As the world shifts its focus towards achieving a decarbonised society, every sector is under scrutiny to adapt and contribute to sustainable practices. The telecoms industry is no exception. Recent research, including insights from esteemed scientific organisations, highlights the intricate relationship between climate change and the telecoms sector, shedding light on both the vulnerabilities and opportunities that lie ahead.
Climate Change impacts
The Intergovernmental Panel on Climate Change (IPCC) warns that rising global temperatures can have far-reaching effects on various industries, including the telecoms sector. Increased wear and tear on infrastructure due to extreme weather events and rising sea levels pose significant threats. Severe weather can disrupt communication networks and services, potentially leading to prolonged outages and hindering emergency response efforts.
Transition to a decarbonised society
Scientific organisations like the World Resources Institute emphasise the importance of reducing greenhouse gas emissions across industries. Telecom companies are taking proactive steps to contribute to this goal. AT&T, for instance, has committed to achieving carbon neutrality by 2035 and aims to utilise renewable energy sources for 100% of its operations. Similarly, Vodafone has pledged to cut its carbon emissions in half by 2025 through energy-efficient technologies and renewable energy investments.
Leveraging technology for Sustainability
Telecom giants are leveraging technology to drive sustainability and resilience. The World Economic Forum highlights the transformative potential of 5G networks in reducing energy consumption. These networks not only offer faster communication but also consume significantly less energy compared to previous generations, thus contributing to lower carbon emissions.
Furthermore, the Internet of Things (IoT) is revolutionising industries by enabling data-driven decision-making. Organisations like the European Environment Agency emphasise the role of IoT in optimising resource usage. In agriculture, IoT sensors provide real-time data on soil conditions, enabling precise irrigation and reducing water waste.
By drawing insights from scientific organisations such as the IPCC, the World Resources Institute, and the World Economic Forum, the industry is proactively working towards a decarbonised future. Through innovative technologies like 5G and IoT, telecom companies are not only reducing their carbon footprint but also enhancing their ability to withstand climate-related disruptions. As these efforts unfold, the telecoms sector has the opportunity to progress with resilience on their sustainability journey, setting a precedent for other industries to follow.
Author: Nicola Stopps, CEO & Founder
The rise of environmental claims
As more and more consumers become aware of climate risks and try to adopt more sustainable practices, businesses are sensing an opportunity to tap into the green market. With this comes the danger of unsubstantiated claims about products and services, leading to consumers believing that a company’s products and services are ‘environmentally friendly’. In the UK alone, 72% of consumers consider sustainability in purchasing decisions.1 However, as environmental claims by businesses become more prevalent, so do instances of greenwashing. The good news is that governments are becoming increasingly aware of this trend and beginning to crack down. But, we may be seeing a shift from one extreme to the other; some businesses are beginning to practice a new phenomenon known as green-hushing.
Greenwashing vs green-hushing
Greenwashing occurs when businesses provide consumers or investors with misleading information about the environmental impact of their operations.2 By exploiting consumers’ genuine ethical concerns, greenwashing impact a consumer’s ability to make a sound, environmentally friendly decision – generating confusion, scepticism and increased perceived risks around ‘green products’. Due to public and regulatory backlash against greenwashing, instances of green-hushing have become more frequent. Green-hushing occurs when businesses do not publish details of their climate targets to avoid scrutiny and allegations of greenwashing.3
In order to avoid greenwashing or green-hushing, businesses must ensure that the claims they make are accurate, unbiased, and supported by robust evidence. Legislation in both the United Kingdom and the European Union can guide businesses aiming to take the necessary precautions.
Greenwashing and the regulatory landscape
UK Green Claims Code
In September 2021, the UK government launched the Green Claims Code (GCC). The principles of the GCC are designed to highlight the standards businesses must adhere to when making claims about their environmental impacts.
The code enforces new guidance on misleading and socially irresponsible environmental claims. By delivering clear and explicit instructions, the code covers the entire lifecycle of a product, service, process, or brand. Beyond the legal penalties for failing to comply, neglecting these six principles risks separating a company from its customer base. As public opinion and expectations rapidly evolve, a company’s reputation is increasingly exposed to this danger. Over 12 months, for example, the Advertising Standards Authority (ASA) found 16 advertising campaigns had either exaggerated their company’s green credentials or made unsubstantiated environmental claims.4 These breaches were widely publicised, severely impacting the businesses’ reputations.
As trust in green claims is fragile, the Green Claims Code is a welcomed intervention that will play a vital role in levelling the playing field. Businesses that have been working to mitigate their social and environmental impact – with data to support – will see the code as a golden opportunity to gain commercial advantage and improved performance.
EU Green Claims Directive
The EU is following a similar approach to the UK. In March 2023, the Commission adopted a proposal for a Directive on Green Claims. The proposal on green claims aims to:5
- Make green claims reliable
- Protect consumers from greenwashing
- Contribute to creating a circular and green EU economy by enabling consumers to make informed purchasing decisions
- Help establish a level playing field regarding the environmental performance of products.
To ensure that aims are met, the Directive will set out criteria on how companies should prove their environmental claims, requirements for claims to be verified and enhanced governance on labelling schemes. Although the Directive still needs to be approved by the European Parliament, its significance is paramount and emphasises the need for increased transparency. It is recommended that businesses keep a watching brief on the proposal as it will likely significantly impact current practices.
How does Simply Sustainable support businesses in getting their environmental claims right?
Simply Sustainable recognises the increasing complexity of abiding by environmental rules and regulations. These are particularly difficult to navigate when faced with large and often elusive supply chains, alongside time and resource constraints.
At Simply Sustainable, we encourage transparency in all business publications and disclosures and are adept at guiding businesses to comply with existing obligations on environmental claims. In particular, we ensure that reporting and communications are aligned with the latest environmental regulations and best practice frameworks.
Author: Lauren Hyatt, Senior Consultant
It is vital to understand where you are setting off from, before embarking on your net-zero journey.
Like all targets, net-zero targets point to where you need to get to, from your current baseline and by when. There are various ways of creating carbon reduction targets and it is good to see that we have finally moved on from picking nice-sounding round numbers that worked well together (e.g. 20% reduction by 2020 or 30% by 2030). Today, most targets are being set in-line with what the science is telling us is needed to avoid the worst effects of climate change. Targets in line with climate science, AKA science-based targets.
Before embarking on your net-zero journey, it is vital to consider why you are setting your target and how you want to communicate your goals. What is the scope of the target? Is it for one company, a group-wide target or country specific? This will impact the approach you need to take, particularly the first step in your net-zero journey; measuring your carbon footprint.
Step 1: Understand your current emissions
Every company’s net-zero journey will be different, but they all start in the same place; understanding the baseline carbon footprint.
To establish a resilient and comprehensive net-zero target, it is important to ensure that you include all relevant emissions categories in your baseline carbon footprint. Whilst some net-zero frameworks, such as the Science Based Targets initiative (SBTi), don’t require 100% of your footprint to be covered in your target, it is important to begin with a full picture of your footprint and association carbon hotspots. For the purposes of SBTi, your baseline year must be no earlier than 2019 and ideally should be your most recent year.
Our advice would be to follow best practice emissions reporting standards (e.g. Greenhouse Gas Protocol Accounting and Reporting Standard [2004:2015], ISO 14064-1, SBTi Corporate Net-Zero Standard ). This will not only ensure that you have a solid baseline but will also mean that you can use the data collected for other reporting requirements (such as SECR, TCFD and CSRD). Following best practice standards will also assure that you are audit ready, should someone come knocking!
All six greenhouse gasses covered under the GHG Protocol should be included in your footprint and emissions from across the entire value chain should be incorporated. This includes emissions produced by a company’s own processes (Scope 1), purchased electricity and heat (Scope 2) and those by suppliers and end-users (Scope 3). For more information on emission scopes see the diagram below and this Simple Guide to Scope 3 Emissions by Styze Dijkstra, Simply Sustainable’s Netherlands Country Manager.
Step 2: Hotspot analysis
Analysing the biggest areas of opportunity and risk in relation to decarbonisation.
Emissions hotspots are areas within your business operations and supply chain that have the greatest carbon impact, and as such, offer the greatest opportunity to drive reductions in your carbon footprint. Before setting carbon reduction or net-zero targets it is important to understand your hotspots and understand how these will be impacted by any areas of significant change or growth within your business.
Step 3: Internal buy-in
Getting buy-in at board level is key to the success of your net-zero strategy.
One common mistake is organisations signing-up to sustainability targets and commitments without fully understanding the implications on their business, or how to achieve their commitments. This does not mean that you need to know the exact actions you will be required to take to achieve net-zero, but it does mean that you need to understand the scale of the challenge ahead, before committing. This is not only important for gaining buy-in internally but can also carry a reputational risk. In the first five years after launching, SBTi expelled 119 companies from the initiative after failing to submit climate targets within two years of committing.
Getting buy-in at board level is key to the success of your net-zero strategy, this will not only help your board to increase its carbon literacy but will also help to drive action when it comes to the decarbonisation required to meet your net-zero commitment.
Step 4: Committing to your net-zero journey
Publicly committing to your net-zero journey will help keep momentum and drive action.
Publicly committing to set a net-zero target is not mandatory, but something that is encouraged by the SBTi. This can be done informally through your own internal and external communications, or more formally though submitting a commitment letter to SBTi. If going through the formal SBTi process, you have 24 months to submit your target after signing your commitment letter.
Next in the net-zero series
This is part 2 of a series of insights into net-zero. The next article in our series will cover how to calculate your net-zero target, how to ensure it’s in line with the science and making sure you are setting the right level of ambition, whilst ensuring your target is achievable.
Author: Henry Unwin, Head of Climate and Carbon Services
- What is net-zero and why is it important?
- How to approach setting a net-zero target (baseline carbon footprinting and understanding)
- Ensuring your target is robust, ambitious and in line with the science on climate change
- Integrating and communicating your net-zero target
The Carbon Disclosure Project, informally known as CDP, has emerged as a critical global platform, holding the largest environmental database in the world. The platform primarily facilitates transparent reporting and disclosure to drive sustainable practices across industries. With approximately 20,000 organisations disclosing data on climate change, water security and deforestation issues via CDP, 2022 set a new milestone for disclosure – a 38% increase since 2021 – including listed companies worth US$60.8 trillion (half of the global market capitalisation)1.
Over time, the platform has evolved to reflect the most recent climate science and global policy developments. The 2015 Paris Agreement marked a turning point in the global response to climate change, demonstrating that ‘business as usual’ is no longer sufficient.
CDP’s primary objective is encouraging organisations and cities to reduce greenhouse gas (GHG) emissions, protect water resources and preserve forests. CDP accomplishes this by offering a solid and standardised platform for organisations to voluntarily report their environmental data annually.
The structure of the CDP climate change questionnaire was redesigned in recent years in response to market needs and trends in corporate climate change reporting. Revisions included an increased emphasis on forward-looking metrics, improved alignment with other reporting frameworks and the integration of sector-specific questions.
Significance in climate change mitigation
CDP promotes transparency and accountability by pushing organisations to measure and report their carbon emissions and climate-related data. This incentivises implementing comprehensive sustainability policies, whilst providing stakeholders with crucial information for informed decision-making. Beyond corporate boundaries, CDP allows investors to assess the climate risks and opportunities associated with their portfolios, ultimately promoting a shift towards greener investments2. This harmonisation will help to optimise reporting and accelerate the generation of decision-useful information.
CDP also aligns with other large initiatives, facilitating benchmarking and amplifying the impact of sustainability strategies, addressing interconnected challenges and leveraging expertise and best practices.
CDP in 2023
Developments in 2023 reflect CDP’s strategic priorities to track organisations’ alignment with a 1.5°C world, which include enhancing disclosure, governance, engagement, emissions accounting, carbon credits and carbon pricing.
Respondents are asked whether their spending and revenue is aligned with sustainable finance taxonomies to add credibility to their commitment to mitigate and adapt to climate change.
In alignment with the International Union for the Conservation of Nature’s (IUCN) Corporate Reporting on Biodiversity Guidelines, respondents are required to report on the approach to maintaining and addressing concerns associated with having activities located in or near biodiversity-sensitive areas.
Respondents are also requested to provide emissions data for subsidiaries, which includes a breakdown of their Scopes 1 and 2. As other regulatory frameworks and standards increase their scrutiny around emissions reporting, organisations are encouraged to consider subsidiary emissions, which can represent a significant gap in terms of unassessed climate risks and opportunities.
CDP has emerged as a vital catalyst in the fight against climate change. CDP is transforming corporate behaviour, empowering organisations to embrace sustainability practices and mitigating the adverse effects of climate change.
Author: Maria Serrano, Climate and Carbon Consultant
ESG and sustainability strategy
Environmental, Social and Governance (ESG) and sustainability strategies in businesses have changed radically in the last 5 years. With the increase in stakeholder expectations, companies are now finding their strategies are not meeting current requirements and are needing an update.
In the past, sustainability and Corporate Social Responsibility (CSR) strategies were considered an addition, a bolt-on to a business’s commercial strategy. In recent years, there has been a significant acknowledgement by stakeholders, regulators and the financial sector of the direct and indirect financial impact of ESG and sustainability and issues. This has been set out in the recent European Corporate Sustainability Reporting Directive (CSRD) and Task Force on Climate-related Financial Disclosures (TCFD).
Businesses are now looking to ensure their ESG and sustainability strategies are entirely intertwined with their commercial strategies and to maximise commercial opportunities and minimise financial and stakeholder risk. This often means using the old-fashioned approach of focus areas being people, planet, community – a box-ticking exercise – is now too simplistic. Rather companies are now developing strategies which are more sophisticated, tailored and refined to their specific needs, with a focus on the financial opportunities and alignment to the commercial strategy.
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We are living on borrowed resources
As things stand, we are utilising resources that do not belong to us. As of today, 19 May 2023, we have consumed all the UK can regenerate in a year. This comes when we are only 138 days through the year, with just under two-thirds remaining. Today is our Overshoot Day.
The UK has a biocapacity per capita of 0.56 gha/person, whilst the average UK resident has the 9th highest ecological footprint in the world, equalling 7.93 gha/person. We overconsume the Earth’s resources at a rate of 7.37 gha/person, a rate that the UK biocapacity cannot regenerate at – to achieve this, we would need 4.1 UK’s. But this does not just affect the UK, if every person in the world was to live like UK residents, we would need 2.6 Earths worth of resources.
The UK economy is heavily reliant on its resources, with the utilised agricultural area (UAA) totalling 17.6 million hectares in 2022, accounting for around 71% of the total land size. Whilst the use of natural resources for the purposes of agriculture only equates to 0.68% of the UK’s GDP, the larger sectors such as manufacturing and services are also at risk. Analysis conducted by Natural Capital Finance Alliance using ENCORE shows that there is potential high dependency on natural capital over 74% of the FTSE All-Share index sectors.
How can we solve this?
To reach a sustainable level of consumption by the year 2050, we would need to shift the date back 8 days per annum to achieve an Earth Overshoot Day of 31 December 2050. But how can you as a business help to do this?
Humanity’s ecological footprint is predominantly composed of carbon emissions, which account for 60% of our overall impact on the planet. Decarbonisation represents the most effective strategy for restoring balance between our ecological footprint and the planet’s renewable resources whilst simultaneously mitigating climate change. If we manage to cut down the carbon emissions that contribute to humanity’s ecological footprint by 50%, it would shift the UK’s Earth Overshoot Day by over three months, or 93 days.
By implementing readily available and commercially viable energy-efficiency technologies in buildings, industrial processes and electricity production, we could shift Overshoot Day by a minimum of 21 days, without compromising on productivity or comfort.
Addressing the ecological debt crisis is not a task that can be accomplished overnight. Fortunately, viable solutions are already available and have been effectively implemented. The need of the hour is to swiftly scale up their implementation.
Author: Harry Freeman, Consultant
All too often, people delve into the detail of net-zero before looking at the bigger picture and how net-zero target setting began.
Ever since COP21, better known as the Paris Climate Change Agreement in 2016, we have seen many businesses and countries committing to reduce their emissions and announcing net-zero target dates. This has been incredibly encouraging, but it is also important that these targets are both robust and ambitious (something we will come onto later in our net-zero insights series).
The message from COP21 in Paris and from the IPCC since then has been crystal clear. The science on climate change is telling us that we must rapidly reduce greenhouse gas emissions globally by 45% by 2030 and to net-zero by 2050. If we do not do this, we have no chance of keeping global warming to within 1.5°C.
The significance of 1.5°C
This 1.5°C figure is vitally important. It is a figure that is often used but not always understood. If the average global temperature increases by more than 1.5°C from pre-industrial levels (set at an 1850-1900 average baseline), then we will see increasingly catastrophic consequences of climate change. Even at 1.5°C warming we will see significant impacts on our planet. If we exceed this target by just half a degree, the results will be dramatic: ice-free arctic summers will increase 10-fold, double the number of vertebrates and plants will lose their habitats, as will triple the number of insects1. We will lose a shocking 99% of our coral reefs and almost 40% of the global population will be exposed to extreme heat at least once every five years.
These are significant impacts and we must act now if we are to avoid them. Worryingly, we have already seen an average increase in temperatures of 1.1°C. These increases in temperature are directly related to the amount of carbon and other greenhouse gasses (GHGs) that humans emit into the atmosphere. It is these GHG emissions that we must reduce by 45% by 2030 and to net-zero by 2050, at the latest.
What does net-zero actually mean?
Net-zero emissions are achieved when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a period of time2.
Put more simply, what goes up must come down. However, what is often missed when looking at net-zero is that it is not as simple as balancing carbon emissions with carbon removals/offsets. Robust methodologies for achieving net-zero (again, something we will come to later in our net-zero insights series) require significant reductions in absolute emissions (up to 95%) before balancing out the rest with removals/offsets. We need rapid and deep decarbonisation, not just the balancing of emissions.
It can be easy to feel down when we look at figures on carbon emissions and the impacts of climate change. However, there are real reasons to be optimistic, and throughout this series of insights we hope to shine light on the positive solutions required to create a brighter, sustainable future for all.
In May we will cover how to approach setting a robust net-zero target. To receive the next insight in this net-zero series, as well as other insights on ESG and sustainability, sign up to our newsletter at the bottom of this page.
Author: Henry Unwin, Head of Carbon and Climate Services
Net-zero is a vast topic and one that is impossible to cover in any depth in just one insight. Therefore, over the forthcoming months we will be publishing a series of insights on net-zero, positively looking at the following:
- What is net-zero and why is it important?
- How to approach setting a net-zero target (baseline carbon footprinting and understanding)
- Ensuring your target is robust, ambitious and in line with the science on climate change
- Integrating and communicating your net-zero target
Reporting for a new era
Simply Sustainable has been providing best practice guidance in ESG and sustainability reporting for over 12 years. We predict that 2023 will be the year that robust and credible nonfinancial reporting becomes the expected norm for global business.
In short, this is down to new Environmental, Social and Governance (ESG) and sustainability reporting requirements in the United Kingdom, the European Union and the United States that are set to fundamentally change the nonfinancial reporting landscape.
The Corporate Sustainability Reporting Directive (CSRD) is a new set of EU rules that will require ESG reporting on a level never seen before, capturing a whole host of companies that previously were not subject to mandatory nonfinancial reporting requirements, including public and private non-EU companies that meet certain EU-presence thresholds.
For US issuers, the new EU rules will result in mandatory reporting on a broader set of ESG topics than those required under current and proposed Securities and Exchange Commission (SEC) rules. It is important that the business community does not ignore the approaching tide of regulation on sustainability reporting that could entail significant financial and reputational damage if overlooked.
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Simply Sustainable’s Amsterdam office kicked off 2023 with our first sustainability leaders’ roundtable meeting. The lively discussion addressed the sustainability issues that will affect businesses in Europe in 2023. We saw extensive exchange of views and experiences between peers, looking forward to a year of empowerment and change.
Sustainability Manager is a 360-degree role
The enormous momentum behind sustainability is only expected to build further in 2023. There is an increasing demand on sustainability managers to provide practical solutions. Participants told us that many colleagues – especially those from the younger generation – come to the sustainability manager proactively with ideas (big or small) and then wish to be part of the transition, as well as board members fighting to have a piece of sustainability in their remit.
This is great news. However, in many organisations, the interest and urgency of sustainability surpasses maturity and capacity.
This imbalance is most acutely felt by sustainability managers. Theirs is becoming a 360-degree role, in which they are expected to communicate and manage to colleagues upwards, sideways and downwards, and manage stakeholders all around the business. They must work strategically as well as operationally to realise their agenda. All while the scope of their work is broadening, beyond the traditional focus on environmental issues to include social and governance topics.
Why the CSRD is sexy
The EU Corporate Sustainability Reporting Directive (CSRD) has made it much easier for sustainability managers to engage people in the organisation on sustainability. Timelines for compliance are short, and the bar is high, so many in the company recognise that preparation must start today.
Participants see that colleagues are looking to them, as the sustainability manager, to translate the complexity of the CSRD into a clear, step-by-step plan for the business.
We talked about the challenges of involving and empowering internal stakeholders in the short time span for CSRD compliance. Companies run the risk of going down a narrow route to compliance, missing the value that CSRD preparation can have for future-proofing the sustainability strategy. If full focus is on gathering the data for reporting, opportunities to engage in dialogue about the strategic implications of sustainability topics and how they are best addressed may fall by the wayside.
Sustainability data is management information
Preparation for CSRD accelerates the need for comprehensive and robust measurement. While new regulatory guidelines clarify what should be measured – previously companies had to find this out for themselves – it does not make data collection and validation any easier.
Many companies have been looking for the best system for capturing and managing sustainability data. Should they choose a new Environmental, Social and Governance (ESG) tool – of which there are increasingly many available? Can the financial reporting system be extended to include sustainability data? Or are there tried and tested Environment, Health and Safety (EHS) systems that are expanding into this space? There are many solutions out there, but companies find it very hard to judge which are robust and trustworthy.
As a widely experienced sustainability consultancy, it is our view that sustainability data should be management information and not only be used for reporting. This points to an integrated solution, that brings together financial and non-financial data for informed and balanced decision making. There is a huge need, and we are actively watching this fast-moving space to best advise our clients.
Author: Sytze Dijkstra, Netherlands Country Manager, Simply Sustainable
Download Simply Sustainable’s 2023 ESG & Sustainability Trend report for an in-depth analysis of how sustainability will shape the corporate agenda this year.
If you are interested in receiving our reports or joining a future Sustainability Leaders’ roundtable, please contact us.
The Importance of Solidarity and Collaboration in the Face of Adversity
The World Economic Forum (WEF) hosted its 53rd Annual Meeting last week from the 16-20 January 2023 in Davos, Switzerland. Cultural, business, political and other leaders of society convened at the conference to discuss actions needed to resolve current global crises, from the cost-of-living crisis to climate change, but also how to prevent the reoccurrence of these issues.
The World Economic Forum Annual Meeting 2023
Founded in 1971 and headquartered in Geneva, the WEF is committed to promoting sustainable development worldwide1. Given the many environmental, social and economic emergencies the world currently faces, this year’s meeting sought to reaffirm the importance of public-private cooperation to address these problems, as well as facilitate positive, long-term systemic change. Consequently, at the heart of the meeting, there was a desire to find ways to reinstitute a collective sense of agency and to turn defensive measures into proactive, vision-driven policies and business strategies. Key heads of state and government, as well as different geopolitical and geoeconomic groups (e.g. the Country Strategy Dialogues), contributed to discussions over the course of the four-day meeting; the WEF’s foremost business communities, such as the International Business Council and the Community of Chairpersons, also gathered to engage in discussion with their peers2.
The backdrop to the 53rd Annual Meeting: the WEF Global Risks Report 2023
The WEF Global Risks Report 2023 was published in January 2023 and highlights the different areas where the world is at a critical inflection point. In its 18th edition, the results of a Global Risks Perception Survey (GRPS) are presented, which collected responses from over 1,200 experts across academia, business, civil society, government and the international community on the evolving global risks landscape in the short-term (two years) and long-term (10 years). Complementing GRPS data on global risks, the report also draws on the WEF’s Executive Opinion Survey (EOS) to identify risks that pose the most severe threat to each country over the next two years, as revealed by over 12,000 business leaders in 121 economies3.
The report revealed that energy, food, inflation and the cost-of-living crisis are considered to be the most significant global risks. The cost-of-living crisis has been ranked as the most severe global risk over the next two years, followed by natural disasters and trade and technology wars. However, failure to mitigate and adapt to climate change were ranked as the two most pressing risks over the next 10 years, with biodiversity loss and ecosystem collapse regarded as one of the most rapidly escalating global risks in the long-term. Geoeconomic confrontation, cyber insecurity, widespread cybercrime, large-scale involuntary migration and the erosion of social cohesion and societal polarisation are global risks that all feature in the top 10 over the next decade3.
A call for urgent and collective action
Despite the range of risks that are occurring simultaneously worldwide, a shift away from a focus on short-term results (i.e. “short-termism”), crises-driven mindsets and solo approaches is a strong step to effectively manage and limit their consequences. The WEF has identified four key principles that are crucial to prevent a worsening of the risks outlook3,4:
- Although risks may have short- and long-term impacts, leaders must revaluate their perception of risk and act in the shortest timeframe possible (i.e. today) to address them. In today’s risk landscape, this means leaders must collaborate now to address climate and socioeconomic issues.
- There is a need for business and governments to invest in multi-domain, cross-sector risk preparedness by building societal resilience through financial inclusion, health, care, education, and climate-resilient infrastructure.
- The abundance of crises affecting humanity and the environment has caused nations to operate in a more insular manner. Despite the importance of national preparedness, there is a fundamental need for international coordination, data sharing and knowledge exchange to deal with several global risks, such as technology governance and climate change.
- Accurate predictions of risk in terms of timescale and impact must be bolstered at a global, national and institutional level. To strengthen the ability of leaders to better understand global risks, scenario analyses, scanning multistakeholder perceptions, appointing a risks officer function, and finding data on weak signals are all valuable ways to aid leaders in this process.
What does this mean for our future?
The world is facing several sustainability challenges that present an immediate threat to humanity and nature3. Given the scale, complexity and urgency with which they need to be addressed, pessimism and a feeling of futility abounds. Nevertheless, it was clear from the WEF’s 53rd Annual Meeting that international cooperation, holistic approaches and solidarity are key to tackling and preventing sustainability crises.
Bold leadership and cohesion across country borders is needed to improve the state of the world. If we all work together now, there is good reason to feel hopeful and optimistic about the future.
Author: James Beiny, Consultant at Simply Sustainable
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