Forty-three per cent of boardrooms do not intend to approve a net zero transition plan in the next 12 months, according to a new survey.
Data shows that in 2019, 16 per cent of the global economy was covered by a Net-Zero pledge by 2050 in and in 2021, this figure increased to 68 per cent. CEOs understand that sustainability and ESG factors are critical to future business success, so why have boardrooms been slow to act and what is preventing them from making significant progress to cut carbon emissions? asks Jonathan Hall, managing director of Kantar’s Sustainability Transformation Practice (STP).
Chapter Zero is a network of over 2,300 non-executive business leaders. A recent survey of members has revealed significant disparity in boardroom progress to Net Zero with 43 per cent saying their board does not intend to approve a transition plan in the next financial year. So, whilst there has been progress in terms of ambition to reach Net Zero, there is a huge disparity between business ambitions and tangible frameworks to implement the changes that are so urgently needed to keep 1.5C alive.
Today, the most progressive businesses and boardrooms see Net Zero as an opportunity to stay ahead of the competition and differentiate themselves from competitors.
“Governments are increasingly looking to citizens for demand signals to drive the legislative agenda and there has been a pivotal shift in the call to action from citizens,” said Hall. “This movement is putting pressure on boardrooms and increasingly placing them under the spotlight.
“There’s also an accelerating demand for climate action from younger generations. For many Gen Zers and younger Millennials, sustainability is more than an interest or passion – it’s a core factor in how they identify and live their lives. Three quarters (75 per cent) of Gen Zers want to work for organisations that align with their values, signalling that boardrooms will need to build more resilient and environmentally friendly businesses to attract young talent.”
As businesses pivot to conform to rapidly changing regulation and legislation, it’s clear that the way in which businesses address their decarbonisation strategy is becoming more of a strategic boardroom decision than ever before, defined by future risk and opportunity.
When it comes to consumers, and their sustainable actions, behaviours are not matching up with beliefs. Data has revealed that 97 per cent of people want to live a sustainable lifestyle, but only 13 per cent are doing so. Other findings have shown that 88% of people want businesses to help them lead a sustainable lifestyle. This demonstrates a strong call for action for businesses to make the changes that drive more sustainable behaviours.
“Fundamentally, businesses need to evolve commitments into robust, measurable plans that deliver Net Zero in line with multi-stakeholder needs,” said Hall. “Addressing this requires bravery, purpose-led commitment, as well as an assertive level of optimism from those with influence, swimming against the tide at a time of deep political, economic and social uncertainty.
“In this context, we look to the non-executive director community to push for change and translate good intention into concrete action. Boardrooms need to reframe the concept of sustainability by positioning it as a growth lever, not an inhibiter. To ensure diversity in thought, boardroom members should listen to multiple voices across the business to gain a deeper understanding of the realities facing the organisation and how such realities intersect with Net Zero. Lastly, they must be encouraged to continuously learn and develop their knowledge on Net Zero, as well as feel empowered to collaborate with partners in their sector and beyond.”