Key Takeaways from London Climate Week 2024
Top 5 Takeaways for Brands and Businesses: Navigating the Path to Sustainability
In today’s world, sustainability isn’t just a choice—it’s a business imperative. Brands and businesses must navigate a complex landscape of evolving regulations, consumer expectations, and environmental challenges.
Those who fail to adapt risk falling behind. Here’s how to stay ahead:
1. Building a Fair Transition
What problems do we solve today versus tomorrow? Is it right to deforest for nickel batteries to build Electric Vehicles? How do we balance solving today’s poverty versus investing in future generations?
Society faces tough decisions, and as a result, we’ve witnessed pushback in recent years. Governments and regulators must better communicate the impact of valuation and human cost.
Furthermore, the Global South is to leapfrog the Global North due to its agile business approaches in manufacturing and finance. Too many businesses are asleep to the value at risk. Good business is good business, and we must strengthen the business case. Yet, SMEs often face resource constraints that hinder their sustainability efforts. It's essential to develop interactive, accessible tools that enable small businesses to embark on their sustainability journeys, just as larger corporations have done.
Why this matters
Inclusive Sustainability: Real solutions require people engagement. We need to stop meandering. The aim is to provide high-quality businesses and outcomes. Governments and businesses must leverage this momentum to leapfrog traditional approaches and drive innovation.
2. Unlock Efficiency to Drive Profitability
Over-consumption and inefficiencies rooted in outdated technology are significant barriers to sustainability.
Companies like Watt IQ are rethinking asset management by leveraging server data to uncover hidden inefficiencies. These approaches can create asset-light, energy-efficient enterprises, unlocking billions in economic value and reducing energy consumption by up to 15%.
Why this matters
Revolutionise asset management: By creating scalable, repeatable, and self-serve asset management systems, firms can not only boost growth but significantly reduce their carbon footprint. Brands must prioritise decisions based on value and lifecycle rather than price alone.
3. Act on Data—Don’t Wait for Perfection
High-quality data drives sustainability efforts, yet perfect data sets remain challenging.
The convergence of emerging global financial standards and the integration of novel metrics like nature-based disclosures alongside climate-related disclosures is reshaping the foundations of economic systems.
The transition from impact investing to Environmental, Social, and Governance (ESG) criteria is gaining momentum. Whilst commonalities exist between the two, there’s been pushback based on subjective methodology, and new regulations have revealed that specific measures don’t hold water.
Why this matters:
Use data as a catalyst for change: Harmonising the metrics used to assess sustainability is pressing. Regulation is vital in improving data standards and adopting more robust and transparent frameworks. Brands must also not wait for flawless data but act with the best available information.
4. Make Sustainability a Competitive Advantage
In 2021, BMW set new sustainability goals to achieve a 40% reduction in carbon emissions. To achieve its results across scopes one, two, and three emissions, it invested in a multitude of initiatives — purchasing green electricity, reducing carbon in paint, and innovations in recyclable parts and hydrogen, as well as reducing fuel car emissions by 30%.
The group found that managing the purchase footprint is much more complex than what you sell. It has cut 11 tons from the supply chain through its decarbonisation efforts by digitising the supply chain. BMW has created a shared digital infrastructure that suppliers use at each step to steer, calculate impact, and disclose. The 5 Series now has its vehicle footprint on the website to make comparisons.
Why this matters
Transparency as a Competitive Advantage: Businesses must prepare for a future where sustainability is the norm rather than the exception. Consider similar holistic approaches, focusing on the entire lifecycle of their products. BMW's initiative to disclose the environmental footprint of its vehicles online highlights the growing importance of transparency with consumers increasingly demanding this level of detail.
5. Craft Consumer-Centric Solutions
Companies like Abel & Cole and Lush are setting examples with initiatives like refillable products and robust claims databases. These innovations reduce environmental impact and resonate with consumers looking for brands that align with their values.
However, their customer base is already self-selecting. Kantar 2023 Sustainability Report found the eco-activist segment was down due to the cost of living.
On a macro level, sustainability alone as a message is insufficient. Brands must find a positive narrative — as people are at capacity with bad news — showing the Me + We benefit.
Why this matters
Beyond Green Messaging: Update customer segmentation, mapping the customer base — from light to dark green — where they are on their journey and finding solutions to make lives easier. Sustainability must be presented as a value-add rather than a compromise, avoiding the pitfalls of price comparisons alone. Brands should also take an incremental approach to storytelling and be honest about how hard it is.
Conclusion: Leverage Capitalism to Drive Change
Use the power of capitalism to turn sustainability into a competitive advantage. Invest in innovations that align with profit and the planet.