Businesses align with customer desire and include net-zero goals in their business plans. Businesses flourish when they produce goods and services that customers want. In most parts of the world, customers are concerned about global warming. They are worried about changing weather patterns. People are experiencing extreme weather events now almost every year. Weather changes have started making an impact on day-to-day life.
A global consensus on achieving net-zero carbon emission targets has been reached in response to public pressure supported by climate data. Countries have made plans. They are also making regulation changes to help achieve climate goals.
Businesses need to stay competitive and aligned with customer priority. They have no option but to make net-zero plans. Failure to do so will impact brand image. Customers will go to businesses that are responsive and supportive of climate goals. Investors, too, have started factoring in climate risk in their lending models. Funding will be available only to those businesses that conform to national and global climate goals.
Businesses, therefore, have no option but to get fully behind climate change abatement efforts. Every business sector, including fossil fuel producers, consumers, and miners, has planned to be net zero by a date. These plans are getting monitored assiduously by their Boards. The strategies and details are being made available to the public. Companies are telling their customers that they are proactively addressing customer preferences.
A survey conducted by Deloitte in 2019 asked 1200 CFOs of European businesses about their companies’ measures against climate change. The results indicate that most of the company’s actions were focused on short-term cost savings. Actions were triggered by stakeholder pressure even though companies did not generally appear to have a thorough understanding of climate risks. Companies also did not have a governance and steering mechanism to develop and implement comprehensive climate strategies.
Investors want climate actions to become more central to their activities. Almost 400 investors representing more than $35 trillion in assets under management have signed the Climate Action 100 plus initiative. It commits to bearing pressure on the largest corporate greenhouse gas emitters.
It is in the vested interest of companies to not just appear to be climate-friendly but to be seen working towards achieving these goals. Customers are driving this change.