Issue No.12 — CSR

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March 2022

Issue 12 tackles the business imperative for addressing climate change amidst escalating environmental decline

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INSIGHT

According to the latest IPCC report, climate breakdown is progressing faster than expected with the UN secretary-general calling it a ‘code red for humanity’, signalling the need for immediate action from governments and businesses.

As awareness of climate change grows, 64% of consumers recognise it as a global emergency, making genuine CSR efforts essential. 

Yet, some major corporations have been criticised for overstating their 'net zero' and 'carbon neutral' claims this year which undermines consumer confidence and genuine efforts.

However, the stakes for businesses are high: analysis reveals climate risks could slash annual returns by 40% without mitigation. Conversely, a robust environmental, social, and governance proposition correlates with higher equity returns.

Amidst increasing government regulation and scrutiny, companies will face heightened pressure to disclose climate impact and commitments, directly affecting their reputation and competitiveness.

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Increasing public pressure

STRATEGY

Progressively, brands are striving to implement meaningful CSR programmes and sustainability initiatives.

Some are forming cross-industry partnerships, like payment software provider Stripe, which has partnered with multiple carbon removal technology start-ups for its Stripe Climate product while e-commerce platform Shopify is investing $5M annually in emerging technologies across 10 industries to ‘kick start the carbon removal market’.

Others are filling the data gap for consumers where other companies fail to provide transparency – Doconomy’s banking service provides users with the CO2 and water footprint of their transactions and lets them set ‘spending’ limits which encourages ‘a more sustainable lifestyle’.

This is reflective of a bigger shift towards climate technology, which saw investment of $60 billion in H1 2021, according to PwC.

But mitigating previous carbon emissions is no longer enough as brands, like Ganni, move away from offsetting and embrace ‘insetting’ – looking at its supply chain and investing in reduction of emissions and waste.

Focusing more on ethics, Chloé has developed an open-source social impact measuring tool which evaluates working conditions against gender equality, living wage, diversity and inclusion, training, well-being, and job quality. The aim is to foster virtuous decision-making throughout the fashion industry.

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Chloe’s social impact tool identifies ethical suppliers

DESIGN

With real estate accounting for 39% of global emissions, the climate transition period marks a critical juncture for the real estate industry. During this phase, consumers will experience the tangible impacts of climate change, while businesses will face mounting pressure to decarbonise.

Design and redesign will be instrumental in creating more sustainable spaces.

The Sara Kulturhus Centre in Sweden, a mixed-use development comprising a hotel, museum, library, gallery, and theatre, prioritises sustainability. Constructed primarily from local raw materials, especially wood, it harnesses renewable energy that can be shared with neighbouring areas.

Similarly, Habitas adopts a sustainable approach by constructing low-impact resorts with a small footprint, utilising 3D printing technology and modular design for streamlined construction processes.

However, re-evaluating and transforming existing spaces are equally vital.

room2, touted as the world's first net-zero 'ho(me)tel', boasts 89% greater energy efficiency than typical UK hotels.

Hotel Marcel in Connecticut embodies this ethos. Once a Marcel Breuer-designed office block now transformed into the first Passive House Certified and net-zero energy hotel in the US.

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Habitas home in Tulum – courtesy of Habitas