In 2019 Environment Tobago in association with the Tobago House of Assembly, the Environmental Research Institute of Charlotteville [with funding from the German Republic and ®Shell Trinidad and Tobago] convened the Tobago Environmental Conference with intentions to improve the sustainable business practice. The conference centered on Environment and Social Governance practice, or ESG. Triple Bottomline thinking (TBL) is a simpler way to visualise ESG - linking environmental care, awareness of matters social and governance into a package that “meet the needs of the present without compromising the ability of future generations to meet their own needs.”.
The TBL framework turns the capitalistic profit and loss “bottom line” model on its head. It states that there are two additional sustainability bottom lines due for accounting: namely social and environmental impact.
TBL catalysed a new industry — based on sustainability. Namely certification programs for companies to better market (sell?) their ethical business practices and ingredients to consumers.Moreso TBL leveraged competitive advantage by differentiating ‘responsible’ products from dirty ones. Subjective? But a step toward lowering emission nevertheless.
Popular examples of these certification schemes include Fairtrade and Certified B Corporation. In addition, consumer interest is driving an explosion in the sector. The Ecolabel Index has tracked 456 distinct certifications, with the sustainability industry totalling around $1 billion in annual revenues. Looking forward, some projections forecast that sustainability market opportunities will top $12 trillion by 2030.
The growth of sustainability and social responsibility in business is exciting, but is it enough? Here are some ways businesses would want to view climate action going foward:
1. Treat climate change as a real risk.
For the first time in its 10-year outlook, the World Economic Forum’s Global Risk Report found that the top five global risks to well-being and prosperity are all environmental. These include the risk of more extreme weather events - which cause major damage to property, infrastructure and also loss of life. “There is mounting pressure on companies from investors, regulators, customers, and employees to demonstrate their resilience to rising climate volatility,” said John Drzik, the chairman of Marsh & McLennan insights, one of the report authors.
Companies can’t afford to ignore the science, which shows that climate change is causing weather events to become more unpredictable. A recent study found that a group of the world’s biggest companies have valued the climate risks to their businesses at almost $1 trillion — with many impacts like flooding, extreme heat, drought, and more, likely to hit within the next five years.
Business leaders need to build in that risk across their plans now, so that their companies, employees — and the communities that rely on them — can stay strong and resilient. For example, Danone, a global food company, whose operations are dependent on water, warns of water scarcity risks influenced by climate change. Concomitantly, the company is taking steps to reduce water consumption across operations.
2. Invest in a carbon neutral future.
To limit global warming to 1.5°C, a target that averts the worst climate impacts according to the IPCC, we must halve emissions by 2030 and be carbon neutral by 2050 (meaning that we are releasing no more emissions than we are absorbing). This is the challenge that both policymakers and business leaders must meet through coordinated action on the Paris Climate Agreement.
There is a hurdle: A central part of achieving carbon neutrality by 2050 is transforming our energy systems to run on cleaner sources like solar and wind energy. However, investments in renewables is far below where it needs to be. According to the IPCC, annual investment of $2.4 trillion is needed in the energy sector alone until 2035 to meet our climate goals, but global investment while climbing still remains expensive and in short supply - according to the IEA^[ (2024) World Energy Investment 2024, IEA, Paris https://www.iea.org/reports/world-energy-investment-2024]
Investment in clean energy has a long way to go, but there are promising signs: More and more big companies are committing to carbon neutrality and some are going even further. Microsoft recently announced it will be carbon-negative by 2030, meaning it’ll be removing more carbon than it emits by that time.
In December 2024, more investors joined the Net-Zero Asset-Owner Alliance, an initiative launched at the 2019 UN Climate Action Summit aimed at getting investors to move to carbon-neutral portfolios. The group’s total assets under management are now at $9.5 trillion.
In his widely read annual letter, BlackRock CEO Larry Fink, who runs the largest asset management company, with $7 trillion in assets, singled out climate change as the defining factor in investment. “Climate risk is investment risk,” he warned CEOs. “…we believe that sustainable investing is the strongest foundation for client portfolios going forward.”
Activists are increasingly pressuring businesses and investors to divest from fossil fuels see our own fledgling start. The clean energy shift is a double-win for the planet and for business, but it will require efforts to shift capital now. As the new UN Special Envoy for Climate Action and Finance, Mark Carney, urged leaders in a relatively recent interview, “A question for every company, every financial institution, every asset manager, pension fund or insurer: what’s your plan?” The year 2025 needs to be the one in which business leaders answer that question for carbon neutrality.
3. Nurture nature.
While countries and businesses shift plans to align with the Paris Agreement, we can’t leave nature behind in the process. Our planet is facing another global crisis intertwined with the climate crisis: biodiversity loss. An estimated 1 million plants and animals are threatened by extinction.
Four years ago, one of the most biodiverse ecosystems on Earth, the Amazon, made headlines when swathes of it went up in flames — a disaster caused by human activity likely linked to deforestation. Scientists, such as the UN Foundation’s Senior Fellow Dr. Thomas Lovejoy, warn that the Amazon is closer to a tipping point where it’ll reach an irreversible cycle of collapse known as a dieback and release massive amounts of carbon.
What can business do to avert this calamity? Agriculture is the largest contributor to biodiversity loss, and it also drives about one-quarter of global emissions. Food and agriculture companies have an obligation to manage land and supply chains with biodiversity in mind. One step businesses can take: joining the One Planet Business for Biodiversity, a coalition of 19 food and agribusiness companies focused on eliminating deforestation, preserving biodiversity, restoring natural ecosystems, and encouraging regenerative agriculture. For example, Nestlé, the world’s largest food and beverage company, committed to ending deforestation in their supply chains this year and will use satellites to monitor changes to forest cover.
4. Prepare to be held accountable.
Some time ago the Edelman Trust Barometer found that 74% of people around the world want CEOs to take the lead on change instead of waiting for governments. Further, 73% think it’s important for CEOs to speak out about climate change in particular. With public trust on their side, business leaders have an incredible opportunity to take meaningful action and close crucial financing gaps. The world needs more climate champions in the private sector to make the case that acting on the climate crisis makes good business sense, especially in such times of political divisiveness. And they need to actually do it and not just talk the talk. Like Greta Thunberg said at COP25 in Madrid, “The real danger is when politicians and CEOs are making it look like real action is happening when in fact almost nothing is being done apart from clever accounting and creative PR.”
There are many other ways businesses must lead change on climate action and the SDGs as we embark upon the final run to deliver the SDGs. Initiatives like the World Benchmarking Alliance, which develops guidelines for companies to measure their own actions, and who launched a list of the 2000 companies with the greatest influence on global SDG progress, can help with tracking and accountability. We know what’s at stake: Inaction on climate change will, among so many things, undo hard-earned progress on global health, poverty, life on land, life below water, and far more — while sustainable economic growth will deliver progress across the board. As UN Secretary-General António Guterres said at COP25, “We are a very long way behind but there is still reason to believe we can win this race.”
Most immediately, leaders in the private sector will have opportunities to accelerate action. It’s on all of us too, to keep using our voices, our votes and our actions to push businesses and governments to do more. Ultimately, to make the world better, we all need to invest in a better world. Think ESG, action your triple bottom line.
Author’s note
This post is heavily influenced by articles from the World Economic Forum and the World Energy Investment websites. (..Copied, pasted and lightly edited for relevance - Bertrand Bhikarry)