Insight

Exploring the Limits of Responsible Business

By Andrew Wilson

Businesses are engaging in initiatives to address the climate crisis. But not all are pushing the boundaries and embracing real change. Is your business properly prepared to meet society’s changing expectations?

I have been working in sustainability long enough to have seen several fads and fashions come and go. I’ll even admit I bought a diesel-engined car in the early 1990s on clear scientific advice that it would emit less CO2 than a petrol model. Some years later we all came to realise there is trade-off between lower carbon and other pollutants such as dioxides, nitrogen oxides, gases and fine particles. My car might have been marginally “greener”, but it certainly wasn’t cleaner. So, forgive me for a moment if I raise a slightly sceptical eyebrow at another sustainability development, nature based solutions (NBS), which are being positioned as the answer to climate change. Undoubtedly, there are huge potential benefits from working with nature to better maintain and replenish natural resources. However, not all nature based solutions are created equal. There is a sometimes a gap between intention and outcome.

Perhaps this tension can best be illustrated with reference to two recent corporate initiatives. Both are commendable in their own right and go some way to combatting climate change. But the wider implications of each are very different.

The first example is Coca‑Cola, who recently launched a new prototype beverage bottle made from 100% plant-based plastic. The company claims this is the first time such bottles can be made using technologies that are ready for commercial scale. The bottle (excluding the cap and label) is produced using sugar from corn, removing all petroleum-based content from the bottle itself. Importantly, Coca-Cola’s goal for this plant-based plastic is to use surplus agricultural products to minimize the overall carbon footprint. In addition, Coca-Cola point out that the new plant-based bottle is fully recyclable within the current system, alongside PET-based bottles.

The second example is Shell's 'Drive carbon neutral' campaign, which is part of the company’s loyalty card system. Cardholders can opt to have their emissions offset through purchases of carbon credits. Given that the majority of emissions associated with petrol come from using the fuel once it’s in our cars (rather than getting it from the oil well to the pump) there is some merit in this initiative.

To deliver carbon neutrality, Shell purchases carbon credits equivalent to the amount of carbon emissions for the whole life cycle from drilling to driving, to offset them through Shell’s global portfolio of nature-based solutions projects. The company issues an annual verified carbon reduction certificate confirming that the fuel has been offset.

While there is a degree of win-win with both these corporate initiatives, it can be argued that there is a fundamental difference between the two.

The first, in my view, is moving towards real innovation by changing the way Coca-Cola operates. True, the company is still selling a high-priced fizzy drink, but it is making efforts to fundamentally change the sourcing and manufacturing process of a key component in its product, one that has a massive impact on the environment. Indeed, the company is going further through a trial partnership with Loop using refillable glass bottles, moving away from single-use packaging altogether.

Shell, on the other hand, could be seen to be prolonging a business as usual approach. While the company recognises that switching to electric vehicles is the best way forward (and is providing UK forecourts with 100% renewable electricity charging points), the drive carbon neutral NBS scheme quietly condones the continued use of petrol and diesel. It fails to recognise that we simply can’t off-set our way out of the climate crisis.

This brief consideration of nature based solutions as one corporate response to the climate crisis raises a substantive issue. It points to a much larger question of whether your business is properly prepared to meet society’s changing expectations.

Those companies that focus on business as usual will not fail in the short term. However, they will be under severe threat when regulators, investors and consumers start to reassess the trade-offs we are making – as I did with my car all those years ago.

In contrast, companies that are willing to innovate, to develop new ways of working and push the boundaries of responsible business will be become more resilient, more responsive and more respected. In short, they will be much better placed to prosper over the long term as we continue the transition to a more sustainable world.

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To find out how you can shape the responsible business landscape of tomorrow, please contact Andrew Wilson, Director and Head of Responsible Business at andrew.wilson@lexcomm.co.uk