INSIGHT

According to the latest IPCC report, climate breakdown is progressing faster than expected with the UN secretary-general calling it a ‘code red for humanity’, signalling the need for immediate action from governments and businesses.

 

64% of consumers agree that climate change is a global emergency, making genuine CSR efforts imperative. For 81% of UK consumers, it's important that the brands they buy from have a positive impact on the environment.

 

At the same time, some of the world’s largest companies have been found to exaggerate their ‘net zero’ and ‘carbon neutral’ claims just this year.

 

But the impact and incentives for businesses are significant:

McKinsey’s analysis of a diverse equity portfolio showed, without taking mitigating action, climate risks could reduce annual returns by 40%.

A strong environmental, social and governance proposition, on the other hand, is linked to higher equity returns.

 

With increasing government regulation addressing the authenticity of climate disclosures to accelerate decarbonisation and adaptation, companies will face greater scrutiny of their impact and commitments – from regulators, competitors, and consumers alike.

STRATEGY

Progressively, brands are striving to implement truly meaningful CSR programmes and sustainability initiatives.

 

Some are forming cross-industry partnerships, like payment software provider Stripe, which has partnered with multiple carbon removal technology start-ups for its Stripe Climate product, and e-commerce platform Shopify, which is investing $5M annually in emerging technologies across 10 industries to ‘kick start the carbon removal market’.

 

Others are filling the data gap for consumers where other companies fail to provide transparency – Doconomy’s mobile banking service provides users with the CO2 and water footprint of their transactions and lets them set ‘spending’ limits which encourages ‘a more sustainable lifestyle’.

 

This is reflective of a bigger shift towards climate technology, which saw investment of $60 billion in H1 2021, according to PwC.

 

But mitigating previous carbon emissions is no longer enough as brands, like Ganni, move away from offsetting and embrace ‘insetting’ – looking at its supply chain and investing in reduction of emissions and waste.

 

Focusing more on ethics, Chloé’s open-source, social impact measuring tool, which assesses working conditions of its supply chain against gender equality, living wage, diversity and inclusion, training, well-being and job quality, intends to inspire virtuous decision-making throughout the fashion industry.  

DESIGN

With real estate linked to 39% of global emissions, the climate transition period, during which consumers will physically feel the impact of climate change and businesses will face increasing pressure to decarbonise, will be a pivotal interval for the real-estate industry.

 

Design and re-design will play a crucial part in developing more sustainable spaces.

 

Sara Kulturhus Centre – a Swedish mixed-use development including a hotel, museum, library, gallery, and theatre – was constructed from local raw materials, predominantly wood, and uses renewable energy that can be shared with neighbouring areas.

 

Habitas builds lower impact resorts with a small footprint using 3D printing technology and modular design for a more efficient construction process.

 

But re-evaluating and transforming existing spaces is just as important as creating new ones.

 

room2 claims to be the world’s first net zero ‘ho(me)tel’ and is 89% more energy efficient than typical UK hotels.

 

Hotel Marcel in Connecticut is a former Marcel Breuer-designed office block that has been transformed into the first Passive House Certified and net-zero energy hotel in the US.