Companies must set net zero emissions targets and devise plans for adapting their business models for a low emission world, says Mark Carney.
In a speech today at the launch at the launch of Imperial College Business School’s Leonardo Centre for Business on Society, the former Governor of the Bank of England will urge businesses to come up with strategies which reflect a clear commitment to addressing the climate crisis in order to attract the investments they need to become more sustainable.
“Investors, banks and indeed society, will increasingly differentiate between companies that meet this gold standard and those that do not. That means backing companies with credible plans with the necessary finance to turn plans into action; and divesting those who don’t demonstrate credible intention to transition.” Mark Carney The UN’s Special Envoy for Climate Action and Finance
He will argue that “investors, banks and indeed society, will increasingly differentiate between companies that meet this gold standard and those that do not. That means backing companies with credible plans with the necessary finance to turn plans into action; and divesting those who don’t demonstrate credible intention to transition.”
Mr Carney’s intervention includes a call for COP26 to prioritise a more sustainable financial system centred around climate change to be “built on the three Rs of reporting, risk management and returns, and one M of mobilisation through new market structures.” He will stress that these “pillars” are needed for businesses to “build expertise, test efficacy and collectively upskill” at a time when sharing knowledge is essential to tackling the climate crisis.
Addressing business leaders at Imperial, Mr Carney will argue for the creation of a “more fair, sustainable and equitable society” and stress how businesses can play their part by creating a “more stakeholder-oriented model of business to solve society’s common problems.”
Mr Carney will be speaking at the launch of the Leonardo Centre for Business on Society, a new research centre based at Imperial College Business School. The centre aims to co-design, test and scale new forms of enterprise to create a more sustainable and fair socio-economic system.
The online event brings together a select group of business leaders and academics to explore how businesses can become more sustainable and improve their financial, social and environmental performance. The Leonardo Centre’s launch will include a call to action to create a form of enterprise needed for a just and regenerative form of capitalism.
Mr Carney will say that the Leonardo Centre is timely and “of critical importance” as businesses consider their strategic direction in the wake of Covid-19. He emphasises the need for businesses to ensure their objectives align with societal needs and to take responsible action on issues such as environmental sustainability. He will also outline what he defines as a “purposeful” company – one that “engages all its stakeholders – employees, suppliers, customers, communities and shareholders with that purpose and recognises that the art in delivering purpose is not to unfairly/unjustly favour one group of stakeholders at the expense of another.”
He will ask the question as to how companies can best achieve this type of “purposeful” business and embed it in their governance to create a more stakeholder-centred business model.
Transition to a more sustainable future
Professor Maurizio Zollo, Scientific Director of the Leonardo Centre for Business on Society said: “In the lead up to COP26, many companies will need to have a re-think about their current business models and ask whether they are serving the greater good of society, particularly in relation to the climate crisis. The Leonardo Centre is a global laboratory to explore and experiment with innovative logics of business. The centre will bring together experts from environmental, social and medical science, with management, finance and engineering scholars to develop and leverage unique data for real world collaborative experimentation with businesses and institutions.”
“The underlying challenge is to change the mindset of leaders and peoples throughout the world.” Sir Andrew Cahn Trustee, WWF, Non Executive Director, Huawei and Nomura
The launch event for the Leonardo Centre will feature high profile speakers from industry and Government including Sir Andrew Cahn, Trustee, WWF, Non Executive Director, Huawei and Nomura. He said: “The underlying challenge is to change the mindset of leaders and peoples throughout the world. Once we accept that there is a climate emergency, then we will adapt our policies and harness our human ingenuity to dealing with it.”
Paul Hudson, CEO of healthcare firm Sanofi and one of the keynote speakers at the event said: “Bringing business, policy makers and academia together to collaborate and propose new forms of enterprise for a better and more sustainable world is clearly a noble ambition. From my perspective, it starts by accepting that we have to reset some of our old beliefs, we have to un-learn and re-learn.”
Praising the ambition of the Leonardo Centre, another participant, Keith Tuffley, Global Head, Sustainability and Corporate Transitions, Citi said: “The Leonardo Centre will help catalyse and accelerate the solutions and opportunities, centred on science and research.”
To register for the launch event of the Leonardo Centre for Business on Society, please visit the Imperial College Business School website. The event is hosted online today from 13:00-16:15.