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‘Demonstrate climate leadership’, Ripple tells UK businesses

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To maintain credibility in an increasingly climate-conscious landscape, UK businesses are being encouraged to consider taking tangible action that will generate stakeholder and planetary benefits. Ripple–in particular–takes a proactive approach to helping companies progress their ESG strategies, through green energy ownership and environmental leadership.

Ripple’s latest project is Whitelaw Brae, a wind farm set to be the UK’s largest people-owned site of its kind. Located in Scotland, the site will be able to power more than 50,000 UK homes and businesses, while reducing carbon emissions and stabilising energy bills for everyone who participates.

Common sense climate action

Co-owning Whitelaw Brae will unlock a wealth of benefits for UK businesses. First and foremost, they’ll gain 30 years of stable energy prices, while being shielded from unpredictable cost spikes. Savings are applied directly to energy bills throughout the project’s lifespan, creating enhanced financial security. In addition, Whitelaw Brae is projected to be a masterclass in people-powered sustainability, saving an estimated 78,323 tonnes of CO2e annually. By participating, businesses will demonstrate a proactive commitment to environmental responsibility – a factor increasingly valued by customers, employees, and investors alike.

Ripple fosters a vibrant community of businesses that share a vision of a sustainable UK. Joining Whitelaw Brae connects a network of like-minded companies, presenting valuable collaboration opportunities and solidifying each operation’s reputation as a sustainability leader within its sector. It also allows businesses to align with a future-proof energy strategy. The UK government’s interest in renewable energy sources keenly positions Ripple members to navigate the evolving energy landscape with confidence.

Ripple’s community ownership model empowers businesses to take control of their energy future, alongside thousands of others. In addition to positive impacts on operational bottom lines, environmentally astute companies that participate will also actively contribute to a cleaner, greener UK grid and earmark themselves as climate leaders. It’s a win-win.

Ready to take action?

Visit Ripple today to learn more about becoming a member of the Whitelaw Brae Wind Farm and securing a sustainable future for your business.

Advances on ESG could be undermined by compliance failures within the supply chain

960 640 Stuart O'Brien

As businesses continue to develop the application of robust ESG standards into everyday operations, efforts could be undermined by compliance failures within their supply chain.

That’s according to new research published today by independent UK law firm Burges Salmon. In order to gauge how UK companies are reporting on the full ESG value chain of their operations, Burges Salmon surveyed over 360 business leaders across the Energy and Utilities, Technology, Built Environment, Transport and Healthcare sectors, to shed light on how prepared businesses are to meet their supply chain-related ESG disclosure obligations, set to be further tightened by a raft of new legislation, including the EU Corporate Sustainability Reporting Directive.

The report Supply chain ESG disclosure – is your business ready?  reveals that 32% of all businesses surveyed are completely unprepared to meet their ESG supply chain disclosure obligations and among those, only 29%, fewer than 3 in 10, believe their organisation fully understands the legislative and regulatory landscape governing ESG corporate disclosure.

Michael Barlow, partner and Head of ESG at Burges Salmon, says: “UK companies must first prove their commitment to ESG by complying with a range of mandatory disclosure obligations. Ensuring business partners meet ESG standards requires investment, resources and constant monitoring, and it is clear from our research that most companies still have some way to go.”

Notably, the report shows that it is large companies that are not as prepared as they should be, with only 45% of respondents confirming that they have a dedicated team that deals with ESG related matters. Similarly, only 43% of respondents in these companies say their organisation fully understands the legislative and regulatory ESG risks their supply chain may give rise to.

By contrast, evidence from the research shines a light on small and medium sized businesses as those able to provide greater levels of influence in successfully meeting their ESG compliance obligations, with 75% of respondents from this group claiming their organisation fully understands the legislative landscape.

“A small organisation might have more limited disclosure obligations and can be quite on top of it. For large organisations, obligations are more complicated, particularly if they operate across different jurisdictions. What’s more, if ESG teams are too remote from day-to-day operations, there is a danger that ESG remains on the periphery of business priorities” adds Barlow.

With research insights from across five sectors, the findings seem to position the Energy and Utilities sector firmly as the leader of the pack, with 68% of those surveyed saying their company’s ESG commitments and those of its supply chain are well aligned, and two thirds of respondents also claiming to have someone at senior level monitoring ESG policies, procedures, and compliance with regards to the supply chain.

James Phillips, partner and Head of Energy at Burges Salmon, comments: “In terms of the larger established energy and utilities companies, I think there is a high level of sophistication, expertise and understanding of what it is they need to be doing, and how to approach implementation.”

That is not to say the sector isn’t facing challenges and the data points to a number of areas where sharper focus is needed – in fact, 46% of respondents in the sector say their company has developed a code of conduct in respect of ESG matters that is adhered to by the supply chain, and only 47% say their organisation has detailed procedures in place to assess the ESG compliance of prospective supply chain companies.

Conversely, the Healthcare sector is the one at most risk of non-compliance and the least prepared of all sectors surveyed. Indeed, almost a third of respondents, 31%, say their organisation doesn’t fully understand the legislative and regulatory ESG risks their supply chain may give rise to, and over a quarter, 27%, say robust verification of the ESG data provided by the supply chain isn’t always taking place.

Meanwhile, research data from other sectors surveyed show that some are in a good position to meet corporate disclosure obligations in relation to their supply chain, but more work needs to be done. In fact, only 22% and 14% of respondents from the Technology and Built Environment sectors respectively say their supplier contracts have been adapted to enable them to gather the required ESG information, and nearly 25% of those surveyed in the Transport sector say their organisation doesn’t fully understand the legislative and regulatory ESG risk its supply chain may give rise to.

Highlighting Scotland as the UK nation that is most prepared, the report goes on to explain that it is factors such as the size of the Energy sector, particularly renewables, low carbon industries and the traditional oil and gas sector, that is accelerating its transition, which are all driving this upward trend.

Malcolm Donald, a partner in Burges Salmon’s Edinburgh office says: “Through the conversations I’ve had with clients based in Scotland, I’ve noticed that much of the ESG focus has always been on the environment, but there’s certainly much more focus on social and governance now and I think that has been driven by internal stakeholders. The other thing that clients are recognising, is that it is no longer just about what they do, but it’s about making sure that their supply chain is doing the same thing in a demonstrable way.”

Power companies on track for energy transition but ‘must not neglect full ESG responsibilities’

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Power companies will face increasing pressure to respond to both social and governance issues while navigating their way through the energy transition process in the following decade.

GlobalData’s latest report, ‘ESG Top Trends by Sector – Thematic Research’, reveals that renewable energy initiatives have been gaining traction globally, with power companies primarily focusing on the environmental factors (‘E’) in ‘ESG’. However, it is important that these companies focus not only on the environmental and technical aspects of their operations, but also maintain a holistic approach to sustainability.

Adrian Li, Energy Transition Analyst at GlobalData, explained: “Renewables taking an increasing share in the global power mix can be seen as a consequence of multiple environmental efforts from power companies to increase investments in developing clean power generation projects. This increasing share in the global power mix is also supported by government subsidies which have made green energy more price competitive, decreasing its costs exponentially and allowing companies a faster shift from fossil fuels.

“There has been a dramatic growth in the global renewable energy share; 2024 looks to be the watershed when renewable sources overtake coal-fired power generation share globally. By 2030, it is expected that more than 40% of global power will be supplied by renewables. This increase has been driven by both technological advancement and favourable government policies.”

GlobalData also notes that care must be taken by power companies not to neglect social and governance factors. In Q1 2022, social media conversations around ESG declined by 36%, compared to Q4 2021. This can be attributed to the COP26 event held in October 2021 that ignited intense interest in climate change on social media. Sentiment remains pessimistic in social media conversations regarding ESG, reflecting consumer caution towards changes in the power industry.

Li added: “Consumers have become very conscientious about carbon emissions and climate change, and, by extension, the social impact of these companies. Factors such as poor workplace conditions or corruption will severely damage the reputation of power companies and decrease investment, as interest in energy becomes increasingly consumer driven. Even something such as poor cybersecurity—although not directly related to climate change—could sour the public’s impression of a company and make them lose confidence.”

The benefits and challenges of Sustainable Procurement and how to achieve your goals

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By Mark Perera, CEO and founder, Vizibl

As a result of mounting environmental and social challenges affecting the entire globe, many organisations now place sustainability as a priority within their strategic goals. In this landscape, procurement has an enormous role to play in embedding sustainability into everyday practices and across the wider supply chain. With most of our impact on the environment and our communities sitting in the supply chain, clearly, we cannot become truly sustainable without our suppliers.

Sustainable procurement is an approach to the procurement process that embeds ESG (environmental, social, and governance) issues and corporate social responsibility (CSR) practices at the heart of its specifications and its process. But how can it be achieved, and what are some of the benefits and challenges that businesses need to understand?

Future-proofing your business

Research indicates that consumers are becoming increasingly eco and socially conscious about where they buy from. Consequently, the need for businesses to proactively pursue supplier sustainability is growing. With international bodies, governments, and investors also beginning to add pressure it is vital for businesses to future-proof their organisation.

In 2021, a landmark ruling saw the energy giant Shell held to account by courts and governments for the sustainability performance of its supply chain. The ruling saw the company compelled to raise its emissions reduction commitments. Importantly, the Dutch court system made these commitments applicable not only to their own operations but also to ‘the customers and suppliers of the group.’

Business investors are also beginning to demand more action. May 2021 saw Chevron shareholders vote in favour of a proposal to cut scope 3 emissions at their AGM, signalling frustration with the company’s dilatory approach to climate change.

In another case, Exxon Mobil witnessed an activist investor staging a coup on their board over the strategic direction the company was taking regarding sustainability. Hedge fund Engine No. 1 argued that the climate crisis posed “an existential threat to the [Exxon] business”. Exxon eventually lost three board seats to Engine No. 1 and the market responded in kind, with Exxon’s share price rising 1.2% the following day.

With the UK in the midst of yet another heat wave, we are experiencing a stark reminder that the challenge of the climate crisis is not going away. And as the lifespan of an S&P 500 company continues to dwindle as enterprise organisations attempt to meet increased challenges from changing stakeholder demands, technological progress, new startup business models, and more, it is imperative that businesses adapt to the new environment. Businesses that take pre-emptive action to expand their sustainability efforts in particular will be future-proofing their business against the rising tide of fines, regulatory changes, legal rulings, and investor action.

Common challenges to Sustainable Procurement

While there are clear and desirable benefits to achieving a Sustainable Procurement programme, there are challenges that remain which can derail the necessary efforts if targets are to be achieved.

For any programme to successfully launch and scale it must have the sponsorship of executive and senior leadership. Making the case for how sustainable procurement practices impact the organisation’s strategic ESG goals is key to securing this mandate. Without the buy-in of C-suite, procurement leadership, and supply chain leaders, individual practitioners will not be able to effect change at the scale required to deliver on the organisation’s goals.

One way to secure sponsorship is through constructing a business case for expanding Sustainable Procurement practices. A common method to do this is to ensure that the true cost of existing ways of working is accounted for in the business case, such as attaching a carbon cost to business-as-usual operations.

There is also the challenge of selecting, measuring, and tracking the multitude of metrics that fall under the banner of ESG. Knowing what to measure and how to standardise this across suppliers is difficult. This ‘analysis paralysis’ is a key factor in why many organisations are slow to get started on their sustainable procurement efforts, feeling incapable of taking action until they ‘know enough.’

At Vizibl, we counsel an approach of ‘controlling the controllables’ and focusing on what the business does know to overcome this challenge. For example, with supply chain emissions, many organisations will know where most of their scope 3 falls. They will also know which categories within that cohort tend to be emissions-intensive, how much they spend on those categories, and which suppliers they work with within them. Though this cannot replace a full, robust dataset detailing the current state of play, it provides a reliable place to start making improvements whilst waiting for the full data set to arrive.

Developing a successful Sustainable Procurement strategy

For sustainable procurement to truly flourish, organisations need to forge true “customer of choice” relationships with the suppliers who are most critical to delivering on their sustainability pledges.

“Customer of choice” refers to a buyer-supplier relationship founded on trust, transparency, and robust communication, in addition to the ethos of mutual benefit. By forging this relationship, both buyers and suppliers gain priority access to one another, and can effectively deliver on both the goals of the relationship and their individual organisations. Additionally, it makes it easier to flag any issues or areas for improvement as the partnership progresses.

To address the sustainability challenges facing large enterprises, existing solutions will not suffice. In a market high on ESG hurdles and low on green products and solutions, innovation will be key to satisfying the demand for fresh ideas. “Customer of choice” suppliers come armed with a wealth of subject matter expertise, knowledge of competitors and an intimate understanding of local markets, making “customer of choice” relationships a key driver of strategic supplier innovation.

The time is now

Last year, the United Nations declared that by 2030 the world must halve greenhouse gas emissions to prevent devastating climate change. Organisations and their supply chains have a massive part to play in these reduction efforts.

Whilst many have already developed and declared their ESG goals, more must be done. Business change is occurring, but particular focus must be applied to procurement and supply chain’s role in accelerating this transformation towards sustainable business practices. Developing sustainable procurement programmes alongside dependable, trusted suppliers will certainly be a huge step in meeting necessary targets.