Why do businesses need to adopt sustainable practices?
Customer demand and preferences determine business actions. Customers in major markets of the world, especially in Europe and parts of North America and others, demand sustainable development. Governments in these regions have enacted legislation and rules that require businesses to adopt sustainability practices.
Businesses respond to these pressures from society and actively promote sustainable practices. Major corporations of the world are preparing annual sustainability reports in which they report actions taken by them to achieve sustainability targets.
Science-Based Target Initiative (SBTi) is a partnership between CDP (Carbon disclosure program), the UN Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). SBTi is a major institution that assists in the monitoring of these targets.
But dressing of sustainability actions is also quite common. The Corporate Climate Responsibility Monitor reported that headline pledges made by companies are often ambiguous. In a survey of 25 companies, the Monitor notes that “just 3 of the 25 companies – Maersk, Vodafone, and Deutsche Telkom have committed to deep decarbonization of over 90 percent of their full value chain emissions. The evaluation found that the actual achievement of the 25 companies is less than 20 percent of their 2.7 GtCO2e emission footprint of their respective headline target years. In short, greenwashing is common amongst corporations.
The business health of companies requires them to be transparent in their reporting of progress towards achieving sustainability goals. It is a business imperative for companies to follow sustainable practices.
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