Corporate leaders gathering at the recent North American Sustainability & Responsibility Summit (NASRS) 2023 discussed the impact of the Inflation Reduction Act (IRA) on businesses, causing many to bring a different way of thinking and acting to what was business as usual. Renewable energy, regenerative agriculture and circular design are hot topics for organisations keen to take steps on the road to net zero, but meaningful change requires strategic and sustainable growth.
Participating at the NASRS event for the first time, the Risilience team heard from many business leaders in the thick of their net-zero journey, sharing strategies across sectors to progress net-zero goals in an increasingly challenging marketplace.
How do companies meet business objectives while transitioning to align with a net-zero future? As an analytics company working at the leading edge of quantifying climate and enterprise risk, Risilience brings expertise to a range of large organisations, including Nestlé, Burberry and Reckitt, supporting them to develop and understand the cost benefit justifications for net-zero plans. Our approach shows the relationship between the quantification of risk, the potential financial loss that a company might suffer, and the amount spent on offsetting that loss and the associated mitigation.
Data is key to gaining actionable insights that enable strategic decision making. Using an organisation’s data to explore a number of ‘what if’ scenarios, Risilience offers business leaders a line of sight to possible options and actions – and their potential financial outcome. Making the transition to a green economy does require, in some cases, transformative company change but identifying exposure to climate risk, including the rise of climate litigation, can also prepare a business to take advantage of new opportunities emerging from the evolving business landscape.
Our approach rests on four pillars of sustainable growth: consumer centricity – understanding social and behavioural change; market intuitiveness – macro-economic changes that will be brought about by environmental change; adapting to innovation – trajectories of technological advancement and projections of future economics of the environment; and operational agility – performance indicators, tools and processes that align with business transformation needs.
While organisations are at various stages and transitioning at different speeds towards net zero, all businesses need: a deep understanding of the existing and future customer base; the ability to scale around emerging technology; insights into the changing market and emerging regulation; and the operational agility to manage the transition. Companies with consumer centricity at the heart of their planning, and organisations positioned to pilot innovation and test at scale, are excelling right now.
While uncertainties are abundant, including the delayed decision by the SEC to finalise its proposed climate disclosure rule now due in April, pressing pause on climate-transition preparations is not an option. Not taking climate action risks eroding business value – Risilience research found this could be up to as much as 30 per cent over the next five years – and can lead to customer attrition, supply-chain breakdown, reputational damage, direct legal action and, ultimately, financial impact.
It has never been more important for companies to develop an informed and insightful climate-aligned business strategy; one that moves the marker from merely surviving amidst these complex challenges to unearthing the opportunities for growth as part of a sustainable future.