2022 Will Be a Critical Year for Environmental Initiatives by Business
It’s been easy to lose track of time during the prolonged pandemic. Even as we tried to resume a sense of normalcy in 2021, the overall feeling seemed to be of time standing still. But time waits for no one, and neither will climate or other environmental challenges.
So to wrap up 2021 and start off the new year, let’s take a quick stock of what has transpired, where we are now, and where we are headed.
Here’s my assessment:
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There’s good news.
2021 saw many pledges and commitments by companies and institutional investors on the environmental front. We also saw huge amounts of capital flow to both startups focused on environmental problem solving, as well as to big ESG funds. People understand that we can’t just wait for the government programs and policy solutions we urgently need. Getting public policy right is the top priority, but since it’s not happening as quickly as we need, we have to make progress in other ways.
Turning to the private sector is a smart way to do so. Business can harness technology and access capital to innovate and solve big problems (and pursue big opportunities); business can also do a lot to bring about the public policy we need — i.e., regulation, taxes, incentives, R&D.
Moreover, as environmental problems compound and policy progress remains slow, we should expect people to push the private sector to play an ever bigger role. Where else would people turn? Pressure on the private sector will only increase.
Further, it won’t be “business as usual.” Times have changed (in very good ways). Business leaders know they need to be attentive to all stakeholders (shareholders of course, but also employees, customers, suppliers and community members), all of whom are demanding action on the environmental front.
There’s bad news.
None of this is easy. For example, look closely at corporate climate commitments — most pledges are back-end dated (i.e., net-zero goals are targeted for 2040 or 2050) and somewhat ambiguous. Such pledges are much better than nothing — after all, one needs to start somewhere — but mostly they are not yet resulting in reduced emissions and/or more protection for biodiversity.
There’s guidance.
The top goal of this newsletter has been, and continues to be, to help businesses achieve environmental goals that are ambitious, nearer-term in focus, immediately actionable and fully aligned with positive business outcomes. 2022 will be an important year. Expectations are high for business leadership. Society needs to see results. Here’s some of my advice over the past year that has gotten the most traction.