In December, world leaders made a landmark decision at COP28, in Dubai, to transition away from fossil fuels. While many believe the UAE Consensus contains too many loopholes for oil and gas companies, now is not the time to get bogged down in anger or disappointment about it not going far enough. It represented progress and we must move forwards. As we enter a new year, it’s time for real climate leadership.
Corporate climate leadership
There’s no time to waste, especially for the business world. Now is the time to step up and fill the climate leadership ‘vacuum’. In the UK, our political leaders are failing to act, even as the crisis escalates all around us – with the earliest weeks of the year already marred by extreme weather events and flooding.
In 2023, the UK Government made many concerning decisions – like watering down green policies and even a commitment to award new North Sea oil and gas licences. Such backwards steps have created confusion among global investors, businesses and consumers about the UK’s pathway to net zero and even its fundamental intention of achieving it. With the deadline to net zero just over a couple of decades away, we now need the corporate world, with all its influence and innovation, to take the lead.
Those of us running purpose-driven companies must have the courage of our convictions. It is down to us to set our own ambitious climate plans and stick to them. It’s how to send the right signals to all other businesses and our customers about the necessary direction of travel and inspire wider action. At the same time, it will tell politicians that achieving net zero must be at the forefront of any manifesto in this crucial election year.
Debunking misinformation
In the current confusion about how the UK is to reach net zero, business leaders need to set an example by being openly and consistently committed to driving down their own emissions and, where possible, to help their customers to do the same. That’s how we give confidence to consumers, competitors and politicians that they can follow suit.
This involves debunking the many myths that persist about moving to a green economy. They are a key obstacle to a viable future. In fact, the World Economic Forum’s latest Global Risks Report found that misinformation and disinformation is the most severe global risk anticipated over the next two years.
The false narrative that climate action is simply too costly prevails in many quarters. But all human activities, including business and financial transactions, depend on a habitable planet. And there will be more jobs and new skills in a green economy than in sticking with polluting fossil fuels. Globally, the International Energy Agency estimates that the transition towards net zero will lead to nine million extra jobs in the energy sector.
To achieve net zero, those of us in the corporate world must do what we can to counter disinformation. We need to be vocal about the fossil fuel age being over. Everyone needs to understand that the energy sources of tomorrow are renewable and the global economy depends on transitioning to them, and whilst this isn’t easy, nothing worthwhile ever is.
Transparency
Transparency is key to building consumer trust and accelerating widespread climate action. As things stand, too many companies aren’t upfront about the nature and impact of their investments or operations. This applies to many sectors, including financial services.
Research we undertook at Ecology Building Society found more than half of people in the UK (53%) don’t know how their bank or building society uses their money. And nearly two-thirds (65%) find the current financial system too complicated. It remains so opaque that it’s hindering informed consumer choice and, consequently, green growth. As the climate emergency intensifies, savers and borrowers need to know that their money is not being used to make the situation worse.
Likewise, other sectors must be clear about how they’re powering their operations, how they treat their workforce and the source of their raw materials. Only by being clear and open about the detail of their businesses can they attract the increasing number of consumers who want to buy from ethical and sustainable brands – and grow that market.
Public climate consciousness
The public desire for climate action is there. With our weather patterns changing before our eyes and 2023 down as the hottest year on record by a substantial margin, consumers are anxious about the climate crisis. For example, according to our research, three-quarters of people (74%) want their money to have a positive impact on society and the environment.
To attain net zero and meet these consumer needs, we need radical transformation. In the financial sphere, this means creating new kinds of products – like incentivised green mortgages for energy efficient homes or properties featuring clean energy generation tech, such as solar panels. We also need to create suitable loans for customers who want to retrofit their homes with green measures, like better insulation. With money being openly used to fund such initiatives, customers can then be assured that their savings are helping to build a more sustainable future.
A year of business action
New Year is a time of reflection, but also resolution. Those of us fully abreast of the climate science may have not got the deal we wanted at COP28, but now we must put our energies into driving the mass action that will achieve net zero and create a better world for everyone. With 2024 set to be a year of yet more political turbulence in the UK and beyond – potentially resulting in more prevarication or backstepping on climate – responsible business owners need to fill the leadership gap.
