Protecting the environment should be a no-brainer for business leaders.
Why? Environmental business strategies aren’t just good for the environment, they’re good for business results too. These strategies lower costs and improve companies’ bottom lines. They drive new, high-growth business streams. They help companies recruit and retain the best people. And they address business risks associated with impacts of climate change.
So what can companies do to address climate change and other environmental and social challenges? Good news: a lot. Here are nine things business leaders can do right now.
1. Put One of Your Very Best People in Charge
If you don’t have a Chief Sustainability Officer yet, appoint one ASAP. But don’t stop there.
This isn’t about just putting someone in charge of your company’s environmental and social agenda. It’s about empowering that person to make that agenda a priority for your company. How?
Reporting lines are crucial here. Chief Sustainability Officers should report directly to the CEO—and their work should be accountable to the Board of Directors. The CSO’s job is to fully integrate environmental and social concerns into the company’s core business strategy. Progress won’t happen without the attention of top leadership.
The CSO should also be very knowledgeable about your business. It’s critical that he or she have the credibility and influence to drive a practices-based sustainability agenda forward.
2. Commit to Buying Clean Energy
Companies of all sizes from every sector are making the shift to clean energy. Join them.
Take Google and Apple, which recently announced they’re now powered by 100% renewable energy. Walmart and Amazon aren’t far behind.
Or look at RE100, a group of 160 influential companies that have pledged to get 100 percent of their electricity from renewable sources. These are big, commercial companies like IKEA, SwissRe, InBev, Citi, Coca-Cola, and JP Morgan Chase—not do-gooder organizations.
These companies are planning for the long haul. They want to reduce their business risks associated with impacts of climate change. Addressing these risks can uncover potential cost savings, as many learned long ago by investing in energy efficiency. Today renewable energy is producing that same double bottom line benefit—we’re quickly approaching the point where solar and wind will be cheaper than fossil fuels.
Companies also want the certainty of fixed-price energy, which can’t be delivered by natural gas or oil. And they know that investing in renewables resonates with their employees, communities, and young people they seek to recruit. It’s just smart business.
3. Commit to Transparency
If you haven’t already, commit to greater transparency around the risks that climate change poses to your business.
Initiatives like the Carbon Disclosure Project (CDP) and the Financial Stability Board’s Task Force on Climate-Related Financial Disclosure (TCFD) can help you measure, manage and report on your company’s environmental impacts. So far, more than 280 global investors and corporations managing some $90 trillion of assets have committed to supporting the TCFD’s voluntary recommendations.
Business leaders can further accelerate climate progress by adopting these kinds of climate-related reporting mechanisms—and raise their voices when such reporting seems a little too good to be true.
4. Manage Your Supply Chain
Once you’ve addressed your own company’s energy footprint, consider the environmental impact of your supply chain. This is how change happens on a bigger scale.
The company realized that its supply chain offered an enormous opportunity to improve environmental performance—and inspire change at scale. In 2017, the company launched Project Gigaton, an ambitious plan to eliminate one gigaton of greenhouse emissions from its supply chain by 2030. That’s the equivalent of taking more than 211 million passenger vehicles off U.S. roads for an entire year.
How do they do it? Walmart uses their clout and buying power as one of the world’s biggest customers to influence their supply chain to adopt more environmentally friendly practices.
The lesson here: Break outside the mold. Think about new ways to incorporate sustainability into your business models and use your company’s buying power to push others to operate more sustainably. Consider joining a supply chain consortium focused on helping buyers and suppliers increase their sustainability. Or pledge to eliminate deforestation and other nature-degrading practices from your supply chain.
5. Influence Industry Associations
It’s troubling to see some business-friendly associations continue to challenge climate science and the need for climate policy—while many of their members—and some very prominent members—publicly state that they view climate change as a big threat that needs to be addressed.
If you are part of such an association, I have a suggestion: quit. Explain why you’re choosing to leave the association, and let your fellow members know too.
If you can’t quit, raise a ruckus. Urge the association to drop its dinosaur-like approaches. Explain that addressing climate risks today can help future-proof your company.
6. Push for Smart Government Policy
Smart policy is the most important lever we have to address climate change.
We need more private sector leadership pushing for a price on carbon—the policy that virtually all economists agree on as our best bet for quickly and efficiently reducing carbon emissions. By relying on market signals, a carbon price would work on the lowest-cost basis and with the least amount of government interference.
Business leaders have a loud, important voice—please use it to champion a price on carbon and other smart environmental policies. And push back when politicians mislead on climate, or when peer organizations take a backward stance.
7. Engage with Your Challengers and Detractors
If activists complain about your company, make a good faith effort to talk to them. You might be surprised by the progress that results.
Take the Amazon rainforest, for example. At the height of the soy boom a decade ago, Greenpeace attacked McDonald’s for sourcing beef linked to deforestation in the Amazon.
Instead of hitting back, McDonald’s teamed up with Greenpeace and its major supplier, Cargill. The unlikely allies worked together to ensure that Cargill’s soy was sustainably produced.
The campaign worked. Cargill committed to stop buying soy from newly deforested land. The company pushed fellow soy traders to do the same, resulting in an unprecedented agreement that has brought deforestation in the Amazon due to soy expansion nearly to a halt.
8. Don’t Try to Beat Them, Join Them
Join or support boards of responsible environmental organizations. NGOs can always benefit from a business perspective to improve operations—and you might learn a few things too. Or consider adding an environmentalist or climate scientist to your board who deal with these issues every day.
9. Use Your Bully Pulpit
It frustrates me when I hear from CEOs who say that investors don’t ask about sustainability on their quarterly earnings calls. My response: Are you waiting for them to ask? Or are you proactively telling the investing community what you’re doing? If you’re doing the latter—great.
Make it a part of your regular pitch to investors. Tell them, “Here’s what we’re doing on the environment, and here’s why it makes business sense.”
Even if this doesn’t result immediately in new investment flows, your employees and your customers will be proud of you.
The Path Forward
These nine steps aren’t just about doing good. They’re about doing better business. When business leaders take action to protect the world’s natural resources, they send a message to their employees, customers, and investors, that they are committed to a sustainable future—for the planet and for their business, too.
This article was originally published in Forbes on February 14, 2019.