Five Lessons from Climate Week NYC 2024
Dr Andrew Coburn, CEO of Risilience, responds to the event’s clarion call with next steps to put sustainability plans into action.
While it’s a wrap for Climate Week NYC 2024, the business of sustainability is far from over.
Many global organisations have spent the past few years assessing the magnitude of their financial exposure to climate change, ensuring they comply with regulations through their reporting and transition planning.
The message is that it’s time to put these plans into action.
Here’s my top five insights from the week to help organisations make sustainability their business.
1. The critical role of financial quantification
Fiscally responsible decision-making on the path to net positive means understanding and financially quantifying the risks and opportunities presented by sustainability in order that a company can make a robust and actionable transition plan.
Quantifying the financial consequences of the climate and nature crisis sets a clear baseline that helps organisations estimate the value of mitigation and adaptation, and the costs and benefits to the business. Understanding and demonstrating the connections between implementing sustainability and financial value – and the opportunities it presents – is key to making the business case: the impact of sustainability on corporate strategy is value creation. According to the World Economic Forum, there is US$10.1 trillion of global value to business from adopting a nature-positive strategy.
The most successful organisations take a data-led approach to decision-making, enabling goals to be realised in the most optimal way. This means achieving sustainability targets while simultaneously maximising growth and business profitability – not an easy task in an environment constantly in flux. But organisations cannot afford to ignore increasing regulatory demands for big business to demonstrate environmental stewardship. Net positive is coming, ready or not. Organisations unprepared for this future may not have one.
2. Business as usual is changing
It’s all change for business. In addition to international agreements and government-enacted regulation, companies face new expectations to demonstrate a genuine commitment to prioritise sustainable practices across their operations and supply chains from a growing list of sources, including investors and consumers, new financial rules, shareholder resolutions, climate- and nature-related litigation, employee preferences and demands, and peer benchmarking and reputation management.
Businesses can no longer operate with impunity. Increasingly, companies are required to look beyond just profit and consider the consequences of their actions for people and the planet. Leading firms are now establishing new standards, which will become the benchmark from which all organisations will be held accountable – giving them the social licence to operate as a business of the future. Businesses that fail to build resiliency into their organisation, through understanding and quantifying sustainabilily-related risks and opportunities, face the very real threat of being disrupted and left behind.
3. Climate action is not about sacrifice – it is about opportunity
More CEOs are leading this charge: nearly a third (30%) of global CEOs say that climate change will drive the way their companies create, deliver and capture value to a large or very large extent over the next three years, up from 22% who said it drove company actions in the past five years, according to PwC’s 27th Global CEO Survey.
In fact, it’s about both – at least in the short term. Addressing sustainability does require investment, but organisations preparing for the net positive future will benefit from opportunities, including access to new streams of capital, building a resilient supply chain, and enhancing brand and business value.
Using insights to inform decision-making and building a cost-optimal pathway will best position the organisation for success as the economy moves through the next phase of the transition to the net–positive future.
4. Sustainability as a business imperative
Sustainability can no longer be approached as an add-on to business. In fact, organisations that integrate sustainability into the business strategy, providing a critical lens for all decision-making, will begin the transformative process towards profitable sustainability.
Sustainability is now an unavoidable constraint within which all businesses need to operate – the new business-as-usual. An astute business strategy will consider the relevant and interrelated climate- and nature-related risks and opportunities to secure profitable sustainability, an approach that will likely dominate future business strategies. The sustainability industry is already aware; consulting and technology offerings are becoming more tightly packaged into strategic rather than simply compliance or quantification products.
5. The power of innovation and technology
One element of innovation and technology frequently overlooked in business planning is the cadence and magnitudes of improvement.
The trajectories of innovations can vary greatly between different technologies and systems, from high-frequency incremental improvements in technologies, such as solar PV, to slower but larger breakthroughs, including direct-air capture or green hydrogen fuels. Capturing the benefits of these advancements is often dependant on internal business cycles, such as the rates of asset write-off and replacement. Making assessment of the cadence of internal cycles and aligning these against the external technology landscape will become essential for companies seeking to make the most of a net positive transition.
Value of sustainability
Business leaders are increasingly seeing the value of sustainability., In a recent IBM study, 75% of executives agree sustainability drives better business results. It really is time to get ahead in the race to decarbonise, integrate financial and transition planning, unify sustainability and business strategies, and prepare to thrive in the net-positive economy.
As Helen Clarkson, CEO of Climate Group and Climate Week NYC host, said at the opening ceremony: “What we’ve achieved in the last decade is remarkable, but we cannot stop here. We must aim higher, be bolder, and keep pushing forward. How the future will judge us depends on the action we take right now, it’s time.”
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