Change is coming to business

Read Time:3 Minute, 46 Second


From high-profile figures such as Greta Thunberg to events like the COP26 summit, discussions about sustainability, the environment and climate change are perhaps more visible than ever before.

As the 2020s progress, corporations around the world are attempting to burnish their sustainability credentials by announcing net-zero goals and plans to reduce the environmental footprint of their operations.

While there is a significant degree of skepticism about many of the sustainability-related claims businesses make — concrete details are often hard to come by and the dates for achieving these targets are sometimes decades away — the fact they are making them at all is instructive, pointing to a shift in the mindset of some investors.

During a recent panel discussion chaired by CNBC’s Steve Sedgwick, Judy Kuszewski, chief executive of sustainability consultancy Sancroft International, spoke to the above point.

“One of the most exciting and most, perhaps, unexpected developments that we’ve seen in the last couple of years or so is that climate change is actually a topic that investors are looking carefully at right now,” she said.

They were “really asking questions about the company’s strategy and their future fitness to … deal with the inevitable changes that are ahead of us,” she said.

Examples of investors focusing on topics such as climate change, sustainability and the environment include Follow This, a Dutch organization which describes itself as “a group of responsible shareholders in oil and gas companies.”

Slowly but surely, the effect of such groups is starting to be felt in boardrooms. In May 2021, for example, Chevron shareholders voted in favor of a proposal put forward by Follow This to “encourage” the oil giant to cut its emissions.

The same month also saw ConocoPhillips and Phillips66 shareholders vote for similar proposals advanced by Follow This.

Read more about clean energy from CNBC Pro

Another member of CNBC’s panel, Jos Delbeke, sought to highlight how attitudes were changing in the wake of 2015’s Paris Agreement, a landmark deal which seeks to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.”

Delbeke, who is the former director-general for climate action at the European Commission, said: “I think that the pressure that originally came towards the public authorities has now, since Paris, gradually widened … to involve the private sector and in particular … dealing with risk and looking for opportunities.”

There was a lot of work ahead of us, said Delbeke, who also holds the position of European Investment Bank climate chair at the European University Institute.

He went on to note how the general public was “very wary of greenwashing,” a term which environmental organization Greenpeace UK calls a “PR tactic” used “to make a company or product appear environmentally friendly without meaningfully reducing its environmental impact.”

For Delbeke, capitalizing on the moment was key. “We have this trust that is now being expressed towards the public and the private sector,” he said.

This needed to be nurtured, he argued, going on to acknowledge that greenwashing might provoke a backlash. “I think that is a lot of what is at stake here: that companies going for net-zero can … demonstrate, in a very credible manner , that they are going to net-zero,” he said.

Referencing the European Union’s emissions trading system, Delbeke said that “the monitoring and the compliance was terribly important to create … trust in the system.”

“It’s good to have a concept of putting a price on carbon but … ‘is it credibly done?’ is what the general public is asking.”

During the discussion, Sancroft International’s Kuszewski hammered home the point that while uniform standards for measuring companies’ performance existed, they weren’t being consistently applied.

“There isn’t really a need for new standards,” she said. “There’s a need for consistent application of the standards that we already have, whether those are around sustainability reporting and indicators — far and away the most used one is the Global Reporting Initiative, which is used by 10,000 companies annually.”

The GRI, Kuszewski explained, incorporated the Greenhouse Gas Protocol, which in turn defined Scope 1, 2 and 3 emissions. These refer to direct greenhouse gas emissions; GHG related to the production of electricity bought and used by a firm; and all remaining ” indirect” GHG.

“There is good agreement across the landscape about what the … frameworks and the measurement protocols should be,” Kuszewski said. “It’s about application.”


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