Greenwashing, overcomplexity and the need for buy-in from all industry actors are some of the key themes that must be addressed over the next 12 months
Last week, the world welcomed in the Year of the Tiger. In Chinese culture, tigers are associated with energy, adventure and risk taking. The Year of the Tiger is a time for making big changes – marking a period where fortune typically favours the brave.
Specifically, this is the Year of the Water Tiger. In addition to its 12 animals, the Chinese Zodiac cycles through five elements: fire, earth, metal, water and wood. Water signifies softness, harmony and wisdom, and coincidentally, blue is a lucky colour during the 12 months. Add these factors to the mix, and the next year should bring about collaborative, impactful change — something much needed for today’s sustainability agenda.
Interestingly, the number 13 signifies good luck during the year. Here are 13 actions that we believe must urgently be addressed to further advance sustainability.
13 urgent actions at a glance:
- Make ‘sustainable’ a certified-only claim
- Reconsider ‘climate positive’ claims and use of other ambiguous buzz-phrases
- Don’t ignore water
- Focus on food and waste as well
- Re-evaluate ESG
- Consultants must simplify the process
- Avoid Scope 3 noise
- Deploy easy-to-use technology
- Get net zero certified
- SMEs: Get serious
- Industry pioneers to work harder than ever
- More CSOs please!
- Rethink sustainability storytelling
1. Make ‘sustainable’ a certified-only claim
Last year saw some ludicrous greenwashing: plastic packaging disguised as eco-friendly paper, sportswear made from dubious recyclable materials, deep-sea mining that’s supposedly more environmentally sound than its land-based equivalent, and absurd ‘carbon neutral’ claims by oil and coal businesses. Across a wealth of industries, we can only label something if it is certified as such. That could be champagne, 18-carat gold, or even a green loan. Yet there are no laws governing where and how the word ‘sustainable’ should be used.
For carbon-intensive companies heavily reliant on offsets, these plans are flawed. There simply isn’t enough land on Earth to plant the number of trees needed to sequester energy-related CO2 emissions, which stood at 31.5 gigatonnes in 2021 and require 63 million square kilometres of forest — more than 40% of the planet’s land area. The world needs new legislation, which stipulates that only companies and products that are certified as being sustainable by globally recognised certification bodies can indeed call themselves and their offerings as such.
2. Reconsider ‘climate positive’ claims and use of other ambiguous buzz-phrases
Worryingly, the past year has seen the conversation move from achieving net zero to being climate positive. That is, companies claiming to sequester more carbon than they emit through offsets. As The Guardian notes, proving a company’s carbon neutrality through offsets is highly challenging due to a lack of accuracy when measuring sequestration, as is verifying outlandish claims of being ‘climate positive’. Remember: there simply isn’t enough land on earth to achieve this.
Others are even claiming to reverse climate change, when scientifically, according to the National Oceanic and Atmospheric Administration, this too is not only immensely difficult to achieve, it will also take centuries to do if indeed at all, as NASA asserts. CO2 is extremely difficult to remove from the atmosphere, taking up to 200 years to remove — businesses that aspire to reverse climate change should therefore caveat that such action is a centuries-long process, which based on current emissions remains highly unlikely.
3. Don’t ignore water
Much of the attention on climate change focuses on global warming and the impact that a 2°C rise in temperatures will have on weather systems and sea levels. While these are unquestionably pressing issues, from a sustainability perspective today’s water crisis is of equal importance.
Almost half the global population are already living in potential water scarce areas for at least one month of the year, while almost six billion people could experience water scarcity in 2050. About three-quarters of those affected will reside in Asia. Businesses can play a major role in mitigating the issue. In the US, for instance, fixing leaks, retrofitting older toilets, and other water-saving measures at home and in the office will save the nation almost two trillion litres of water annually. Given that the US accounts for 4.25% of the global population, should these practices be rolled out, potentially 47 trillion litres of water could be saved a year.
4. Focus on food and waste as well
Increasing frequency of droughts, and more volatile weather patterns, are also impacting food security. Currently, more than 660 million people are undernourished, with almost 700 million people classed as being severely food insecure. Unless addressed, the crisis will exacerbate: the world must feed two billion more people by 2050, where demand for food will be 56% greater than it was in 2010.
Waste too is a pressing concern: only 20% of waste is recycled, with the remaining 80% causing 11% of global emissions. While the efforts of many governments around the world to tackle these two crises has been noteworthy, without action from the private sector to curb these, they are likely to severely worsen.
5. Re-evaluate ESG
The onset of the COVID-19 pandemic prompted a rush to ESG scorecards as a means of assessing a firm’s sustainability credentials. Yet the past six months have also witnessed swathes of high profile industry leaders bemoaning these efforts. They claim ESG scorecards are ineffective at instilling impactful change across a business — as they are too often riddled with inconsistencies, and fail to correlate to the unique attributes of the specific industry. Blackrock’s former sustainable investing chief recently labelled ESG a “dangerous placebo”.
A recent study by the Diligent Institute and Corporate Board Member unearthed widespread director disillusionment with ESG. Only 6% said that ESG goals and reporting was a top strategy influencer; while 7% said the same about climate risks. The study attributes these low numbers to the overcomplicated nature of corporate ESG programmes, and a lack of purpose by boards. Companies must therefore go back to basics, re-evaluating what they are aspiring to achieve, and setting goals and objectives that are clear, ambitious and transparent.
6. Consultants must simplify the process
While there is no shortage of consultants ready to service businesses both large and small, equally the market is drowning in information and advice — much of which is at best subjective.
If you were to speak to 10 in-house chief sustainability officers (CSOs), at least half would bemoan their dealings with such professionals. All five would probably cite complexity and opaqueness as a primary reason for their angst. Both of these traits are avoidable.
7. Avoid Scope 3 noise
Keeping track of Scope 3 emissions is the latest craze. Statistically it should be: up to 97% of company emissions fall under Scope 3, the activities of buyers and suppliers. While many companies are investing heavily in improving the carbon footprint of their supply chains, the vast majority of organisations are yet to track the emissions they directly emit — Scope 1 emissions — and those from the generation of purchased electricity, steam, heat and cooling — Scope 2 emissions.
Many argue that data coverage is too poor to support a meaningful assessment of Scope 3 emissions, and that given how data quality is improving overall, it makes sense to tackle these in a year or two from now. Others assert that the use of foundation technologies like AI, big data, cloud and IoT can help overcome this information shortfall, with an increasing number of tech vendors successfully demonstrating this. For those that are new to emissions auditing, the best advice is to focus on Scope 1 and Scope 2, and avoid today’s Scope 3 noise. On the other hand, for those that are actually ready, Scope 3 presents a golden opportunity to make colossal change.
8. Deploy easy-to-use technology
The aforementioned technology is readily available and affordable. ‘ClimateTech’ R&D is also not short of cash: according to PwC, between July 2020 and June 2021, the sector received investments worth almost US$88 billion globally, a 210% rise year-on-year.
With more than 3,000 companies dedicated to creating digital climate solutions, competition should push costs downwards, as user experiences become more intuitive. By investing in these technologies, companies have the opportunity to gain genuine insight over their emissions, while ensuring that they are seamlessly embedded into their evolving technology systems.
9. Get net zero certified
While many companies have, especially publicly listed entities – most haven’t. According to Statista, 37% of companies with more than 100 workers have some form of sustainability certification, while only 5% of firms with less than five workers have such accreditation. Getting certified has never been easier, and there are many pull factors encouraging businesses of all sizes to audit, monitor and improve their sustainability credentials. One is the accessibility of technology (as addressed above). Another is pressure from customers who are increasingly seeking low carbon providers, and a certificate that says so.
Getting certified by a credible body is also inexpensive. Ecovadis, the world’s most trusted business sustainability ratings, provides businesses with tools to self-audit and certify their sustainability credentials for as low as US$465, depending on their location and company size. Plus, certification is also seen as a key point of differentiation.
10. SMEs: Get serious
While there is a powerful business case for SMEs to undertake some form of corporate sustainability programme, few actually do so. Like their MNC peers, many don’t know where to start.
Help is at hand, however. An emerging theme over the past few years is increased collaboration between different industry actors — and there is surely no better time to seek out partnerships than in the Year of the Water Tiger, when harmony should be in abundance. Just enter “Sustainability for SMEs” into Google.com, and almost 400 million search results appear.
11. Industry pioneers to work harder than ever
Not so long ago, brands that were synonymous with sustainability could easily differentiate themselves from the pack. And for good reason: a 2020 Capgemini report noted how almost 80% of consumers chose sustainable products over non-sustainable rivals. This number is probably higher in 2022.
Seemingly everyone now claims to be ‘sustainable’. Whether everyone is indeed sustainable is an argument for another day (in our experience, this is far from the case). However, businesses that once used their environmental, social and governance credentials to attract and retain customers must work harder to further raise standards. And not just for their sake, but also to ensure that the bar continues to rise industry-wide. Otherwise, standards will be in danger of falling — which few genuinely want.
12. More CSOs please!
Also key to keeping these standards high are CSOs — the people responsible for ensuring companies adhere to high levels of environmental stewardship, social welfare and good governance. Until recently, CSOs were almost exclusively found in MNCs or NGOs.
This is quickly changing. Smaller companies rising to the challenge, mostly prompted by Scope 3 pledges by MNCs who expect to exclude 35% of their current suppliers as they attempt to move away from carbon emitting businesses. In our own instance, CP5 plans to become certified as carbon neutral by 2023.
13. Rethink sustainability storytelling
Much of the content in the sustainability space is tokenistic, and lacks empirical fact-based proof to support corporate claims. That said, there is an abundance of companies that are approaching sustainability genuinely and thoughtfully. Typically these aren’t the brands with multimillion-dollar press and marketing budgets, but they can lead the charge by being more vocal about their achievements. A genuine sustainability story outlines a journey, featuring the challenges faced early on, and how individuals and companies alike can overcome the odds to achieve their sustainability goals.
At CP5, we’re working with brands large and small from all corners of the world to help them articulate this journey. Whether you work in finance, renewable energy, healthcare, fashion or even the music industry, we’ve helped businesses like yours to tell their inspiring story. In this Year of the Water Tiger, there has never been a better time to be bold and purposeful in your storytelling, while collaborating with us to ensure this resonates with your readers.
