29 April 2021

Post-Covid, all eyes will be on climate and business

For our review Behind the Bylines, we asked journalist friends of the agency for their thoughts on how the country will move forward in 2021. Here, Nick Easen leading specialist in the tech, telecoms and sustainability space and regular contributor to Special Reports in the Times published by Raconteur, reflects on the momentum building behind efforts to tackle climate change.

It's easy to think that when the pandemic subsides it'll be business as usual again, it won't. The C-word will be replaced by another - climate. This year will be a defining moment, not just for global climate policy, but how businesses, economies and many nation's body politic are aligned with the race to net zero; crystalised when the UK hosts the landmark UN COP26 climate summit in November.

The word from the recent World Economic Forum's virtual Davos event this year is that there's increasing momentum building when it comes to tackling our ailing planet. There are hopes that the same single-minded determination, money and collaboration that has driven humanity to tackle Covid-19 will be metered out on addressing climate change.

The new Biden administration rejoining the Paris Climate Accord is a shot in the arm for this movement. But more importantly there's a growing realisation that there must be a hard push to slash emissions in the next decade, not extend timelines to 2050.

What's changed recently, which has implications for corporations, innovation and economies across the globe is that the money men are now in on the act from the City of London to Wall Street. ESG - environmental, social and corporate governance issues are now centre stage, not just a nice addendum on a quarterly earnings report.

"The climate transition presents a historic investment opportunity," were the words in Larry Fink's recent annual letter. The CEO of Blackrock, with trillions of dollars under management, is putting his weight behind the global sustainability movement.

He goes on to write, "there is no company whose business model won't be profoundly affected by the transition to a net zero economy."

Demands for change aren't just coming from Greta Thunberg, Extinction Rebellion or teenagers marching on Whitehall, but from shareholders, investors and fund managers. Climate change may be an existential or moral threat, but when it hits the bottom line of business or causes investments to dry up, then the shift will be quick, just ask the fossil fuel energy giants.

The Chancellor, Rishi Sunak, sees the writing on the wall. He wants the UK and the City to be a leader in green finance in a post Brexit, global Britain.

Why? Because this is where the global money is piling up. And by pushing the economy towards net zero emissions quicker than most economies, the influx of potential investments moving into domestic UK initiatives could be huge. The Prime Minister, Boris Johnson gets it too. Listen to his language on build back better and greener.

So, for most economic sectors, many businesses, and a sizeable cohort of executives, ESG is likely to muscle in big on the c-suite agenda this year. Companies may look to aim for net-zero, or they'll look to tackle emissions, their supply chains and their business models. Already over 1,500 companies, representing £8.6 trillion in revenue have. Every innovation, investment and action counts, not just as a PR exercise to make consumers feel good, because doing nothing won't be an option in 2021.