Concerns about unsustainable business practices and inertia within industries may well lead to the downfall of our carbon neutral future, says Professor Ian Thomson, Director of Lloyds Banking Group Centre for Responsible Business.
Whilst this does not account for all business in the UK, the fact of the matter is most UK business are nowhere near on track to achieving net zero targets. There are many reasons for these shortcomings but one of the most egregious is unreliable carbon accounting systems set against the backdrop of a significant gap between consumer expectations on sustainability and action taken by business.
Recent research from The University of Birmingham Business School shows a worrying mismatch between the most commonly used measures of carbon and their true impacts, meaning bogus net-zero claims are being made by businesses across the UK. This means when it comes to ‘decarbonising’ the country it can be nearly impossible to identify impactful ways forward.
Under current international carbon accounting standards, emissions from supply chains and after-sale product use and waste are excluded from calculations. This means that supermarkets selling food from more local UK farms have higher reported carbon emissions than those that import their products from overseas. It can also cause walking or cycle to work schemes for staff to add to reported carbon emissions, and nature-based solutions to be ignored altogether.
With this confusing and simply nonsensical way of measuring, or not measuring, carbon emissions and the effectiveness of sustainability initiatives, it’s no wonder there is a lack of activity from business when it comes to net zero. A recent survey commissioned by Birmingham Business School’s Lloyds Banking Group Centre for Responsible Business, facilitated by YouGov, demonstrated that an astounding 50% of senior business decision makers have no net zero strategy at all whilst 74% of British adults expect businesses to have a net zero strategy.
Further to this, there is a disproportionate focus on profitability even as the public expects a turn towards sustainability; nearly a third of senior business decision makers subscribe to the myth that success is intrinsically and exclusively linked to profitability. In contrast, 42% of the British public maintain that there should be a balance between business profits and ESG attributes.
Increasingly, consumers and investors are placing value on social and environmental justice. But as of now, few businesses are planning to take the necessary radical steps towards sustainable change. More than that, businesses seem actively unaffected by public pressure; only 7% of businesses responded that a public boycott would make them more sustainable.
Following Net Zero Week earlier this year, we must encourage all business to view sustainable practice and social justice as part of their business model and urge business and government to come together to work on more honest and effective ways of measuring carbon emissions. Sadly, 60% of small business at present do not regularly collaborate with external forces when solving complex issues – this needs to change. With a climate emergency rapidly accelerating in severity, business must view it as a collective issue, not a luxury unafforded. With social inequality skyrocketing, and time ticking forward to our 2050 net zero target, businesses must not only meet the expectations of the British public but take proactive and necessary steps to combat these issues, in turn building trust and creating long term strategies.
It has never been more crucial, or more urgent, for businesses to base their decisions on accurate, well-informed information, and the Birmingham Business School is continuing research to formulate a programme of suggested reforms that will allow for the realisation of the goals set at the United Nations’ COP26 climate talks.
If Net Zero is ever to become a viable option for the UK, it is imperative that UK businesses recognise that they hold the key to a much more sustainable future.