How companies can incorporate climate into their strategies

With climate action an ongoing imperative for organisations, it’s essential for companies to embed it into their strategies. Martin Kennedy explains how companies can do this by using the UN’s Sustainable Development Goals (SDGs), with a particular focus on SDG 13.

In 2015, the United Nations General Assembly came up with 17 interlinked global goals designed to be a “blueprint to achieve a better and more sustainable future for all”. These 17 goals are called the Sustainable Development Goals (SDGs) and are intended to be achieved by 2030.

Number 13 of the SDGs, ‘Climate Action’ (SDG 13), urges us to combat climate change and its impacts. Climate change is now affecting every country on every continent, visibly disrupting national economies and affecting lives.

What can Chartered Accountants do?

As Chartered Accountants and finance professionals we can be a driving force in creating environments where individuals and companies can make a real difference by implementing the SDGs. We can raise awareness and drive advocacy of the SDGs, implement actions within finance and business communities and measure and report on progress towards the SDGs. But how do we get started?

The best place is to examine your company’s strategy, making sure you do the following:

• Educate yourself and employees on SDG 13. You can find information on the UN’s website.
• Identify your company’s initiatives that are currently aligned with SDG 13. Learn more about how the goals, its together with their relevant targets and KPIs, to see how they are directly and indirectly related to your business activities.
• Implement the most impactful initiatives. For example, making improvements in your energy efficiency, renewable energy, waste management, green procurement, vehicle emissions, water conservation, and pollution reduction. When implementing improvements in these areas, set measurable targets so you can monitor your progress against them.
• Report on progress routinely. It is crucial to integrate the SDGs into core business reporting processes to ensure transparency and accessibility to various internal and external stakeholders. Consumers and investors are increasingly more interested in how organisations are impacting both positively and negatively on the climate and on society; the sooner an organisation can set up robust reporting of the impact of sustainability related matters of their business, the better. It is also important to understand whether your company is likely to fall under and meet the reporting requirements of the European Commission’s Corporate Sustainable Reporting Directive (CSRD), which is due to replace the Non-Financial Reporting Directive (NFRD). Over 49,000 companies will come under the scope of this new directive, which will cover the financial year 2023.
• Communicate your company’s commitment to sustainability. This can be included on your website, in email signatures and on other client and customer-facing content. You can reference SDG 13 for the initiatives related to climate action.
• Lead by example. Be an ambassador on climate action to your employees, suppliers and customers.

Quick wins

As companies start a fresh new year, below are some ‘quick wins’ that you can action now to achieve some SDG 13 improvements:

• Minimise business travel as much as possible. This is an immediately effective way to reduce emissions and cut your ‘carbon footprint’.
• Reduce energy consumption by turning off lights in the office in the evening, slightly lowering the heating or the air conditioning or plugging out devices when not needed.
• Reduce waste by avoiding disposable cups, stirrers, and capsules for the coffee machine and use kitchen crockery instead. Reduce the number of items being printed out and sort waste for recycling correctly.
• Ensure all supplies are sustainably sourced and certified.
• Old appliances and heaters in offices can consume a lot of energy. Replacing such equipment with energy-saving devices is a good long-term investment.
• Consider switching to a green energy provider.
• Renovating an office space? Consider climate-friendly alternatives for materials, such as eco-friendly non-toxic paints, and installing water saving taps in the toilets. Installing solar panels or a rainwater harvesting system will also help minimise your energy and water use.
• Supporting organic and ecological products can help build sustainability habits among your team, for example, sustainable Christmas gifts for employees.
• Set up or re-launch your company’s ‘Green team’. This is an effective action to take as it is relatively easy to do and its impact can be measured.

Look at the other SDG goals

It is worthwhile to note that the SDGs are interlinked. When you imbed SDG 13 into your strategy, you may also be contributing to the goals of other SDGs – for example, Affordable and Clean Energy (SDG 7), Sustainable Cities and Communities (SDG 12), Life Below Water (SDG 14), and Life on Land (SDG 15).

Climate change threatens to undermine food production, water supplies, ecosystems, energy security, and infrastructure. However, tackling this urgent issue now can also bring benefits, such as new ‘green’ jobs, improved competitiveness, economic growth, cleaner air and secure energy supplies.

Martin Kennedy is Head of Internal Audit atAzelis and member of the FinBiz2030 Ireland Taskforce Climate Action workstream.