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Why net neutral can be a net negative for brand and reputation

12 January 2021

By Andrew Adie

Committing to net-zero by 2050 (or before) and ensuring there is a clear social as well as commercial purpose for your organisation has become de-rigueur for business.

Pre-Covid there was a risk that this had, in some cases, taken on a slightly tokenistic slant. Bumper-sticker slogans that aimed to set ‘purpose’ for organisations risked looking meaningless.

Covid changed that approach by reminding us all that business has a core purpose: to make money, create and preserve jobs and to generate revenue and economic growth. It reminded us that having commercial purpose isn’t shameful, and it doesn’t need to be shrouded in a meaningless ‘green and ethical’ narrative (although business does need to be both green and ethical).

While the ‘build back better’ slogan has also been overused it does suggest that business can hold its head high and understand that its role is valuable but that its commercial purpose needs to be married with a deeper social, environmental and ethical purpose. As we look to the future, business needs to lead and embrace systemic change but it doesn’t have to apologise for making a commercial margin.

And looking to the future is something business is doing right now. While the rest of the UK is mired in the third lockdown, the optimism of the equity markets suggests that the FTSE has seen the dawn while the rest of us remain in darkness.

To that end the launch of HRH the Prince of Wales’ Terra Carta (launched at the One Planet Summit being held in Paris this week) is a strong notice of intent for the future role of business.

The Terra Carta has been signed by a number of large organisations who lead where others will follow. It’s got serious backing and it has clear action points and commitments which organisations have to adhere to.

For me what is noteworthy about it is the breadth of its vision. Its not just about carbon reduction, it also covers biodiversity, equality, inclusion and being a positive influence within your community.

These are key tenants of ESG and purpose but they’ve been a little eclipsed of late by carbon reduction. I’m not knocking organisations that commit to netzero but this is a baseline, it isn’t a commitment to have a positive impact on society and the planet, its an assertion that you won’t have a negative one.

The Terra Carta reminds us that when setting purpose an organisation needs to look at how it can create positive change across areas where it has the ability to genuinely move the needle.

The growing focus on boosting biodiversity, ongoing recognition that we need to create a fairer more equitable society and the reinvigorated focus on healthcare and supporting business of all sizes through the supply chain are all a key part of the role business plays.

Despite the Covid lockdown, public and private sectors have made huge steps forward, with the commitment to carbon reduction and climate-related reporting an important regulatory step forward, as seen through the government announcement that all listed companies, and large pension funds, asset managers and others will have to report to Taskforce for Climate Related Financial Disclosure (TCFD) standards by 2025.

All this brings us back to the purpose of business. Because business creates jobs, wealth and fuels commerce it has a huge impact on the world simply by existing. Meeting minimum standards, whether they be TCFD reporting or net zero by 2050 is key and will also be challenging to achieve, which is a good thing. Easy targets are a bit pointless.

However, in a post-Covid world business needs to ask itself what its purpose can be beyond the base line that it is required to address. If business doesn’t ask itself that question then the rest of the world will do it regardless.

I would suggest that this doesn’t involve making Purpose statements and engaging in a race to commit to net zero by ever earlier decades (valuable though that can be if achieved).

I think it lies in taking an ethical and compassionate view of the world around you and picking the areas where your business can make real impact and then committing to being a very different type of organisation.

The conspicuous wealth, excessive margins and world domination that have been an increasingly unacceptable face of business are likely to be utterly toxic and also a massive reputational red flag in a post-Covid world.

We’ve all grown accustomed to sacrificing our own desires for the common good, the world will take a dim view of business that does not follow that sentiment.

Pre-Covid I was surprised that the media and activists were not more actively writing about and policing the purpose statements and environmental activities undertaken by business. Many businesses were doing a great job, many others appeared to be hiding behind a ‘purpose’ bumper sticker.

As we look into 2021 from a base that none of us would have wanted, the role that business plays will be critical to the way that the economy, environment and society recovers.

Committing to net-neutral behaviours is a starting point but the opportunity for us all is for business to commit, sincerely and without show and bluster, to driving positive change wherever they can make the greatest impact.

The big win in 2021 is to build a net positive mission.