According to CAB Members, climate change is increasingly taking centre stage in their strategic business planning. The transition towards a more resilient, sustainable, and inclusive ‘net zero’ emissions business model, once seen as a ‘nice to have’, is now central to strategic business planning and risk management.
Transitioning to a net zero carbon business model forms part of a Member’s ‘Environmental, Social, and Governance’ (ESG) investment. These investment funds are increasingly integrating metrics aligned with environmental impact, climate risk mitigation, and strategies toward greater use of renewable energy, innovations and products in their business activities.
It is critical to understand the extent to which the Environmental ‘E’ pillar of the ESG ratings reflects carbon emission reduction, efficient resource use and investment to support renewables. Understating these issues allows Members to make informed decisions relating to supporting an orderly transition to a low-carbon economy. CAB Member’s customers, such as main contractors, are beginning to give a higher weighting when at tender stage, to the existence of suppliers climate related corporate policies, targets and objectives.
The adoption of ESG is now not an option, it is an investment in the future of any business that will need to minimise carbon emissions not only in tendering for business, but also in future legislation as Government will increasingly penalise companies not on the net-zero path. Climate change, which is now upon us, is already risking business provability, these risks can be broadly placed in three categories:
Businesses are confronted with a steady increase in ‘physical risks’ as the planet warms, this could be in the increased risk of natural disasters, such as floods and droughts, but the risk also extends to resource availability and cost.
There is also the possibility of ‘litigation liability risk’ where members of the public could hold a business accountable eg. greenhouse gas emissions which have knowingly or unknowingly threatened people’s livelihoods. Companies and their Directors are likely to face greater legal liabilities if they fail to assess and disclose financial risks associated with climate change and their impact on company performance.
The ‘transition risk’ is a failure to keep up with rapidly changing technologies, markets, policies and social norms. Government policy and national bodies are increasingly implementing and enforcing action which include regulation and stringent carbon pricing that incentivise or force businesses to reduce their carbon footprint and positively contribute to greener growth. Staying ahead of changing policy will be crucial to continued business success.
Taking all these risks into consideration will help any business steer through the changing landscape and help maintain company growth and profitability. CAB is committed to helping its members through the rapidly changing landscape and have recently launched its initiative ‘ Journey to Net-Zero with CAB’, Phill Slinger, CAB CEO explains the initiative:
“We have introduced a range of new member benefits that will assist members to achieve their corporate sustainability and environmental aspirations. We appreciate that for a business to be sustainable it needs to thrive, so our new initiative is aimed at cost reduction opportunities as well as carbon reduction with the aim that the process for each company will be at least cost neutral.
“We are working in partnership with environmental consultants who have developed a carbon accounting process to provide accurate greenhouse gas inventories and emissions reduction advice, using international standards and protocols. We understand the link between “carbon” and “costs”. Our advice is aimed at cost reduction opportunities as well as carbon accounting. The goal is for the process to be at least cost neutral for members.”
Should you wish to learn more, please contact CAB directly. Why not consider joining the Association and be recognised as being involved in supporting your Industry and helping to shape its future. More information on our website at c-a-b.org.uk
