Draw a line in the sand: Businesses can’t cop out of the climate crisis

The climate crisis is the most serious challenge humanity faces. COP27, the United Nations Climate Change Conference, that took place in November offered an opportunity for the world’s governments to come together and prevent further catastrophic environmental damage.

The stakes could not be higher. It’s human nature to steer our thoughts away from bad news, and it’s easy to suffer from a kind of climate-fear fatigue: we simply tune out the increasingly dire predictions. But we can’t afford to be complacent.

Let’s face a very uncomfortable fact: if temperatures rise 1.7 to 1.8C above 1850s levels due to ongoing carbon emissions, the IPCC estimates that half the world’s population could be exposed to life-threatening heat and humidity. Half the world’s population: that’s 4 billion people at risk of losing their lives if we don’t pull together.

The leadership conundrum

The furore surrounding the Prime Minister’s will-he, won’t-he attendance of COP27 focused the public spotlight on environmental leadership. We are glad that the PM chose to go, but the very fact that attendance was up for debate is alarming.

In this time of crisis, leadership and bold action are needed at every level. And not just in the political world but in the world of business too. And yet, the hesitance to take the reins and guide organisations towards a net zero, planet-friendly future is palpable. It’s not because business leaders don’t care about the environment—it’s often that they are afraid of criticism.

Put simply, no matter what a business does, its leaders will face criticism. Sustainable business steps will be deemed insufficient greenwashing by some, while for others, any action will be derided as woke activism. What’s more, changes can be costly. In a big firm, a leader needs to persuade board members or investors to back their proposals. Right now, some business executives are unwilling to face that fight – but fight we must.

It takes a leader to lead

Sustainability is quite a nebulous concept. There isn’t a handy rulebook you can read. So this fear of making a misstep is understandable. But the inevitable cost of inaction here is a far greater cause for caution. Dynamic leadership by executives with grit and gumption is essential if companies are going to be thought of and remembered for the right reasons.

Take Paul Polman of Unilever as an example. Under his leadership, the Unilever decoupled business growth from its overall carbon footprint (in other words, the organisation was able to grow without increasing its emissions). He went on to create Imagine, an organisation that helps businesses tackle poverty, inequality and climate change.

Alternatively take Patagonia founder Yvon Chouinard who gave the company away to a non-profit so that profits would go directly to fighting the climate crisis. Yes, he received no small amount of criticism because it saves the company from paying taxes. But all good decisions attract criticism. Even if tax savings were the primary intention, and that’s highly debatable, it still moves the needle in the right direction.

Breaking the individual responsibility narrative

For too long, governments and businesses have pushed responsibility for eco-friendly measures onto the individual. But it’s not down to the consumer and the employee to change the world. As with any endeavour, cooperative action is needed, and only a determined leader can harness and direct the combined efforts of their workforce and supply chain towards a greener goal.

As businesses, we need to eliminate the pressure from individuals and own the difference that can be made. Where our companies have gone wrong in the past and contributed to the pollution that’s damaging our planet needs to be acknowledged so we can make amends for our history.

It’s painful but necessary. We did this at Amba when we acknowledged we’d been recommending pension schemes for 25 years that are actively damaging the planet. Now we advocate a net-zero pension pot, and in the process of moving our employees to a net zero scheme, but this required us to make a full 180 degree turn.

Jump before you’re pushed

Soon, climate action will be mandated by legislation, so there’s no point delaying due to fears of criticism or accusations of greenwashing. It’s simply just good business sense to start now: companies will be in a more powerful position if they take voluntary action rather than waiting until they’re legally forced to take steps.

Time is running out. As we’ve discussed before, the planet can’t afford to wait for perfect, risk-free strategies. In some respects, it’s easier for SMEs to make environmentally-friendly changes than for bigger companies. Smaller enterprises have the agility to adapt on the go. But whatever the size of your business, taking even a little step is better than doing nothing.

At this stage, it’s not a case of choosing to be benevolent or not. 85% of HR professionals say that to attract and retain the best talent, companies have to put action on climate change and social purpose at the heart of what they do. For more research into why business-as-usual strategies are costing companies their people, check out our HR leaders report.