Exclusive: Businesses call on govt to set global standards on environmental impacts
Businesses are calling on the government to set clear global standards for recording their impact on the environment.
A host of CEOs from across the business world, including James Timpson and Schroders’ Peter Harrison, have said that making it cheaper and easier for firms to record their environmental impact would make it easier not just for them to assess their progress but for investors to drive change where it’s most needed.
The business leaders backed a report, by UK charity ReGenerate, which outlines how the government can support and incentivise companies to step up during Covid-19 recovery, tackle climate change and stoke the government’s levelling up agenda.
“The world needs more purpose-driven companies which are dedicated to driving profits whilst benefiting society, because profit, people and planet are completely interwoven,” Schroders CEO Peter Harrison said.
Universal standards
One key road to reform is setting clear global standards, which the UK can use its position at the helm of COP26 and as the host of the upcoming G7 to rally other countries to do the same.
Creating a universal framework would also push countries to invest in a global database where shareholders and consumers can access each business environmental impact data.
The co-funded database could also aid policymakers in outlining climate initiatives and environmental laws.
To do so, the government could hone the 2006 Companies Act to offer guidance for purpose-driven businesses, the report suggested.
Or, a roadmap could be created as part of the current BEIS audit and corporate governance reforms.
The report has warned that the UK has some catching up to do, as France, Canada and the US have already set out clearer corporate standards.
The rise of ESG
The UK has committed to a 78 per cent reduction of emissions produced on British soil by 2035 and to reach net zero emissions by 2050.
But with government debt at its highest since the 1960s, due to the collision of the pandemic and Brexit, the UK will need an extra hand from businesses.
Environmental, social and governance (ESG) standards and measures have edged increasingly higher on the investor agenda in recent months, while consumers are more likely to put their money where their mouth is.
The cost and difficulties of reporting ESG impacts, however, has deterred many businesses from accurately reporting on them.
The report, also backed by Moonpig founder Nick Jenkins and Big Society Capital CEO Stephen Muers, has therefore urged the government to make it cheaper and simpler for companies – in a bid to incentivise them.