Strategy•Feb 08, 2023
Making Sense of Sustainability Part One: Global Commitments, Client Challenges, and Credera’s Commitment
Sustainability is a global challenge, and not one that can be solved overnight. The UN’s ‘Decade of Action’ rises to that challenge, showcasing the scale and scope of the problem while bringing sustainability to the heart of the plan to save our planet. But while action has begun, it is not nearly fast enough.
This blog will cover what is meant by the global challenge, the types of challenges we see our clients facing, and what we at Credera are doing to play our part.
Global challenge: Sticking to our collective goal of 1.5 degrees Celsius will require social and economic transformational change, and we all need to do our bit. The alternative is not an option, and we cannot afford to wait to be led by others.
Key client challenges: We see three key challenges our clients will face in getting to net zero: adopting a ‘carbon conscious’ operating model, harnessing green technology, and putting people and processes at the heart of sustainability.
Credera’s commitment to sustainability: We’re on the journey to improve our own sustainability and our CredClimate employee resource group (ERG) is focused on setting Credera on a path to a cleaner, greener future.
The Global Challenge
According to the IPCC, 30 million people fled their homes in 2020 due to storms, floods, wildfires, and droughts, and nearly half of humanity is living in the danger zone. All of this is happening at 1.2 degrees Celsius of warming, which is where we are today. Antonio Guterrez, Secretary General of the UN, recently stated that our global target to keep warming below 1.5 degrees Celsius “is on life support,” and even 2 degrees Celsius may be out of reach. NASA has modelled this scenario and it does not make for pleasant reading. We need to make drastic changes, and we need to start now.
There was optimism emerging from COP26 in November 2021, where real progress was made on commitments to end deforestation, reduce carbon emissions, and align financial markets more closely to climate goals. However, emissions are still rising across the globe, and we aren’t doing enough to reach our stated goals. Developed and developing nations, governments, and businesses must work together to transition away from fossil fuels, restructure the global economy and financial systems, and protect the most vulnerable in our societies.
It won’t be easy – McKinsey estimate it will cost $275 trillion by 2050 to get there – but system change delivered in a well-coordinated and fair way will present many opportunities to upgrade from today. According to the International Labour Organisation, a shift to a green economy could produce 24 million jobs by 2030 if the right policies are put in place. We are already seeing huge advances in sectors such as renewable energy, green hydrogen, and battery technology for electric vehicles. Business and technology will play a crucial role in the journey to net zero, and those that act now will be best prepared for the transition.
Key Client Challenges
So, the question is – how can businesses can play their part in protecting our planet? We’ve taken our industry insights and summarized the top three trends and challenges: adopting a ‘carbon conscious’ operating model, harnessing green technology, and putting people and processes at the heart of sustainability.
1. Getting to net zero with a ‘carbon conscious’ operating model
Across corporate and annual reports, it’s extremely rare to not see a commitment to net zero. Businesses across all industries are focusing on switching to renewable energy sources and the gradual phasing out of fossil fuels. However, focusing on switching energy sources alone simply isn’t enough, and McKinsey highlights the importance of net zero being an ‘organizing principle’ for business.
Businesses need to create a ‘carbon conscious’ operating model to be organized around sustainability. A ‘carbon conscious operating model’ consists of a clear strategy, supply chains linked to business objectives, sustainable procurement practices, responsible suppliers, streamlined processes, data and analytics to drive real-time tracking, clear governance, and KPIs.
Unilever exemplifies adopting net zero as an ‘organizing principle’ by designing their ‘Climate Transition Action plan’ around their operations, value chain, brands, and governance. The key takeaway is that if businesses focus purely on reaching a net zero target without the operating model to underpin it, it will simply only remain as a target.
2. Harnessing green technology
According to The Economist, “Technology is not itself a big part of the problem... but it can be a big part of the solution.” The UK government also stress the importance of businesses developing green technologies to reach net zero. This will require significant innovation and investment in technology and we are seeing this now with examples such as Shell investing in green hydrogen generation and industry leaders in the Yorkshire and Humber region partnering on large-scale Carbon Capture and Storage. However, like the need for a sustainable operating model, innovation is not just an activity and requires an organizational culture of innovative mindsets and behaviors to introduce new technologies over a sustained period of time.
Green technology will also be crucial in reaching a green digital estate. As the world’s leading cloud providers move to renewable energy, such as AWS moving to ‘100% renewable energy by 2050’ and Google striving for ‘100% renewable energy by 2030,’ businesses can capitalize on green cloud providers to adopt cloud infrastructure to minimize environmental impact. Moreover, businesses can use data and analytics in harmony with cloud technology to assess the carbon footprint of current on-premise vs cloud technology and measure efficiencies against governed carbon tracking frameworks and defined KPIs.
3. Putting people and processes at the heart of sustainability
There’s an ever-increasing range of sustainability legislation for businesses, with legislation varying by industry. However, as Forbes highlights, businesses shouldn’t just focus on legislation - the ultimate destination for businesses on the journey to sustainability is to ‘embed sustainability in all company operations and decision-making, not just to meet compliance and regulations, but to keep up with the competition.’
A challenge clients will face is having the capabilities to design efficient processes and eliminate waste in business operations that will make a significant difference. In addition, the transformation required to embed sustainability can’t be underestimated. It requires strong leadership, roles and responsibilities linked to sustainability outcomes, effective training, and governance frameworks. Putting people at the heart of this transformation is crucial to make sustainability meaningful and empower employees to protect people, profit, and planet.
Credera’s Commitment to Sustainability: CredClimate
Credera is committed to sustainability and is rebranding and consolidating the US Sustainability Committee and the UK Environmental Working Group under one banner: CredClimate. Through greater collaboration both internally and alongside Omnicom, Credera’s parent company, we aim to set Credera on a path to a cleaner, greener future. With more accurate emissions reporting allowing us to establish our short- and long-term goals, regular participation in working groups, internal training, and a greater understanding of our impact at both the local and global level, we can set out a definitive roadmap to make sustainability a core part of Credera’s DNA.
The key trends and challenges facing businesses across the world are only going to amplify. We believe there has never been a more crucial time for business owners to create sustainable businesses to protect our future.