WHAT WE’RE FOCUSING ON IN 2024
Reasons for optimism
A world of renewables
How businesses can adopt a climate resilient stance
Learning to use AI for sustainabilty
Preparing for more wide-spread and stringent reporting
STAYING POSITIVE—Progress is being made
Hannah Ritchie of Our World in Data takes an optimistic view on a sustainable transition to fight against climate change, rejecting doomsday scenarios, even while politicians move slowly and fossil fuel giants lobby hard against change.
In this interview with BNEF-founder (and hydrogen critic) Michael Liebreich, Ritchie discusses her new book “Not the End of the World” and how the pace of change and statistics that back it up has moved her from “eco-anxiety” to the hope that “energy, transport, food and construction [can] rein in climate change while improving human wellbeing at the same time”.
Use what works: Ritchie points out that “people are often looking for perfect solutions that don't exist. The reality is, we're not going to find any alternatives that don't require some land, don't require some inputs, don't have small amounts of waste.”
The RtA Take: A lot of what needs to happen is basic structural change within businesses and the application of existing technologies (we see you standard solar PV panels). Companies can participate in and benefit from the ongoing transition by providing solutions to advance it or adopting sustainability-led business practices that make them more competitive than companies that are refusing to evolve. Whether a company is in agriculture, energy, fishing, forestry or other impactful industries, or exposed to issues around emissions, plastics, pollution and more, there ways reset purposes and business plans to grasp new opportunities. While Ritchie’s optimism may not be felt by activists and anyone hit by a barrage of bad headlines about climate change, businesses that are acting “as usual”, and slow policy responses, sustainability leaders are continuing to make progress, whether under the radar or in public view.
COP 28—How should businesses respond to the eventual decline of the fossil fuels industry?
As often happens with COPs, there was a lot disappointment around this year’s in Dubai, which was plagued by fossil fuel business lobbying scandals. But it would be hard to argue that the oil and gas industry had ever been as front of mind as they were in COP 28, appearing for the first even in the language of the final agreement.
Both major industry associations and environmental activists saw this as the coming of end, even while fossil fuel companies announced further investments that buck the realistic direction of travel that markets and national policy makers are following:
International Energy Agency’s warning: IEA says that “a moment of truth is coming for the oil and gas industry”, with it contracting to 25 percent of it's current size under necessary Net Zero scenarios. According to IEA, CCUS is unrealistic, requiring the same amount of energy as current global demand (in 2022) to capture enough CO2 in 2050 if we follow present policies.
An activist’s optimism: Even long time activist Bill McKibben saw a half-full glass, pointing out that the “the COP is the scoreboard, not the game”, and that a vaguely worded sentence could be interpreted however you wished to advance your goals. Imagine how governments of Small Island Nations will wield the final formulation of “transitioning away from fossil fuels in a just, orderly and equitable manner”. Or, how investors think about projects becoming stranded assets, and how bankers and pension funds are stress-testing their assets against climate change. Or, how lawsuits backed by hedge funds present an opportunity for huge returns from failed environmental pledges.
What should businesses do: Japanese companies and asscociations should be using their lobbying power to promote the development of more renewable energy resources in the country, to remain competitive in investment markets, and defend their pricing power. Read more from RtA here.
TAKING ACTION—What practical steps can business take to transform into organisations that can address climate change?
The 2024 WEF annual CEO survey on perception of global risks puts seven environmental and social risks in the top 10 for severity over the next 10 years.
There are areas that businesses understand and respond to, and then there are new subjects that require the acquistion of new talents and new thinking. It’s safe to say no business so far has been designed to manage a rise of 1.5 degrees C or 2 degrees, or more, and the resulting social and environmental impacts that it will cause.
So it’s fair that it’s a diffcult subject to enter. But researchers have been looking at how companies generally react to novel changes, and how leaders are squarely adapting to new and future global realities.
RtA’s Donald Eubank contributed to “The Handbook of Climate Change Leadership in Organisations”, new title from Routledge edited by Organisational Business Psychologist Dr. Doug MacKie, with a chapter on “Sustainable Goal Setting for Climate Action”. These 20 discussions of climate change leadership show how climate change leadership capabilities can be effectively developed in organisations.
‘The Handbook of Climate Change Leadership in Organisations’ Read the book to learn about environmental, ecological and evolutionary leadership; transformational and ethical models repurposed for the age of sustainability; innovative models developed for the current age including systems, adaptation and maturity-based models of leadership; and sustainable goal setting and climate leadership coaching and development. Now available for 20 percent off from Routledge (also available at Amazon).
AI HAS BECOME A BUSINESS REALITY—But how can corporations leverage it for sustainability?
Now that AI tools are readily available, companies are trying to discover how to use them to improve their transformation to sustainable business models. From guidance on their sustainability journey and improved sustainability reporting, to supply chain risk mitigation and energy/environmental impact analyses, there are meaningful use cases that can help them understand the field and make progress.
But first, businesses need to support teams on how properly use these novel tools in the first place. RtA technology partner Altera Consulting is offering a new comprehensive ChatGPT training program “EMBRACING AI — Mastering ChatGPT for Business Excellence” for various expertise levels.
Altera’s Program Modules cover the basics, operational mechanics, and use cases; complex prompts, output formats, privacy, and workflow optimization; and instruction on how to create and manage Custom GPTs, critical analysis of outputs, GPT marketplaces, and automation..
Learn more: For information on pricing and services, visit Altera’s ChatGPT Integration& Training page or contact Victor Meysonnier.
REPORTING—Converging disclosure standards drive heightend reporting across value chains
In 2023, RtA produced two reports about how reporting standards are becoming global and how well prepared companies are for these developments:
Food in Japan—”Setting the Table for Sustainability Disclosure”RtA focused on how well companies in Japan are prepared for ESG-aligned reporting, with a focus on the Food industry. We performed our proprietary Sustainability Gap Analysis (SGA) across a sample of listed Japanese Food businesses, and found that the retail, processed food and fast food sectors are well positioned to report, while ingredient suppliers require improvement in certain important areas. While the study (English; 日本語) was focused on the Food industry, the findings could easily be applicable to most businesses in Japan, or elsewhere.
CSRD—”The Long Arm of the EU Law”RtA investigated the the impact of the EU’s Corporate Sustainability Reporting Directives (CSRD) beyond its borders, and how soon many large Asian businesses with EU operations will find themselves subject to the comprehensive non-financial reporting requirements. We identified how CSRD non-EU entity criteria will lead to hundreds of EU branch offices and subsidiaries of Japanese multinationals having to disclose under CSRD, including major companies such as Toyota and Sony (English; 日本語).
STAY TUNED: RtA will share more on how companies can best prepare for non-financial disclosure, which we have researched and developed under our ESG Assessment & Reporting services (ESG A&R 日本語).
Thank you again for your partnership and patronage for another year. We look forward to continuing to collaborate in 2024.
Trista and Donald
Dragon Icons Courtesy of Vecteezy.com