Silence on climate is no longer sustainable
As the world adjusts to life with COVID-19, climate change is re-asserting itself as one of the most important issues for investors, consumers, suppliers and voters. Communicating your organisation’s sustainability and climate actions is now an expectation, not just a nice thing to do.
Momentum is growing
2021 has already seen the US re-enter the Paris Agreement under President Joe Biden who has also prioritised climate action via a round of executive orders on climate change. Biden’s announcements have come as the majority of Australia’s major trading partners have also committed to reaching net zero emissions ahead of the next round of UN climate change talks set to take place in the UK this November.
Media and public interest in climate change and the urgent action needed is also returning, and investors are taking notice as the policies of governments and organisations around the world shift. Just this week the world’s largest fund manager issued a warning to 1000 chief executives of carbon-intensive companies to “lift their game or be dumped” while $3.7 billion Melbourne-based fund manager Munro Partners recently described climate change as the biggest investment opportunity since the advent of the internet.
Activism is evolving
Last year saw a sharp rise in shareholder activism with some of Australia’s largest corporates including BHP, Origin Energy, Rio Tinto, Woodside, NAB, ANZ, Westpac, QBE and Suncorp targeted via climate-focused shareholder resolutions. While relatively few were ‘successful’, the shareholder discussion and media coverage generated by each vote helped encourage more ambitious climate policies and targets.
Shareholder activism is set to continue this year, with climate litigation gaining pace. Already an Australian superannuation fund has settled a court case with one of its own members over its investment portfolio, and ASIC has investigated ASX-listed companies over their climate related financial disclosures. We’ve also seen community groups successfully stop fossil fuel projects via the courts in Australia and citizens sue their own governments here and overseas over climate policies.
The key takeout for business in Australia is that substance matters. You cannot ‘spin’ or ‘greenwash’ your way out of a shareholder resolution or court case. Leaving your organisation open to potential reputational damage could cost millions.
Runs on the board
The good news is that not all corporates have been ‘pressured’ into acting and in many ways the private sector is leading on climate action and sustainability here in Australia. The last 12 months have seen many businesses announce ambitious climate change policies and targets, and corporate Australia has led an investment boom in voluntary carbon offsets.
Now that sustainability is not just a ‘nice to have’, but a critical issue for investors, consumers, employees and supply chain partners – as well as for the survival of our planet and our species – it is inevitable that more businesses will announce updated and ambitious climate policies this year.
2021 – a year of opportunity
Organisations that create ‘shared value’ by aligning their business operations with climate friendly plans must also prioritise communication and stakeholder engagement as well.
So if you are a Sustainability Manager or a communications specialist:
- Be proactive: If no one knows what your commitments are and what you’re doing to achieve them, many may assume you’re not doing enough.
- Integrate plans: Consider how communication can complement your organisation’s sustainability strategy, and how your organisation’s sustainability strategy could be the source of communication and engagement opportunities.
- Focus on building relationships: Identify which stakeholders are critical to the success of your organisation’s sustainability strategy. Develop tactics to engage with them proactively and consistently, and make sure this includes executive and board level engagement.
- Maintain awareness of your operating context and key risks: What are the reputation risks associated with your organisation’s approach to climate action and sustainability? Are you an ASX-listed company that is open to shareholder activism? Could you face a consumer boycott? Are investors phasing out exposure to your industry? Research your competitors’ approach to climate and sustainability as well as others internationally – are you ahead or lagging others?
- Share progress and celebrate success: What are your organisation’s success stories? How can you demonstrate progress in your approach to climate and sustainability? Once you’ve identified what these opportunities are – tell those stories.
- Integrity matters: Attempts at ‘greenwashing’ or ‘self-congratulations’ will do more harm than good in 2021. Tell genuine stories and communicate openly and honestly about what your organisation is doing and why.
2021 is the year when silence will no longer be a sustainable communication strategy when it comes to climate. The organisations that commit to sustainable action and communicate what they are doing and why, are the ones that will be positioned strongly for the future.