Why tick-box approaches to climate change are worse than pointless

The latest Deloitte UK Energy Transition Investor Survey says although more than half (55 per cent) are highly confident the UK government will maintain its commitment to net zero, only 8 per cent are highly confident it is acting to effectively to drive the energy transition. And that could take even more of a hit depending on the influence Reform or the Conservatives have in coming years.

Then if we look at the public, a recent Understanding Scotland survey by Diffley Partnership and David Hume Institute shows the environment not featuring in the top ten local concerns. And while it does make the ranking of national issues, it’s dwarfed by worries over the cost of living and inflation. What chance the environment will feature prominently as a campaign issue in the run-up to the Holyrood elections? (It won’t.)

Meanwhile, in the world of financial services that I know well, firms are being held to an ever-higher standard on climate planning by their regulators. The latest prudential requirements coming into force in June contain expectations on transition plans. However, with only a few months until that deadline, our performance tracker of 57 banks shows only a third have developed these.

This apparent lack of commitment on all sides matters.

I was struck by a report published recently by the University of Exeter and the Institute and Faculty of Actuaries – and it’s worth noting the latter is not exactly well known for its tree-hugging tendencies. Together they have modelled the risks of climate change could reduce UK GDP by 50 per cent later this century. That level of challenge won’t be overcome through baby steps.

If we then flip to the positive, what about the commercial, economic and efficiency gains to be had from a meaningful approach to sustainability? Those wins are there to be had, but not if an organisation treats its net zero plan as a mere compliance process or a tick-box exercise.

After all, the plan is not the end; it is a means to an end and accordingly should be detailed, embedded in ‘business as usual’, and face into the dynamics actually at play in the world. A plan that only exists on paper or is based on wishful thinking, rather than being integrated into core strategy, governance and risk management, might as well not exist.

In the research we do for our annual banking barometer it is far too common to read high-level ambition statements at the expense of concrete actions and milestones. We also see environmental issues being delegated to a few technical experts, rather than boards and senior management taking clear ownership of transition planning.

This has potential consequences for reputation, strategy and access to capital among other risks. Conversely, those that get it right can enjoy greater resilience, improved investor confidence and stronger employer brands.

Half-hearted plans – whether at the level of an individual business or the entire nation – disillusion both those who have invested time and effort and those watching on. Consequently, they are worse than useless because they end up creating more barriers by discrediting the whole process. So, my advice is to be realistic, be grounded in your own business model and most importantly be genuine in your efforts.

Emma Walford, co-founder and CEO of environment and strategy consultancy Perigon Partners