Finance, Sport, Newsletter, Packaging & Community
Giles Gibbons
Founder and CEO, Good Business
1. Banking on change
A year ago, the UK announced plans to become the world’s first net-zero aligned financial centre. But what progress has truly been made in the last 12 months?
This week, Stuart Kirk (formerly the Global Head of Responsible Investments at HSB) wrote a scathing article on the topic of net zero finance – he doesn’t pull his punches, calling net zero targets “one of the dumbest things I’ve seen in thirty years in finance”. We share his concern on many of his points – continuing confusion across the sector has resulted in a slow pace of change. What does net zero finance actually mean, and what is in scope? Do targets and metrics actually translate to real world impact? He also takes aim at climate targets such as Robeco’s 50% reduction in financed emissions by 2030 (which he notes only covers 40% of assets under management) and he is concerned that equity finance is an ineffective tool for delivering change. If you divest your shares, you sell them to someone – who knows what action they will take once they own them? You may have greened your portfolio, but have you actually made a difference to global carbon emissions?
World Benchmark Alliance recently published the 2022 Financial System results, which highlighted although many financial institutions are making commitments to net zero goals in the future, only 2% of financial institutions have interim targets to guide progress. So much remains to be done. And these changes need to happen at a systems level, which is always hard.
But while change is painfully slow, debt finance is a powerful lever for change, and sticking around and asking tough questions – engagement rather than divestment – has real impact. We know from our clients how powerful investor pressure can be as a catalyst for change. Divestment could also work, in principle, but only if everyone is aligned on the same issues. The Science Based Targets Initiative are due to publish the Net Zero Standard for Financial Institutions in the new year, which we hope will provide some clarity on some of these issues, though probably not to the satisfaction of Stuart Kirk. And in the words of Rishi Sunak in 2021, we’d also like to see more from governments to “enact bold climate policies to take advantage of these enormous financial resources”.
There’s a lot to criticise, but that isn’t a reason to shut up shop and go home. We need better labelling and consistency on what constitutes net zero, more engagement and pressure on high carbon emitters through the mechanism of asset ownership and pragmatic engagement with change at a system level. Yes, net zero finance in its current state is far from perfect, but as a team of optimists, we’re not giving up yet. And we don’t think anyone who cares about creating genuine change through one of the most powerful levers we have should either.
2. And the winner is...
The last few weeks have been quite something for sport. We’ve had the Women’s Rugby World Cup, the Men and Women’s Rugby League World Cup, the Rugby League Wheelchair World Cup, the Men’s T20 World Cup and now, in a few days’ time, the Men’s Football World Cup.
As exciting as these events are, the power and impact of sport reaches well beyond these pinnacles of excellence. At Good Business we have always believed that the sport sector, and those that invest in it, have a responsibility and a desire to enable the world to benefit from all the amazing attributes and impacts that sport provides.
Unfortunately, all too often these positives are lost amongst the negative stories that dog sport, from the choices of big event hosting nations and doping scandals, to empty stadiums and fan violence.
That is why we are so pleased to see the second edition of the Laureus Sport for Good Index. An Index that is designed to shine a light on those organisations that are having the clearest and most meaningful impact on sport, celebrating their successes and learnings, and providing compelling evidence for the role that sport can play in driving sustainable change, be that societal or environmental.
The Index celebrates those brands that, through collaboration, innovation and creativity, are making significant contributions across the 17 Sustainable Development Goals (SDGs) as laid out by the United Nations. Featuring leadership from big global brands like Adidas and Microsoft to more local and niche brands such as Allbirds and Ecotricity, it has some amazing inspirational examples for us all.
The Index may not contain all the answers for the myriad of issues facing the sporting world, but it does remind us of the great power sport has to change the world.
3. Today, do this
It’s not hard to know what the urgent social and environmental issues of the day are, but it can be difficult to know what to do about them at the individual level. Weekly newsletter ‘Today Do This’ aims to tackle this problem, addressing issues from anti-semitism to staying safe in a crowd.
Today Do This is a free subscription-based platform that provides advice and tips to help employees and businesses make day-to-day changes to help achieve social and environmental commitments in the form of practical guides or actionable tips. Recently, in response to the UN report launched at COP27 stating that net zero commitments made by companies are often not matched by action, Today Do This highlighted the importance of employees advocating for clear, honest net zero strategies within their businesses.
Individual action may not change the world on its own, but pressure from employees and concerted efforts by small businesses, which make up a huge proportion of businesses worldwide but often lack the resources enjoyed by larger businesses to make significant sustainability improvements, will make a huge difference. Access to information and guidance, for both decision makers and employees, on how to make changes in businesses in this sector is essential, and any platform with this purpose is a winner in our eyes.
As COP27 has highlighted, we still need stronger action from larger corporations and those in power, but in the meantime, everyone can do their part to create societal change. As Today Do This reminds us: it’s everybody’s business to change the world for the better.
4. Plastic blag
Being proven wrong can be tough. But admitting you’ve made a mistake can be even harder.
Right and wrong is often seen as a binary thing, but the reality is more complex. Our opinions are informed by the information available to us and it can be hard to be open to information that challenges opinions we form, particularly when the information challenges opinions that lead us to doing ‘good’ things.
This is particularly relevant to sustainability, where doing good relies on challenging the status quo and embracing new ways of doing things. And often we need to commit to trying new things before being able to fully understand them.
This is what lots of grocers have done by committing to compostable alternatives to plastic bags. But unfortunately, the bubble has been burst by recent research including from the Big Compost Experiment, which showed that 60% of plastics labelled as ‘home compostable’ fail to disintegrate after six months. Perhaps there’s a lesson in not relying on new technologies – ultimately, we need to reduce the quantity of materials we consume to guarantee that we can lessen our environmental impact.
But for us, the most powerful lesson has been from our friends at Abel & Cole, who gave a masterclass in how to gracefully admit getting something wrong, drawing attention to the issue of compostable packaging, the mistaken assumptions they were relying on and setting out their proposed new approach. Not only is this a useful contribution to the conversation about sustainable packaging, bringing to light important new research, but it is an effective way to build trust among your customers.
It’s easy to see this as ‘getting it wrong’, but perhaps instead we should focus this is an important step forward, and a lesson in cracking on with it without letting perfect be the enemy of the good.
The Goods: ActionFunder
ActionFunder helps businesses do good, locally.
When it comes to community building, it’s important to think local. If you want to have a positive societal impact as a business, the place you live or work can be a great place to start.
ActionFunder is a multi-award-winning B Corp with 15+ years’ experience in connecting businesses and foundations with local communities; enabling them to achieve incredible things and often tackling problems that bigger charities cannot.
ActionFunder’s brilliantly simple platform allows businesses to easily find and support community projects across the UK. Uniquely, it also provides businesses with the opportunity to start funds for specific community causes and gives smaller charities and community organisations the opportunity to apply for grant funding to complete these projects.
It’s a high-impact, low-cost, fast, and transparent way for businesses to put money directly into the grassroots of society, then track and celebrate the impact.
