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GreenBiz

Climate love

Moving from corporate responsibility to impact

The success of sustainable business leadership hinges on moving from corporate responsibility to corporate impact. As mandatory ESG disclosures and impact economics converge, the role of corporate responsibility is shifting. Impact professionals increasingly need to oversee both traditional ESG risk mitigation and impact-oriented new value creation.
What we call the "Impact Economy" is creating new opportunities to increase enterprise value by both mitigating risks and seizing upon innovations. This is opening new sources of business value and advancing impact alongside profit.
As the measure of a company's total value, enterprise value creation is a business’s North Star. But the emerging Impact Economy is changing both what constitutes enterprise value and who gets to decide it. As such, we are entering a new chapter in measuring corporate performance β€” an evolution in the underlying contract between the private sector and the rest of society.
In the Impact Economy, economic growth and business growth are not distinct from β€” and increasingly can be aligned to β€” solving social and environmental problems. We are starting to place a monetary value on a company’s most significant impact
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on society. As this field evolves, we can also start to accurately and consistently leverage data disclosures to compare companies and sectors, just as with traditional financial performance. This opens up a new era of transparency and integrity in measuring the impacts that companies create.
We see the climate crisis as the first and best place for leaders to expand their thinking and the way they operate to capture this opportunity. We’ve never seen the level of awareness for climate action and the need for climate impact as we have in the past few years. This is driven by a variety of factors: financial market expectations, new regulations, and new generations of employees and consumers who demand more action from the brands they work for and buy from.
If mandatory ESG disclosure is the stick, then the opportunity for new value creation is the carrot. The transition to a zero-carbon global economy may prove to be the greatest economic transformation the world has seen since the Industrial Revolution. One report found that sustainable business models could open economic opportunities worth $12 trillion and create 380 million jobs by 2030.
Many companies are already seeing business value in areas ranging from cost savings and efficiency, attracting and retaining talent and improving their supply chains, all of which result in far greater durable and resilient businesses. For example, research by Okta and Anthesis Group found that hybrid work can support a net-zero strategy β€” reducing GHG emissions from reduced workplace square footage and less travel to work by car.
While those increases in enterprise value are important, the identification of new revenue-generating opportunities may be the largest value driver. A recent McKinsey survey of C-suite leaders found that 40 percent of respondents expect company sustainability programs to generate value in the next five years β€” nearly double the current share.
This new value generation is touching virtually every industry, as more consumers and workers consciously choose earth-friendly businesses. Salesforce’s Net Zero Cloud product stemmed from an effort led by the Salesforce sustainability team to measure, manage and reduce its own carbon footprint. And the Stripe Climate offering is another example of a climate-led business innovation β€” in this case enabling Stripe’s global customers to invest in frontier carbon removal technologies at scale.
This is just the beginning β€” from sustainable fashion and green consumer products to electric vehicles, and enterprise software solutions to track climate impacts, more businesses are finding success by placing sustainability at the center of their business models.

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  • Waigwa Monica

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    64 w

    This is so so helpful especially to SMEs who might be struggling with the modalities to shift to sustainability. Combined with policy, incentives , sense of urgency to address environmental impacts and sheer will, I believe corporates can achieve full scale sustainability and bring about serious impact. Thank you for sharing.

    12
    • Evangeline Wanjiru

      β€’

      64 w

      When we all work towards a certain goal nothing is impossible

      15
      • Munene Mugambi

        β€’

        β€’

        64 w

        Corporate impact can be felt if an organisation takes it's role seriously

        16
        Welcome, let's solve the climate crisis together
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