The human side of net-zero

“Humanity has long since run down the clock on climate change. It’s one minute to midnight on that Doomsday clock and we need to act now.”

The Prime Minister’s sentiment was echoed across the Globe by Leaders at this week’s COP26 climate change summit. It’s no longer a race to get to net zero, or a nice thing for companies to add to their manifesto — the time for action is now.

Every company and every business model will need to change. It’s important to investors, consumers and to the workforce. Here are a few fast stats:

• Investment that ‘takes into account environmental, social and Governance (ESG) issues has increased to almost $23 trillion
• 73% of workers want their employer to improve the sustainability policy
• A UK Government survey found that 62% of respondents were more likely to purchase a product or service if they believe it to be sustainable

As business models are being disrupted, leaders are expected to show three things: a strategy, a plan to execute that strategy, and evidence that the plan is underway.

Influence: Sparking movements for change in every business

With policy statements tackling decarbonisation of the energy sector yet to be formalised, the accountability for the shrinking global carbon budget lies on the shoulders of leaders and change-agents on the industry level. Through their influence, leading business figures are using their existing platforms to amplify that call to action. The growing momentum is evident: last year, the rate of adoption of science-based climate commitments doubled compared to the timeframe between 2015 and 2019. But the power of influence extends beyond the CSR considerations, now primarily viewed as a hygiene factor.

For many, it serves as a springboard to redefine and re-examine entire supply chains, ways of working, and stakeholder value. Put differently, it serves as a catalyst for sparking change and not shying away from difficult questions. Some businesses are already walking the walk; Google and Facebook, the fourth and fifth biggest companies in the world, say they’ve reached net zero already. Many companies say they will reach net zero sooner than by 2040, 2030 or even earlier. It’s time to shine the light on those businesses creating ripples in their networks and industries, and those that are not.

Impact: Accountability and action

In 2020, 83% of UK office workers reported that their workplace was not doing enough to address climate change. The workforce is no longer passive in their desire for change, and no longer will sustainability reports with empty promises that aren’t integrated into tangible practices be tolerated. With COP26 there is a visible push from world leaders to lower emissions and tackle climate change, but just as potent is the power and enthusiasm from employees to commit to action, and an expectation that this should be reciprocated by the companies they work for.

Therefore, employers are on the cusp of being held accountable from multiple sources, and the pressure is on to evolve now to ensure that their impact is in line with shifting dynamics. Magnetic works with organisations that have set ambitious targets, including Highways England, L&G and Mars. For them and others like them, the race to net zero forces them to innovate, get closer to customers, collaborate and embrace change. This goes beyond just net-zero targets and activities; the moment calls for pioneering leadership and strategic foresight to embrace the challenges ahead, and vanguard a radical future.

The learning curve will be steep, but the opportunity is no longer a choice. How can businesses and leaders have real impact, and what will that look like?

Richard Poole is CFO and Chairman at Magnetic. We help some of the world’s best-known companies solve and tackle some of the biggest issues. For more info on the work we’re doing get in touch at Richard.Poole@wearemagnetic.com.