World Environment Day: Driving action together

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Today marks World Environment Day. With 47 years of history, this day is dedicated to encouraging awareness and action to protect the environment. This year’s World Environment Day is driven by the theme "Reimagine. Recreate. Restore", as this year marks the beginning of the United Nations Decade on Ecosystem Restoration.

It has been a long road since the first environmental movements back in the 1960s and 1970s, when people were strenuously fighting for cleaner water and air, and trying to make a case for the responsibility of businesses against the society and the environment.

More than five decades later, the world population is waking up to the ecological crisis showing a global rise in environmental concern. There is a continuously growing momentum for environmental and social responsibility, else know as sustainability or ESG (Environment, Society, Governance), with a persisting emphasis on the environmental pillar. Businesses can no longer afford to do nothing. As the impacts of global threats, such as climate change, deforestation, biodiversity loss, and air and water pollution, increasingly become more prevalent, successful businesses that want to ensure their longevity and competitive advantage, will future-proof their organization and be ready to address any environmental risk that may come their way.

Climate change, being one of the most pressing challenges of our time that requires businesses to be both sustainable and innovative, is moving up both the political and corporate agendas. At the beginning of the second decade of the 21st century, the EU committed itself to protecting the environment and combat climate change, through an ambitious long-term strategy, leading Europe to a climate-neutral economy by 2050, with net-zero greenhouse gas emissions. This objective is at the heart of the European Green Deal and in line with the EU’s commitment to global climate action under the Paris Agreement, as well as a testimony that the environment is moving to center stage through substantiated, robust and actionable plans that allocate responsibility to a wide range of stakeholders, and businesses in particular.
What is even more positive is that companies are embracing change that can positively affect the environment, while successfully managing risks. Businesses are recognizing the multifaceted benefits that arise by actioning on their environmental responsibility, and are, therefore, taking bold actions which involve the following:

Setting ambitious goals

Leading companies in Europe are setting ambitious environmental and climate commitments, which, not only align with the EU climate agenda and the goal to fully eliminate greenhouse gas emissions by 2050 but are even aiming to reach net-zero emissions before the EU deadline. Such a practice allows companies to be ahead of the curve and have a competitive advantage against their peers, by showcasing their leadership and forward-thinking mindset.

Aligning business practices with leading frameworks and standards

Companies that want to succeed and be ahead of the game align themselves with leading frameworks and standards around climate change and the environment, such as the Task Force on Climate-related Financial Disclosures, Carbon Disclosure Project (CDP), Science-Based Targets initiative (SBTi), EU Taxonomy as well as comply with the relevant regulation. This enables companies to significantly improve their practices, by adopting best practice, which is in line with global trends and stakeholder views. In this way they also demonstrate the commitment and priority placed on the matter, establishing themselves as leaders in the field.

Embedding environmental considerations into core strategy and business

Leading practice mandates for businesses to integrate environmental and climate change risks and opportunities across their business, and notably into their strategy, their governance, their risk management, as well as performance management process. This holistic and well-rounded approach first of allows companies to future-proof and strengthen their business, while increasing the readiness to address any risks that may be brought in their path. Having a strong firm, with robust practices that ensure business longevity, further attracts potential investors who see value in the business.

Raising awareness among stakeholders

Raising environmental awareness and responsibility among employees, customers, suppliers, and other key stakeholders is one of the most important trends that European companies have developed. More specifically, companies are gradually recognizing their part for having a responsible and environmental-friendly supply chain, as it affects their own footprint. Therefore, they are putting effort in choosing suppliers who demonstrate they have robust environmental practices and systems in place. Through assessment procedures and platforms (such as EcoVadis), ratings and scorecards, companies are putting pressure on their suppliers to improve their transparency and sustainability practices.

Reporting on environmental and climate-related issues

Last but not least, companies that wish to showcase their leadership and competitive edge go one step further and disclose their strategies, goals and targets, systems, risks, and impacts, in line with leading standards and frameworks. This added level of transparency allows businesses to share their thought leadership and to engage with a wide range of stakeholders, notably investors, which also enables companies to attract new or additional sources of funding.

Let us leverage this World Environment Day and use it, not as another reference to the world calendar, but as an annual milestone of corporate reflection of business action to promote the strategic goals towards sustainable development.

Grant Thornton | Insights

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