2019 was the year when climate change and sustainability moved from being marginal Corporate Social Responsibility (CSR) issues to among the most important boardroom challenges facing businesses.
The next decade will see the climate change agenda fundamentally alter many aspects of society, while pressure from regulators and stakeholders will change the commercial landscape for virtually all businesses.
The evolution of this agenda is clearly presented in the recently published World Economic Forum Global Risk Report 2020 (as shown below). For the first time climate and environmental risks are listed as the top five global risk areas, edging out other significant issues such as cyber attacks and terrorism.
As business leaders contemplate their response, this paper by KPMG Ireland presents four compelling business cases, supported by evidence, which can be used by Irish businesses to support and justify action on climate and the broader sustainability agenda.
In particular we have been keen to focus on the positive opportunities decarbonisation and sustainability can bring for businesses, in contrast to the more typical risk-based narrative. From encouraging longer-term thinking, identifying market differentiation and revenue opportunities, through to attracting the right talent in an increasingly millennial-dominated workforce. The impact for individual businesses will be increasingly defined by the response they make over the formative years of this new decade.
To support our case for change, we also set out the climate policy ambitions at national and EU level which will be key drivers of change for this fast evolving topic.
Many business leaders recognise the growing body of evidence suggesting that we have reached a tipping point for climate action, yet remain unclear on how or if they should respond, with many concerned that embracing the climate change agenda may impact profitability or create a competitive disadvantage.
However this paper argues that a sustainable transition for businesses can deliver positive results for all stakeholders, and will in fact be critical to creating long-term shareholder value. Below we present KPMG’s four business cases for action on climate and sustainability and throughout the following pages we explore these cases in greater depth and with supporting evidence: