“How can I help to create the conditions under which the world that I want to see becomes possible?” ― Mike Berners-Lee, There Is No Planet B
Climate change is a business issue. We all want to leave the planet in a good place for those who follow us, but government initiatives and economic pressures are making emission reduction an operational imperative as well as a matter of conscience. Even if you disagree with either the reality or the causes, there’s a critical mass of customers and investors who have no doubts and who will regard the lack of a credible plan for emission reduction as a reason not to do business with you. As the Cambridge Institute for Sustainability Leadership puts it:
Climate change is increasingly taking center stage in strategic business planning. The transition towards more resilient, sustainable, and inclusive ‘net zero’ emissions business models – once seen as a peripheral issue for businesses appealing to niche Environmental, Social, and Governance (ESG) markets – is now central to strategic business planning, corporate hedging, and risk management. 1
The time for making excuses is over
CDP, a not-for-profit charity running the gold standard global disclosure system by which investors, companies, cities, states, and regions manage their environmental impacts, estimates more than 200 major buyers, with a combined purchasing power of US$5.5 trillion, have asked their suppliers to disclose through its platform (https://www.cdp.net/).
In February 2021, Deloitte and the Institute of International Finance produced a report entitled “The Future of the Chief Sustainability Officer”2 - a role they describe as “sense-maker in chief”. Tree-hugging nonsense? Not unless you’re categorizing companies like Nike, DuPont, Mastercard, P&G and Nissan as tree huggers. All of them have Chief Sustainability Officers on their Boards, with Nike’s dating back to 2004. Time to wake up and smell the carbon-neutral, organic, Fairtrade coffee.
Whilst the pressure for change is undeniable, demonstrating the environmental impact of specific initiatives hasn’t been easy. However, with greenwashing skepticism on the rise, accuracy and transparency are essential.
The time for making changes is now
If you’re going to take practical steps toward reducing your organization’s greenhouse gas (GHG) emissions, or even just offsetting them with carbon credits, first you need to understand what goes on in your organization (to a reasonable level of detail) and the relative environmental impacts of those activities. The second challenge is to understand whether a change in one part of your organization reduces overall carbon emissions or simply moves them elsewhere. For example, automating part of a business process may well reduce the number of human resources required, along with their GHG contribution, but may replace them with compute resources which have their own GHG contribution. A better alternative might be to change the operating model to eliminate that process step altogether. Similarly, if organizations decide to outsource, how emission efficient is their provider? What impact will a change have on suppliers? Can you claim carbon neutrality if you’re just moving emissions from scope 1 (direct) to scope 3 (Indirect)?
BusinessOptix has been working to make these questions easier to answer and Net Zero design decisions easier to make. It has adapted its platform to enable its users to associate ESG metrics to a process in the same way they currently associate the number of resources it requires and the systems it uses. The values for these metrics would come from an expert or a GHG calculator. Once your organization’s processes have associated ESG metrics, you can use BusinessOptix’s simulation module to assess how a change in a process step will affect carbon emissions in the same way you have for people, cost, customer experience and so on. Linking ESG metrics directly to a process ensures it stays in context and is easy to visualize across any supply chains.
Win/Win for the planet and your business
The benefit of using BusinessOptix’s platform is two-fold; you can:
- design changes that optimize emission reduction alongside say cost and customer experience, swapping “either/or” choices into “and”. Trade-offs become easier because the relative impacts on all business metrics are clear to see.
- not only demonstrate that initiatives targeting emission reduction work but can also check change initiatives focused on more traditional business outcomes don’t increase emissions - “Do no harm” can become both a design principle and a sign-off criteria.
Each year, sustainability becomes a more urgent issue. As Deloitte puts it, “The pace of change with respect to sustainability is increasing. International standard setters, national legislators, and industry-specific regulators are all reflecting this changing reality.” Factor in consumers’ increasing preference for low-carbon brands, the fact that climate change is the overriding concern for 26- to 36-year-olds, and the growing power of activist investors and the only sensible conclusion is that any company without a credible plan for carbon neutrality is going to find itself at a competitive disadvantage. Luckily BusinessOptix and its partners can provide you with the tools to take control of your journey to Net Zero, enabling you to make smarter choices because you understand the impact transformation opportunities have on delivering your organization’s sustainability objectives.
References:
1 https://www.cisl.cam.ac.uk/news/blog/why-the-transition-to-net-zero-is-businesss-business
2 https://www2.deloitte.com/global/en/pages/financial-services/articles/the-future-of-the-chief-sustainability-officer.html
