Climate Cooldown

Is it evolve or die for businesses?

October 2023

The Climate Cooldown newsletter is a monthly roundup that focusses on positive business and marketing-related climate news, steering away from the doom and gloom.

As an agency, we talk a lot about the importance of transparent communication - generally in reference to the latest marketing guidelines. And this is clearly very important as regulators are cracking down on greenwashing.

However, the pressure to be transparent is coming from other sources too. 'Big business' is starting to turn the screws as they lean on their suppliers to meet their own Net Zero targets.

They need to be sure that their supply chain is 'walking the talk'.

The 'carbon' tax

Sodexo for one, is threatening to cut contracts if their suppliers can’t demonstrate net zero progress. A whopping £800m worth.

What’s more, wider regulation is driving change too with the EU incentivising low carbon products by introducing an import ‘carbon’ tax.

The European Carbon Border Adjustment Mechanism (CBAM) came into force on the 1st of October, requiring businesses that import goods from outside the EU to report on all direct and indirect emissions. As part of the crackdown on 'carbon leakage', they will eventually have to pay a ‘carbon’ tax on these.

What can businesses gain?

But, as we all know, where there’s a threat, there’s an opportunity, and businesses that are genuinely delivering on their decarbonisation targets have all to gain here. And there are plenty of other benefits of being an early mover in this space.

Act now to reap the rewards

PwC has put together a great overview where they compare the current paradigm shift towards a low (and eventually zero) carbon economy with that of the digital transformation, and the parallels are many.

Whether businesses embrace the coming changes or not, those changes are coming down the line at quite some speed.

PwC states that a major benefit of acting early means that businesses are more likely to be able to hire employees with scarce critical skills. This is a huge advantage as only 1 in 8 people have the right skills in this space, according to the latest data from LinkedIn.

Becoming 'carbon literate' can help

In fact, the businesses we work with are investing in upskilling their workforce including carbon literacy training, which is increasingly becoming a supply chain requirement in many industries. (And yes, Hattrick can help with that!)

Green skills training

Interestingly, as another sign of the shifting sands, recruitment agencies are making their candidates more employable with their own green skills training programmes.

Early adopters are also more likely to benefit from the strong partnerships needed for transformation, especially given that few businesses have all the skills and resources required to move to Net Zero on their own.

Luckily, the World Economic Forum (WEF) has published a great 'supply chain' guide to help businesses get there.

Cutting costs

And, as is widely acknowledged by the likes of PwC and Black Rock, investors with trillions of dollars in capital are increasingly scrutinising environmental, social and governance factors before parting with their cash.

Early movers can also benefit from lower costs as a move to Net Zero can reduce operational costs overall: lower energy bills, fewer travel costs, reduced waste and so on.

Take action now!

Finally, there’s the expertise that early movers build. That learning gives them a huge advantage and keeps them ahead of their competitors for longer.

Or in the words of Lynne Baber, Sustainability Practice Leader, PwC UK:

“Without taking action now, you’re going to lose out on the market presence you’ve currently got.”

What we've been reading & listening to this month

Great watch: In her TED Talk, 'A healthy economy should be designed to thrive, not grow', Kate Raworth presents her bold vision for the 'Doughnut Economy'.
Book read: Net Positive by Paul Polman (former Unilever CEO) and Andrew Winston (top 50 world management thinker) shows how businesses that give back attract top talent, are more innovative, and ultimately more profitable.
Great resource: The SME Climate Hub is a global platform to help small and medium sized business (SME) decarbonise.