World Environment Day: An annual time to bring awareness to and spur action for the protection of our ecosystem. “Beat Plastic Pollution” is the theme for 2018 and all companies should be looking at how they can reduce plastic pollution.
However, for the business community and world at large, conservation and sustainability are more than a one-day concern.
Addressing climate change and protecting finite resources are two of the most pressing issues the planet currently faces. Despite scientific evidence that shows we are destabilizing our climate and polluting the environment, many corporations continue to pursue unsustainable economic models. These behaviors pose an ecological threat, as well as untold risk to human and economic health. For example, extreme weather events are becoming more common. See the recent hurricane in Puerto Rico, which inflicted an estimated $10 billion in productivity losses, and found residents without homes, power and critical services. The country has still not recovered.
The Long-term Danger of Short-term Goals
Companies that are focused on short-term profits at the expense of long-term sustainability will not survive. Research has found that companies that operate in true forward-looking fashion have consistently outperformed their industry peers since 2001 across almost every financial measure that matters.
Earlier this year, Larry Fink, CEO of BlackRock, issued a manifesto to CEOs calling on companies to act responsibly. In his letter, Fink says, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society… companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce?”
Fink is not alone in his sentiments. In 2015, the G20 Financial Stability Board recognized a growing need for financial markets to have clarity on climate change risks. The result is the Task Force on Climate-Related Financial Disclosures (TCFD). TCFD’s purpose is to develop consistent, reliable recommendations for climate change-related financial risks. While other forms of reporting have sought to disclose this information in the past, none have been as sweeping as the TCFD, which are now correlated with CDP’s climate change and supply chain disclosure questionnaires.
The First Steps to a Sustainable Strategy
To overcome these obstacles, companies and the people who direct and manage them should focus on what’s within their direct sphere of influence. Here are some examples of actions corporations can take:
- Partner with a non-governmental organization (NGO)
Companies just starting out on their sustainability journey should partner with NGOs, which have the necessary skills, connections and assets, and understand community needs and policy implications. For example, Coca-Cola works with WWF to help conserve freshwater resources, non-profit Ceres works with Apple, Citigroup and Nike to develop sustainable business practices, and Schneider Electric partners with Sustainable Energy for All to further our Access to Energy Look for NGOs that share similar interests and take the opportunity to learn from each other.
- Build a circular economy to fuel business growth
A circular economy “entails gradually decoupling economic activity from the consumption of finite resources” and is based on three principles: design out waste and pollution, keep products and materials in use, and regenerate natural systems. Schneider Electric is part of the Ellen MacArthur Foundation’s CE100 and has a goal to achieve 75 percent of sales under our Green Premium™ program.
- Set goals as big as the problem at hand
More and more companies are setting ambitious sustainability goals, including transitioning to renewable energy. More than 130 companies, including Schneider Electric, have joined RE100 which means making a global, public commitment to 100 percent renewable electricity. The United Nations recommends focusing on where you can make the most impact, , making goals ambitious, connecting goals to revenue generation or risk management, and ensuring support across the organization.
As a global corporate citizen, awareness and action for Schneider Electric means asking ourselves if we are doing the right thing for society, and challenging ourselves and others to improve — every day.
On this World Environment Day, I encourage other business leaders to begin to think holistically about sustainability — as a cornerstone strategy for a responsible, agile, 21st-century business.
Learn more about the many strides we are making across the company in the Schneider Sustainability Report 2017 – 2018 or read the report Living by Principles: Business resiliency through increased circularity .
Contributed by Emmanuel Lagarrigue, Chief Strategy Officer, Schneider Electric