Businesses are talking about sustainability more than ever, but are they preaching it? | News | Eco-business
Over the past year or so, there has been an increase in the frequency and volume of corporate sustainability discussions, according to a report by analytics firm GlobalData.
All other businesses seem to be using a word that first appeared in the 1980s, entered boardrooms in the 1990s, became mainstream in the 2000s, and grew steadily in popularity until the epidemic of Covid-19 virus.
According to GlobalData, the number of times the word “ sustainability ” has been mentioned in annual reports, quarterly reports, earnings transcripts and investor presentations has reached all-time highs in 2020, and nowhere has the word n ‘was as commonly used as in Asia Pacific, where sustainability mentions were up 80% from 2019.
In the study of more than 20,000 companies across geographies and industries, Asian companies used the word “ sustainability ” more than 300,000 times in their business filings in 2020.
âSustainability in a corporate context has been magnified over the past year, likely in response to the Covid-19 pandemic, and Asia has been the first region to know its impact,â said Oriana Brine, Associate Director, MullenLowe Sustainability, a sustainability communications agency.
Banks are definitely talking about a great game, but for many, talking is as far as it gets.
Oriana Brine, Associate Director, MullenLowe Sustainability
Asian banks talk the most about sustainability, according to GlobalData’s findings, reflecting increasing pressure on financial institutions to disengage from industries that significantly contribute to greenhouse gas emissions and to encourage their businesses. clients and their clients to do the same.
Bank Rakyat Indonesia (BRI), Indonesia’s largest state-owned bank, spoke about sustainability more than any other company in Asia-Pacific between 2016 and 2020.
BIS’s domestic rivals CIMB Niaga and Permata Bank also top the GlobalData whistleblower rankings for sustainability, alongside India’s Yes Bank, Japanese financial giant Sumitomo Mitsui Trust Holdings and Japanese insurer. Tokio Marine.
Japan’s financial giants have come under international pressure to reduce their exposure to carbon loans, with Tokio Marine issuing a climate strategy last year. Indonesian banks are also coming under scrutiny for lending to coal and deforestation-prone sectors, and came second after banks in Singapore in a 2019 WWF study on the sustainability of Southeast Asian banks.
Antam, Indonesia’s largest nickel miner, Sumito Metal Mining in Japan, Indonesian construction company Wijaya Karya, and Indonesia’s second-largest cement producer, Indocement, have also hinted at sustainability prolifically, according to GlobalData’s five-year business deposit screening.
The talkative nature of sustainable development has been accompanied by a series of commitments from the business world to reduce its environmental and social impact over the past 18 months, such as reducing emissions and switching to zero. This is due to growing consumer expectations and regulatory and policy changes geared towards sustainability in certain sectors, Brine said.
A coalition of global banks pledged to achieve net zero greenhouse gas emissions by 2050 and adopt interim targets much earlier by forming the Net Zero Banking Alliance (NZBA) in April. It is designed to use the power of the financial sector to meet international carbon emission reduction targets under the Paris Agreement.
But sectors such as financial services can raise red flags with so much green talk. “Banks are definitely talking about a great game, but for many, talking is all it takes for now, and there are legitimate concerns about whether the declaration of intentions will have a material impact on results.” , said Brine.
She referred to comments from Tariq Fancy, the outgoing investment director of sustainable investing at BlackRock, who interrogates the credibility of a major banking trend: sustainable finance. âIn many cases, it’s cheaper and easier to sell yourself as being green rather than doing the long-term work of actually improving your sustainability profile,â said Fancy.
A criticism of the banking sector is that the implementation of âgreenâ measures focuses on selling financial products, Brine added. The question also arises as to whether the new âsustainableâ activities have contributed to the real economy, she said.
âEven where commitments are made, there is woefully insufficient data, tracking and incentives to understand how companies will make the changes necessary to evolve the system,â Brine said. “So while a corporate sustainability strategy is now widely accepted as a ‘must-have’, the impact or depth of implementing many of these strategies is still questionable.”
So far this year, businesses in North America, where climate-conscious President Joe Biden took office in the United States in January, are talking more about sustainability than their European or Asian counterparts, although this could be explained by regional differences in companies. reporting schedules.
Among North American companies, the sectors that mentioned sustainability the most were oil and gas, electricity, mining and foodservice. In Europe, financial services, oil and gas, power, construction and automotive companies are talking about the biggest sustainability game, according to GlobalData research.
These sectors are under considerable pressure to reduce their environmental footprint. A study of companies, published on monday, who report their carbon emissions to CDP, a nonprofit carbon disclosure organization, finds that the sectors that have made the most progress in decarbonization are utilities, healthcare, and consumer goods.
Financial services have also cut emissions, as energy companies, materials companies, IT and real estate continue on a high-carbon trajectory that is not aligned with the Paris agreement on climate change, according to CDP data.
Thanks for reading the end of this story!
We would be grateful if you would consider becoming a member of the EB Circle. This keeps our stories and resources free to all, and it also supports independent journalism dedicated to sustainable development. For a small donation of S $ 60 per year, your help would make such a big difference.
Find out more and join the EB circle