27 was swiftly followed by negotiations on a new biodiversity treaty in Montreal.

The organisers of this year’s WEF programmes on climate and nature listed together. There were also several events covering both topics, including a session on polar ecosystems and another on nature-based solutions for low-carbon cities.

There is an opportunity, here, to communicate that, if the world’s most pressing problems are interconnected, the solutions are too. This will help to gain buy-in from anyone who is pressed for time, short on resources or confused on where to start as they try to grapple with multiple issues.

There are intersections not only between climate and nature but climate and all manner of other issues – some of which will doubtless capture hearts and minds in your organisation. These range from public health (think air pollution interventions, active transport and sustainable diets) to social inclusion and culture (providing high-skilled green jobs in deprived communities, centring Indigenous knowledge, even saving languages from extinction).

5. Go beyond pledges 

COP27 badged itself as an ‘action COP’. The hosts, in choosing this framing, were recognising how previous national and international commitments have gone unmet, with seemingly little in the way of accountability. They were making an attempt to ignite greater real-world impact, not create an ever-longer list of commitments and initiatives.

Davos meetings, perhaps to an even greater extent than COPs, are described as talking shops. Attendees hold all manner of panel discussions and speeches but no treaty is agreed upon. Yes, initiatives are launched by the WEF, but there is always the argument that one well-designed initiative that delivers on its pledges are better than several which all remain at pledge stage.

It was, therefore, welcome to not have an inbox inundated with new initiative launches. There were, however, plenty about existing initiatives being consolidated, streamlined or scaling up.

The Transforming Industrial Clusters Towards Net-Zero initiative announced nine new members, adding to its founding eight, for example. The initiative is striving to convene 100 industrial clusters to secure commitments to net-zero by mid-century. Even with just 17, it covers facilities currently generating 451 million metric tonnes of CO2e each year. This is about the same as Turkey’s annual CO2e footprint.

Elsewhere, the Giving to Amplify Earth Action (GAEA) initiative was formed to leverage philanthropic funding to the tune of $3trn annually for climate and nature. It will replicate the successes of existing programmes rather than reinventing the wheel.

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The Kunming-Montreal Global Biodiversity Framework, adopted by 196 governments just last month, commits the world to act collectively and immediately to halt and reverse biodiversity loss by 2030. In response, the world’s largest companies and their investors are scrambling to understand the impacts that they are having on nature and their dependencies on the services provided by healthy species and ecosystems. But the complexities of measuring and analysing physical and reputational risks related to nature loss can make climate change look like a walk in the park.

Measuring the impact of business activities on the climate is relatively straightforward. There is a universal metric – the emission of a tonne of carbon dioxide equivalent – that companies can use to understand their contribution to climate change. Measuring the spatial consequences of emissions is a bit trickier and depends on the locations of a company’s operations and value chain. There is a relatively clear link between concentrations of greenhouse gases in the atmosphere and the extent of likely sea-level rise or extreme weather events.

Biodiversity loss is considerably more complex. There is no single agreed metric to measure the impact of a company on biodiversity like there is for climate change. Impacts and dependencies of a company on biodiversity are very location-specific and require the measurement of the loss of a multitude of services provided by nature (e.g. water, productive soils, pollination, seed-dispersal). These services are much harder to measure and are often subject to complicated inter-relationships.

But regardless of the complexities, companies and financial institutions are beginning to accept that the risk of nature loss imposed by their activities is a challenge that demands fast, global solutions. There is a growing expectation among shareholders, regulators and customers that companies understand their dependencies and impacts on nature and begin to address them.

That expectation is enshrined in the new GBF. Its 15^th target calls on large companies and financial institutions to “regularly monitor, assess, and transparently disclose their risks, dependencies and impacts on biodiversity along their operations, supply and value chains and portfolios in order to progressively reduce negative impacts on biodiversity, and increase positive impacts.”

While target 15 calls for voluntary action, mandatory requirements are emerging for such disclosures. In 2021, France introduced Article 29 of its Energy and Climate Law, requiring that financial institutions report on their biodiversity-related risks. The EU’s new Corporate Sustainability Reporting Directive, against which companies will have to begin to report from their 2024 reporting year, contains provisions requiring disclosure on “all major environmental factors, including their impacts and dependencies on biodiversity”.

These expectations are also to be found in the major sustainability reporting and target-setting frameworks that companies voluntarily use. The Global Reporting Initiative is concluding a consultation on a revised biodiversity standard. The CDP – formerly the Carbon Disclosure Project – is introducing new questions on biodiversity this year [2023]. And the Taskforce on Nature-related Financial Disclosures (TNFD) is following in the footsteps of its predecessor, the Task Force on Climate-related Financial Disclosures, having already released a robust –  beta version of its nature-related risk management and disclosure framework. And the Science Based Targets Network will soon release its methodologies for companies to set science-based targets for nature.

All of these regulations and disclosure frameworks need data. And companies need to know where to start – what metrics to collect and from where.

To help companies and investors begin to understand their biodiversity risk, WWF has developed a freely-available online tool: the WWF Biodiversity Risk Filter. Building on WWF’s leading water risk assessment tool – the WWF Water Risk Filter – this new biodiversity risk assessment tool combines information on the locations of a company’s operations and those of its supply chain with more than 50 of the best available global datasets covering issues such as water scarcity, wildlife and ecosystem health, soil quality or the state of pollinators. These datasets are overlaid and integrated to provide a physical and reputational biodiversity risk assessment of corporate operations and supply chains to identify hotspots.

The assessment allows companies to explore and compare the underlying risks across their operations and supplier sites worldwide, and financial institutions to identify their investment risks.  Crucially, it helps large multinational companies visualise the locations and operational areas where they have high risk – these places or operations can then be targeted for deeper analysis, and opportunities to reduce the biodiversity risks that are most relevant can then be capitalised on. Such actions could include shifting to more biodiversity-friendly production practices, investing in the conservation or restoration of biodiversity, or addressing specific pressures on biodiversity.

Gathering location data is a crucial step where most action is required by investors and companies to build an accurate picture of the biodiversity risk they face and take appropriate measures to address their exposure.

Once this information is available, the tool offers an invaluable first stage in identifying and assessing biodiversity risk exposures. It also dovetails with existing and emerging frameworks for disclosure.

At WWF, we recognise the urgent need to help companies and investors understand their nature-related impacts and dependencies, and to help them achieve their sustainability commitments. We also understand that the perceived complexity of these impacts and dependencies is currently a barrier to action.   The WWF Biodiversity Risk Filter is a significant step forward in addressing this barrier, enabling the private sector to take the steps that are so urgently needed to address our economy’s impact on the natural world, and move towards a resilient and stable economic system that benefits all.