On March 2nd we partnered with The WWF to take a fresh look at how business can best tackle climate change. By shining a spotlight on a promising new breed of climate coalitions, we explored how sustainability experts in large organisations can harness the power of the business community to tackle what many regard as the biggest challenge facing society.
Groups that have worked across business on climate change have existed for a while, and many have played a very important role. The difference with the new generation is they unite the existing groups, ask organisations to sign up to stretching carbon targets, share knowledge between their members and embrace digital mediums. They are also attracting strong management teams.
The new coalitions include We Mean Business, The RE100, Aiming For A and Collectively. This event was a chance to learn and consider how your organisation can play a role in supporting what may be the beginnings of a powerful movement.
Moderated by Axel Threlfall, our panel included many of the key people behind these movements;
This table will digest the panel conversation, and consider whether coalitions such as We Mean Business represent a new era for corporate collaboration on climate change. Which of the coalitions is best positioned to create change, and should businesses be doing more to support these initiatives? How should these coalitions be used in corporate climate change strategies?
So what exactly is the way forward? Is it:
1. One big commitment for each of these coalitions to focus on rather than lots of different focus areas
2. Promoted via social media
3. Promoting positive stories rather than doom and gloom?
Specific focus for coalitions is key
The way coalitions can effectively work together is to have a clear focus and identify how can partner together to help all achieve their respective goals. No need to start new coalitions but a mechanism is needed to align existing collaborations in order to scale to avoid fatigue due to limited action being achieved.
Understanding vs. standards
Current focus of coalitions very much on standards. Instead it should focus on ho the value chain works and the potential blockages in the system. There is not just one nut – the entire value chain needs to be diagnosed to shift direction and scale. Big business to share data, skillsets, learning, have project managers involved on the ground
Agree to be different and move on
Coalitions to find mutual burning issues and speak with one voice rather than compete against one another to get the attention of government. Broad agreement on principles – and then take necessary actions to overcome counterpoints and challenges
Demand led drive is lacking
Business too focused on benchmarking and technological innovations. Need to award consumers to get on board and act – an upside business benefit is key! If customers engaged, this will drive profits. This all comes back to capitalism at the end of the day.
Drive change from the bottom up
Will take generations before big business is able to do this on its own. Business needs to back away from the flashy, technological advancements and instead find a way to make the boring, yet vital components interesting through the education of consumers. It is not just big business that will drive the change, but all need to get involved – from small business right down to individuals – business, public and civil society need to contribute. Need a creative force to get consumers involved in the advocacy of boring stuff as flashy sustainability products will always be inferior compared to lower cost of unsustainable alternatives.
Put the incentive on the right person
To ensure commitment, similarly to emissions and car tax, should business be taxed differently based on green credentials. If not consistent on a country to country basis, government will not want to be involved because businesses will move elsewhere where this tax does not apply. Either way, government currently to scared to intervene with upcoming elections. Another focus area is on shareholders to put pressure on companies to act. Another option for government to focus on legislating where gap in consumer awareness – circular economy, renting and leasing vs purchase options – more pressure on consumers otherwise will always be voluntary
The Trade and Investment Partnership (TTIP) likely to cause havoc as could restrict localized programmes - a stand needed by business before legilslation goes through
• A bit unclear around not on TTIP in red above, Simon maybe you could provide some clarity
• Coalitions need to call on others that may go against them, own things in house and have the message trickle down to consumers
• Need to make issues around climate change seem legitimate to ordinary people, not just big business
• Realising the cost of not doing is what will ultimately drive the agenda forward
Obstacles to change through collaboration
• Often collaborative groups have 1 representative from each sector - competitors don't collaborate
• -> Risk of lots of new silos (collaboration platforms) being built when transparency is needed
• If businesses publicise good results they are criticized for what they haven't done
• This leads to the hush because only best case studies are published, which skews the curve
• It takes time to reach collaboratively-developed standards which can be a 'get off' smokescreen as not compulsory, and not boundary-pushing if consensus sinks to lowest common denominator
• Larger organisations have more resource to dedicate to collaborative efforts
• Some sectors previously doing well lost their way through time/events e.g. recession
• Analysis (e.g. IPCC working groups 2 and 3) is relatively poor; there is a fixation on physical measures and technology, and culture is not always included
• Many assume that change and collaboration take place primarily in the digital world which could lead to a backlash
How to make collaborations work and potential benefits
• Organisations need to agree a space to work in, with agreed agendas and minutes for all meetings. E.g. sustainable aviation worked together on better facilities, access and carbon taxes
• Competitors must avoid discussing topics such as price as competition laws prevent collusion
• Data sharing such as The Crowd’s The curve can provide a real initiative cost curve
• Collaboration is just the first stage in a journey; tools and data should lead to new engagements, and be applicable to several markets (avoid silos)
• Uncertain sustainability landscape is an opportunity (necessity!) to develop better language and dialogue around failure. Orgs e.g. Unilever and O2 with big goals - will be criticised if they don’t meet them though they will have achieved and learned a lot in the process, which they can share
Winners and losers
• Fast moving companies will win, but need to bring others with them – need genuine transparency
• Policy makers have to deal with losers - it is an issue for society. E.g. Africa will probably skip the grid but will need help to do it, and society will be left with the residual part e.g. fossil fuel orgs
• There are often many new initiations but need to address organisations’ and individuals’ fears
• A "new world" is scary - it’s all about change management - show them future they can grow into
• Currently insufficient consideration of how to compensate the losers
• Need to manage the desire to win - to be the first who can say they have done it
Geopolitics and boundaries
• Collaboration at sector level is important, but local level (e.g. considering ecosystem degradation) is much more important to users on the ground, if they perceive shared common resource, they are much more likely to advocate policy change.
• A vanguard of innovators can exist on a global scale, but regulation is on a local scale
• Ways to measure and verify impact of collaborations needed – regulation/compliance structure
• ESOS (like Collectively) do audits but nothing to push a decision; cf EPCs mandatory in 2018
Influence of investors and consumers
• Tonight’s panel said no change would take place without consumers asking for it, but at many organisations such as Unilever, M&S that's not how it happened - pressure came from the top
• Logically, investors should want stable long terms returns
• Constraints may be imagined. Investors can perhaps be more flexible than organisations think.
• Investors are increasingly aware CF 2 years ago - e.g. funds have dropped coal
• Reputational damage is a driver: e.g. financial sector trying to reposition themselves
• Investors have an appetite to understand risk, such as exposure to stranded assets and to 2/4/6 degrees of temperature change. They use scenario analyses and carbon analysis…
• ...But investors also have huge sunk costs
• Investors don’t all have incentives to consider climate change; it is one of many issues for them
• Investors need returns, it's not easy for policy makers to let e.g. Shell/BP go under, due to associated pensions, supply chains etc.
• It is not the first time we have restructured. Many structural changes have taken place in the past 500 years. Energy and climate community should position this as the next structural change, not an unprecedented change
What do the stakeholders need of these new coalitions? This table will focus on the perspective of the corporate supporter, and consider options such as the clarity of the mission, the measurability of member’s goals, ways that the members communicate and the language that they use. Which coalitions does the table think is getting it right?
• Aiming for A (investors driving performance in CDP results)
• WWF looking at ‘collective advocacy’
• The Big Collaboration
• BBC / BAfta / Sky etc. (carbon footprinting of TV programme production)
• BT/BBC etc. (TV broadcast chain)
• The People’s Pub Partnership (crowd funded, fossil fuel free etc. pubs)
• Tropical Forest Alliance
• UN Global Compact
Too many coalitions?
>380 ESG related coalitions by February 2013
Getting messy Can’t do it alone
Reinventing the wheel Can’t control their emergence
Duplication of effort Creates momentum
Can hinder progress e.g. proliferation of standards – organisations wait to decide which to support Over time expect some to fail and others to align (as seen with accountancy standards)
Competition for limited funding
• Allow to evolve naturally
• Communicate more about what is being done (can be difficult to foster communication across groups with different cultures, perspectives etc.)
• Form coalitions of coalitions!
What are the key ingredients of a coalition?
• A clear, narrow focus on what the coalition is hoping to achieve
• Neutral space to run it
• Removal of egos
• Learn from previous coalitions
• Measure success – helps maintain momentum
• Align goals to ensure mutual benefit for all in the coalition
• Clear sense of your unique role
• Keep looking for opportunities, learning and growing
• Difficult to build coalitions when you have disparate groups with different needs and opportunities
• Logistically – need to know different parts of the value chain?
• Are there areas where a coalition doesn’t work? e.g. Sustainable Development Goals - some scepticism that the private sector has a role in shaping the goals
This table will look at the climate positions of extractives and utilities through the lens of “Aiming for A”. This new investor coalition has £160bn under management and is exerting pressure through shareholder resolutions, Shell recently decided to support its call to explain how its business fits with a 2 degrees pathway. This table will be joined by Helen Wildsmith, a leading figure behind Aiming for A.
CDP and CCLA in a nutshell:
Coordinated by CCLA “Aiming for A” brings together a coalition of investors including mutual in the UK fund management industry and influential UK asset owners. They are asking ten major UK-listed utilities and extractives companies to aim for continuous inclusion in CDP’s Climate Performance Leadership Index (CPLI) by achieving and retaining an “A” Performance Band.
• Where does Aim for A sit within companies? Investors are looking at the numbers in CDP and it is having an influence on their decisions, this is moving it higher up company’s agendas. Peer pressure and stakeholder pressure are key components in switching to cleaner business. Pressure for companies to perform well in the CDP can sometimes come from the most senior level, particularly if peers are performing better. However, managing carbon risk is still at a lower priority than other risks.
• Problems with investor communication – Investors are not communicating information to companies on how they are choosing investments based on CDP. Investor engagement is key for raising awareness around CDP. From looking at the CDP investors can get a very good idea of how companies are doing, but companies want to know exactly what investors are looking for and how they are informing their capital decisions.
• Solutions to Investor Communication – CDP has put money into working over the data internally.
• CDP benchmarking – companies are being turned off by broad benchmarking against companies not within the same sectors.
• Benefits of CDP – a lot of sustainable planning draws on CDP. Typically you find a lot of information in the CDP that can be useful to sustainable strategy and ensuring that conversations and strategies are more refined. CDP is part of a wider conversation with investors.
The RE100 was launched by The Climate Group, and aims to get 100 companies to commit to using 100% renewable energy. 15 companies have signed up since it was launched in October 2014, including BT Group, H&M, IKEA Group Mars, Philips, Swiss Re and Nestlé. This table will look at what this commitment entails, and the potential for this coalition to create change.
This table, chaired by Jim Woods, examined the RE 100 initiative, launched by the Climate Group with aim to get 100 companies to 100 renewable energy over a five year period. Emily Farnworth from The Climate Group, first provided a brief overview of the initiative.
Main Goals of RE100:
To mobilize the commercial sector and corporate purchasing power to shift towards decarbonizing, which is about changing attitudes and narratives about what is possible within a simple message. This is about communicating progress and investment and rates of return and highlighting benefits businesses receive from this. This is partly about understanding that certain technologies are better than others and more suited to different companies. Finally, the commitment is a global one that understands that businesses often operate in challenging locations. The majority of the questions centered on the below themes:
Types of Renewable Energy Permitted
Climate Group has not preference on type of renewable used, although nuclear is not considered within this. Businesses can use renewables such as PV or wind, but can also use renewable energy credits (RECS) and participate in power purchasing agreements. These options are conducive to businesses and it doesn’t always come down to the most initially affordable option, but what fits best for what type of business.
For example, biomass may suit the nature of certain waste streams over others. A question was posed on whether supply chain renewable energy use would count and renewable energy must be used only with owned operations. There has been little government feedback on the initiative, although this will change as more businesses sign.
Implementation and Reporting
Numerous questions were raised regarding creditability of renewable energy credits as well as reporting logistics. The issue of additionality was also raised and the Climate Group agreed it was challenging to ensure that the credibility of the campaign is based on actual renewables and not double counting. Two businesses expressed concerns about credibility of RECS as well as other renewable energy strategies and structural challenges with going entirely renewable. The diverse options that are available for firms to choose different renewable energy sources, including PPA and RECS, were emphasized, especially for big businesses that can navigate that process. Climate Group will help business to navigate the credit process and the strategy used is entirely dependent on the nature of the sector. Energy efficiency does not fall into RE100 however they have noticed participating firms becoming more energy efficient due to learning and increased visibility of the issue.
Concerns about the Business Case
Many businesses expressed concerns about the business case for renewables, especially regarding such a high target. This emerged as the largest point of discussion within the table, as feasibility and financial incentives were debated. One participant agreed that his business would be willing to commit to an RE30 but not RE100 due to questions of the financial impact. This concern was mirrored by other participants. The question of how to shift this to the public sector was also included with questions directed at Transport for London representative on the feasibility of this. Climate emphasized the importance of simply setting a target in itself even with questions on how businesses would achieve it, as this will lead to creative innovation in the sector.
Summary: Making the business case for RE100, as well as defining what types of renewable energies work best for what sectors, were the main points of the discussion. There was a feeling that RE100 will continue to grow, albeit slowly, as more businesses become involved and in the lead-up to Paris 2015. However, businesses expressed concern about financial impact as well as how to navigate the renewable energy process, especially regarding credits and PPA.
Collectively is a new digital media channel built to inspire and empower people to make sustainable living the new normal, funded by a coalition of companies including Unilever, BT, Marks & Spencer, Coca-Cola, Carlsberg, Google and Nike. This table will explore the business model with its CEO, Will Gardner, and explore how Collectively can tackle climate change and other issues.
• Collectively’s goal is to inspire and enable new ways of sustainable living and cultural norms as seen through the lens of the millennial generation. System change is needed to create a sustainable planet and
Collectively makes up part of this change. It seeks to answer two key questions:
o What does the world need to become sustainable?
o What do millennials want (e.g. needs, wants, challenges, etc…)? For example, generation Y often cannot afford a new home and end up living with parents or moving frequently. How can we address the impacts of these modern lifestyles in a way that is practical and engages millennials?
• This coalition has a number of different stakeholders: brands, partner organisations, aspirational millennials, etc…
• With regards to the millennials, the website targets those that have not really made many changes to their lifestyle, though at the same time they care about the planet. First and foremost, Collectively’s mission is to bring this group to the table on their terms and provide them with the power to shape the direction of the future. By being part of the conversation they are more likely to implement the solution.
• Although Collectively is 100% funded by brand partners, the amounts of money requested are quite small. The way in which it seeks to offer a ROI at present is as follows:
o Proving the impact of this marketplace. Those companies invested in the platform are learning more than other brands and therefore have a competitive advantage.
o Provides greater insight into benchmarking, audiences involved, topics of interest and feedback through site voting and in future crowdfunding interest.
o Whilst brands advertise on the platform and consequently receive a degree of acknowledgement, brand equity ROI is not part of the deal, as this could conflict with the mission of the platform.
• Collectively believes foundations will likely join on the basis of their interest in the themes covered by the site (e.g. sustainable cities).
• Further, foundations also find that by having corporations at the table there is a greater likelihood of success with addressing issues.
• Moreover, Collectively must grow from the ground up and be an independent platform in order to be a social movement. Building trust will be a journey, for both millennials and corporates alike.
Crowd Reflections on Collectively
• Provide a blog or news website to drive traffic and a rewards site to encourage innovation.
• Differentiate from other platforms, such as Co-Exist, Mind Body Green, One Green Planet, etc… by supporting the implementation and dissemination of the change it discusses.
• Share approach and knowledge in the public sphere so that other collectives and organisations can benefit from the platform’s experience.
• Make the purpose and navigation of the site crystal clear, especially for older generations to makes sense of its proposition.
• Make lifestyle changes practical and easy to incorporate. The content should be based not on the 10 gold standard individuals/case studies, but the 100 silver standard practices.
• Be mindful of the attention spans often associated with social media platforms and millennials. Also, identify how to capture their attention.
• Challenges faced by the private sector are actually similar to the social sector. There are a few key terms to bear in mind:
o Evidence – how to evidence content and insight
o Aggregation – how info on site is aggregated and how people can navigate
o Narrative – how to build a balanced narrative (e.g. shouldn’t be all positive)
o Alignment of interest – how do you align interests with the different actors involved
o Find your interstellar moment (e.g. the film) – how to get people to enact change
• Be honest about the brands behind the platform. Magnify the impacts of those doing positive and prove this with stories.
• Engage with millennials by making technical content fun and relevant to their lives (e.g. carbon emissions vs calories in a chocolate bar).
Collectively Questions and Answers
• How can Collectively better reach audiences than the brands that sponsor the platform? Will the platform behave like a conventional media channel?
o Platform content will be pushed out for the most part.
o Collectively can address issues relevant to audiences that might run in contrast to current business models of brands. Though the discussions will be held irrespective of this, as the content should become entirely independent of sponsors.
o Further, the platform’s audience does not restrict the content published. For example, Unilever’s project sunlight is a single company brand initiative, which by nature will restrain the types of communications it does.
o Having many corporate partners also helps spread the reach of a single platform.
• With regards to climate change, the greatest gift you can give millennials is a voice and power to influence future decisions. Is your website really doing this? Writings are curated and created by non-millennials. YouTube is a prime example of giving the power to the people. Could you better leverage millennial resources and networks to progress this to a self-organising platform?
o Collectively needs to give shape as it is at the beginning of its journey. Curation brings together people who have demands (e.g. the public) and people who can answer demands (e.g. companies). It’s important to provide a voice and the ability to address issues with the right stakeholders, as this is currently lacking.
o Although once traction and participation has reached a significant point, the plan is to loosen the company’s involvement and make it a more open-source platform.
• There are many different views on what planet needs. Outside what partner CEOs think, how do you identify the right priorities?
o Collectively is a solution-orientated platform (e.g. how to decarbonise). From an editorial point of view, its goal is not to take a political stance or nail colours to a mask.
• What is the growth strategy? To grow the tool, the network of contributing organisations or the impact that can be directly attributed to Collectively? Also, is there an exit strategy?
o At the end of the day, the only aspect that really matters is the impact Collectively can make. Everything else is a means to an end. As this is a learning process, the growth strategy will be dependent on what best supports achieving this goal, whether that means growing the partner base or prioritising the community and the tool.
o There is no exit strategy at this point.
It’s hard getting most company boards to take climate change seriously, mainly because the risks are too long-term. This roundtable will role play to examine the arguments for and against. Chosen by lots, half the table will represent the board of a conservative manufacturing company. The rest will be the experts advising action. Advisers will pitch the board and board members will respond. Bring a crash helmet!
Key things to focus on and items to consider when meeting the board members:
• Importance of understanding the motivations of the board;
• Try to align sustainability with business objectives;
• Explain the risks if the company does not react (e.g. using risk matrix to identify material issues);
What level of detail does the board need and how should we present information to its members?
• Use of scenario planning vs. indicative time frame for each scenario;
• Introduce the board to a similar company that has implemented a successful sustainability strategy. E.g. Hilti brand;
• Analyze the long-term demand drivers of the company;
• Use of pilot programs to get the ball rolling, including using testimonials;
• Use of quotes from the CEO of peer companies explaining their sustainability strategy;
• Explain the benefits/ savings vs. investment of implementing a sustainability strategy;
• Provide insight to the legislation that applies to the company;
• Use customer quotes;
• Provide a visual example on the consequences of not acting;
• Make it a personal message e.g. this is the impact on a local family/community
What should be the sources for the key facts?
• Sources are numerous e.g. Green Building Council;
• Compliance, particularly in cases where impacts are regulated;
• Sector specific trade bodies.
Opinion polls show that the overwhelming majority of citizens believe in climate change, but a small minority factors it into purchasing decisions. This table will look at the ways business can engage consumers and consider the risks of doing so. How much of a company’s energies should go into engaging consumers versus the other options they have to tackle climate change?
“Climate Change & Consumers”
Opinion polls show that the overwhelming majority of citizens believe in climate change, but a small minority factors it into purchasing decisions, how much have you found consumers are interested in this agenda? Is there change?
• Suggestion of generation difference in what they say and believe and what their actions show
• Many people do it to tick boxes, there are too many options for them, buy “eco labels” for the sake of buying
• In specific sectors like the food industry people seem to care i.e. cage free eggs, organic veg, whereas people don’t seem to have such a high regard for other sectors like the clothes sector
• It is also culture and age related, older people are harder to convince.
• Community and how your community behaves also effects your buying decisions
• Need to move from interest to behaviour, buying not because its green, but because it’s a good product
Does Business have an obligation to focus on the consumer or should they be focusing their attention elsewhere?
• Businesses should internalize their behaviour first and make sure everything they are doing is sustainable before they even go out to the consumers.
Is it an opportunity or obligation of business?
• It is important that the product is as good or better than what is currently out there
What is a tipping point of brand to an entire sector?
• Good design is crucial
o Ex: Dyson air blade
• Does its “sexy” design affect sales?
o Yes, because it looks good!
o BMW for example, it is environmentally friendly which is a great bonus, but people want it because it’s got a beautiful design and brand recognition
Can you change consumer agenda? How can business do this?
• Educate the consumer, it will help long-term but not immediately
• All about design, strong element of innovation. Needs to be a full package
• Consumers want to feel good about the products they are using
o EX: bottle of water: Want to know its healthy, its providing jobs, helping water treatment facilities in impoverished areas
• Not about consuming, about creating, creating a better version of yourself
How can business push the agenda?
• Recognize that people don’t trust business and figure out what they trust
o Having it come from the community often garners more trust than it coming from a large corporate
• Disagree, most NGOs don’t have the scale of community outreach for large corporates
• Internal change management, because employees are also consumers
• Hook education into it
o Kids talk to their parents and also teach them as a young generation
o Get schools involved, kids often have the loudest voices for change
• Trust issue, what is the brand motive
The 2015 climate negotiations are seen by many as the best chance yet of reaching a global climate agreement, and the UNFCCC is calling on business to lend its support. This table will consider how business can best do this, from joining calls for a global price on carbon to attending the talks themselves.
HOW DO WE GET INVOLVED?
The debate kicked off with the roundtable attendees explaining why they had chosen to join this discussion in particular. There was a recognition that businesses needed to be involved in international climate negotiations, particularly since there is such a great need for regulatory certainty for businesses and investors to make long term decisions.
There was also the feeling that despite a lot of ‘talk’ about getting businesses involved in international climate negotiations (by the various climate coalitions and by the UNFCCC itself), there was a distinct lack of clarity on practical ways for businesses to attend the negotiations in Paris or influence policy at such a high level.
Moreover, one of the attendees reported that the invites for CEOs to join the climate negotiations in Lima in December 2014, were not received in sufficient time for businesses to organise their attendance.
Ultimately, there was no contention on the table around the idea businesses should be involved in international climate negations and climate coalitions, but more uncertainty around how to get involved and how to engage businesses that aren’t already engaged in climate change, including SMEs.
An attendee also pointed to the shift in political thinking around climate change and achieving an ‘ecological civilization’ in China, but noted that Chinese businesses are not engaged with climate change in the same way since the business case for them is unclear; the traditional western levers do not work.
It was agreed at the roundtable discussion that Cian Duggan, founder of Carbon Credentials, and the roundtable host, would provide a number of resources and tips for businesses to get involved.
WHAT ARE THE VARIOUS COALITIONS AND HOW VALUABLE ARE THEY?
There are a number of New Climate Coalitions’ which were discussed throughout the evening. These include:
We debated the efficacy of these coalitions, and whether they simply represent large groups making ambitious statements rather than clear commitments. However, one of the roundtable attendees had attended the New York UN Climate Summit in September 2014 and explained that there was the feeling that the We Mean Business coalition (which was launched in New York) was making firmer statements and there was a sense of action and excitement.
WHAT IS THE ROLE OF CARBON PRICING?
Two companies represented at the roundtable, had internal carbon prices which sparked a debate around the role of internal carbon pricing and the likelihood of a global carbon price (which it was agreed there was none!).
For one of the companies represented at the roundtable, it applies a standard carbon cost of $40 to the projected GHG emissions over the life of the project. The company uses this cost as a basis for assessing the economic value of the investment and as one consideration in optimizing the way the project is engineered with respect to emissions.
Another company represented at the table also recently set a carbon price following the climate summit in New York in November 2014 as part of the company’s current climate campaign on the lead up to Paris 2015.
The other representatives of businesses at the table discussed the benefits of carbon pricing for their businesses, for example, for two of the companies at the table in particular (a construction company and a lighting company) and it would be helpful in driving through better technologies as it would make a big difference to project paybacks.
Ultimately, it was agreed that carbon pricing would be valuable for many of these businesses and there was a desire to understand how it would work for each of the respective businesses, but it was noted that for many companies the burden still lies in measuring and counting carbon and therefore carbon pricing is less of a business critical decision at present.
Most experts agree that the availability of high quality data improves their carbon and energy strategies. This table will look at how companies can use data as an accelerator, such as the best data for forecasting prices, tracking the performance of existing investments and understanding how returns are changing for different technologies. Which data is the most critical to success?
“What data is the right data to use?” “How do you set the right context?” “Which content is relevant to help make the business case for investment into low carbon and ‘greener’ solutions?”
Engagement – what is the driver in collecting and using certain amounts of data? It is important to not get lost into the streams of data that may or not be relevant for a particular company, organisation or user. The key is to collect and analyse the appropriate data that will enhance engagement and actual spark action and implementation. Context is key for engagement.
Responsible investment is struggling to collect, analyse and condense to track the performance of existing investments and forth make future investments from not fully being able to qualitatively understand and present how returns are changing for different technologies and measures. Therefore, materiality of data is crucial in order to produce worthwhile and significant analysis so that decisions for responsible investment can start help to reduce the amounts of often much skewed data. As this makes it hard to draw comparisons between company and company and such variation amongst sector-to-sector, in order to persuade and make the case to the fund and asset managers who determine the investment decision.
• Investors need materiality
• “Data can’t solely tackle climate change alone”
• “Data isn’t the game changer”
• “Data – not having the relevant data or trying to analyse too much”
• Data has an expiry date yet some data is important to keep for retrospect and benchmarking
However, data acts as a foot forward. Data acts as a lever and enables one to conduct innovative, clever and appropriate analysis which can really start to draw big opportunities and highlight the risks of climate change. Which again comes down to the importance of engaging the wider audience with the results and out comings. Storytelling is key. Otherwise it seems less worthwhile generating substantial and exciting data analysis if there isn’t a platform or audience to receive it. This is crucial for action on climate change.
“What about big data? Can big data drive change?”
It can accelerate knowledge, stem innovative thinking, and help decision-makers make the right choice, and draw and present the financial, social and environmental incentives.
Lastly, it may be going beyond using data to present energy and cost savings but just using common sense that building a highly eco-friendly energy efficient building has long term benefits beyond financial savings. These are the intangible benefits. It is often hard to cement down these intangible benefits, especially to a CFO or CEO, but there are clear and obvious co-benefits to going green and thinking sustainably.
There is an increasingly complex array of options available to companies to report their carbon position – The CDP, DJSI and more. For financial and time reasons they cannot engage with all of them. How should companies weigh up their options, particularly when some of them name companies who have not responded? How difficult is it to withdraw from a framework?
Which reporting frameworks are adopted and why?
- The roundtable discussion was attended by representatives from a range of organisations across the public and private sectors, which have adopted a variety of mandatory and/or voluntary reporting frameworks for different reasons.
- Participants from the public sector noted that reporting frameworks were usually adopted by their organisations on a mandatory basis.
- Representatives from private sector organisations used a combination of mandatory and voluntary reporting frameworks (such as the CDP, DJSI and FTSE4Good).
- In the private sector, voluntary frameworks are usually adopted where there is pressure from internal/external stakeholders or there is a clear business case to do so.
How valuable are reporting frameworks?
(1) Management processes: some participants mentioned that reporting frameworks were a useful internal management tool and could enhance consistency across different organisations.
(2) Environmental performance: participants were divided about whether reporting frameworks actually improved environmental performance in their organisations. In relation to CDP, one participant mentioned that it was difficult to establish a correlation between CDP scores and a reduction in carbon emissions, adding that with increased resources or by employing consultants, it was very easy to boost the CDP score without reducing carbon emissions.
(3) Efficiency: one participant mentioned that the CDP did not any business value in terms of efficiency.
(4) External stakeholders: most agreed that reporting frameworks are valuable where there is a demand from external stakeholders/shareholders such as investors, clients and consumers for their organisation to adopt such a mechanism.
Issues with climate reporting and potential solutions
- Participants agreed that there was an overwhelming array of reporting frameworks to choose from.
- Some participants noted that their organisations were locked-in to frameworks that are not necessarily the most relevant or useful for them. Adopting a more relevant framework might make it easier to withdraw from a currently used, less relevant framework.
- There was a general consensus that reporting takes up a lot of time, effort and money.
- There tends to be a lot of overlap between different reporting frameworks and engaging with more than one framework further adds to the amount of work involved.
- Participants agreed that reporting frameworks need to be refined to avoid overlap.
- It would be useful to have an overarching body to regulate reporting, but not clear who this would be.
- There is a need for more industry and cross-sector collaboration by organisations in order to feedback to framework-setting organisations about what does and does not work.
- Cross-sectorial bodies, such as the Aldersgate group can be more effective at creating change.
- It was also noted that there is a value in bringing similar companies together as they know their industries best. On the other hand it was mentioned that it is also very useful to consult stakeholders.
- While it is useful for industry to contribute to the framework-setting process, if standards are created solely by industry they might be seen as less legitimate than if created by an independent body.
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