Is net zero enough?
Businesses are being challenged to think beyond just carbon and net zero plans when it comes to climate change.
The risks associated with climate change are beginning to have a significant impact on all businesses.
Typically, businesses are seeking to address those risks by developing a net zero plan. That approach is too narrow and means businesses fail to consider many of the risks that they are exposed to. For example:
- Impact of the changing legal and regulatory landscape in response to climate change on my business directly/indirectly.
- Stakeholder expectations — your people, clients/customers, funders, regulators, and suppliers will all have expectations of you — how do you plan to meet those expectations?
- Project and development risk — considerations in relation to issues such as air quality, water resources and natural capital are key in relation to new schemes often adding significant cost and frequently preventing schemes from proceeding.
- Supply chain resilience — how well do you know your supply chain? How resilient is it to the changing climate?
When businesses think about climate change, they need to think more widely than just carbon and a net zero plan, they need to think in terms of sustainability and Environmental Social Governance (ESG).
Weightmans is working with clients to help them understand what sustainability actually means to them so they can create and implement appropriate strategies. A very easy way to start this process is to utilise a framework such as the UN Sustainable Development Goals (SDGs). Complete a materiality assessment to understand which SDGs are key to your stakeholders and then use that information to identify the key risks and issues for your business. Identify what your baseline is in each of the identified areas and what your action plan is for improvement. Then collect data so you can map your performance and share that data with your stakeholders.
Weightmans has also been working with clients to support them in understanding and addressing specific issues and risks, for example:
- Corporate sustainability due diligence — what does the EU Directive require? What does a good governance framework look like? What questions do you need to ask of your supply chain? How far down the supply chain should you go? How do you respond to questions being asked of you?
- Greenwashing — what does the ASA Green Claims Code recommend? What can you learn from the reported instances of adverts being criticised? What do you do if a competitor is making what you consider to be false claims? How can you ensure your marketing team is not ‘greenwashing’?
The world of corporate sustainability is constantly evolving. You need to engage with the sustainability and net zero agenda now so you can begin to manage the associated risks and benefit from the opportunities that the changing landscape will bring.
For information and advice on what we can do to help your business implement strategies and understand the risks and issues in addressing climate change, then contact our team of expert ESG solicitors.