Net Zero is Dead, Long Live Climate Action
By Jeremy Cohen, Partner, & Nicole Clucas, Senior Consultant
COP26 failed. There, we said it. It was pitched as our last chance to truly tackle climate change with urgency. What did we get? A set of loose targets, flimsy commitments, no stakeholder accountability, and the dismissal of concerns of smaller countries and activists, including those already living with the real effects of climate change. As the failure of COP26 has sunk in, something new has emerged. Pressure on business – from all sides (including governments) - to take the climate action baton…or proverbial hot potato.
Consumers are more aware than ever of the consequences of their purchasing decisions, and – slowly but surely - are actively seeking out more sustainable options. But are they really ready for more visible climate engagement? Do they care enough to make sacrifices, including paying a little more? Do they understand – and trust – the jargon and call to action? Are they looking for solutions in their name, or for information so they can play their part?
A recent survey about sustainable online shopping from Hermes, published across the British tabloids (unthinkable 5 years ago), found that despite 48 percent of respondents saying that receiving an online delivery was “the highlight of their day”, 37 percent worried about the damage the package causes the environment, with 27 percent suffering "green guilt”. Carbon labelling is getting closer and will only increase awareness and “green guilt”. Brands that understand this need to prepare for Climate Action now if they don’t want to be in the low-cost airline category in the future.
The transition to net zero must be about actions, not words. And even the moniker “net zero” has become just that. Just words. An aspirational label at best. Corporates have benefited by pointing to an end-game target on the horizon, without publishing detailed roadmaps for how they will get there. The shallowness of net zero has been highlighted by conflict of interest claims at the Science Based Targets initiative. And a recent ShareAction report shows heavy investment in fossil fuels from major global banks, despite signing up to the feted COP26 GFANZ agreement less than six months ago.
Actions, not words.
So, how do companies ensure they become a sustainable part of the solution? Firstly, there is a real need to push past the easy, quick wins, to the hard asks - Scope 1 and 2 (a company’s direct emissions) are – for the most part - low hanging fruit. It’s too easy to point to “net zero” for Scope 1 and 2, without taking the more complex steps involved in addressing Scope 3 (indirect, including supplier and emissions at the consumer level from product usage), and too few companies have Scope 3 targets. And even then, it’s not enough simply to set a 30-year Scope 3 net zero target. Without a detailed pathway roadmap, ideally starting immediately and with annual goals for the coming decade, file it firmly in the “aspirational” category.
Secondly, stakeholder engagement - education and activation - is critical. That starts with empowering stakeholders with clear and consistent information and easy comparators. This holds as much for investors, shareholders, and employees who are drowning in the ESG alphabet soup, as it does for small and large suppliers and partners, and consumers. Sustainable investing is a minefield. Companies’ ESG credentials are being scored very differently by ratings agencies, meaning the sector is becoming increasingly hard to navigate for investors and more akin to the wild west, rather than a green utopia. For consumers, ensuring they can understand how they can make the biggest difference day-to-day is vital – many people still think of recycling as their biggest environmental contribution, whereas flying less or reducing meat consumption makes the biggest difference to an individual’s carbon footprint.
In our view it’s key that companies:
Lean into the difficult issues and tackle these head on e.g. have the tricky conversations about material business issues, work with SME suppliers on climate action.
Practice active listening – with your critics, consumers, and wider industry – really listen and take note, report back on progress and next steps, and crucially, where you need their input.
Be honest and transparent - about the challenges you face and the support/technical solutions you’re looking for. You’ll be surprised where this can lead in terms of new partnerships, working with university spin offs on new solutions or a step change in NGO engagement.
Focus on IMPACT, IMPACT, IMPACT – what are you doing NOW – how will it make a difference a year from now? How are you making it relevant and meaningful for all your stakeholders: consumers, employees, investors, regulators?
A stakeholder hurricane is fast approaching, and companies need to get ahead of it. Businesses must stop treating their stakeholders like idiots. It’s about what you do, not what you say. Net Zero is old pat and stakeholders are wise to it. Climate Action is the new game in town, and even the best communications can’t make actions out of words.
Jeremy Cohen is a Partner at Blurred with more than 25 years’ senior sustainability and ESG experience at companies including Philips, Shell, Arcadis, and National Grid, and agencies including Edelman and SalterBaxter.
Nicole is Senior Consultant at Blurred with 13 years of experience in sustainability working with major global companies, specialising in sustainability strategy, stakeholder engagement and communications.