"Companies are now placing climate change and sustainable development at the heart of their strategy"

In just a few months, the environmental challenge has risen to the top of the strategic agenda of all major companies, with an unprecedented awareness of the climate emergency. Jean-Baptiste Blondel, Senior Manager of the Sustainability practice, shares his vision.

The last few months have been marked by multiple climate disasters: unprecedented heat waves in India and Pakistan at over 50°C, heat domes in Canada, torrential rains in Germany and Belgium, megafires in Siberia, and more… Awareness of the climate emergency has become clear, and was reinforced by the “red alert for mankind” in the latest IPCC* report. In response, governments are significantly increasing the ambition of their climate policies, including the “fit for 55” legislative package in Europe, and the massive infrastructure investment plan in the United States… Far from being outdone, consumers are expressing increasingly strong expectations for sustainable products and services. Finally, students are now questioning their career choices in light of corporate social responsibility.

Faced with regulatory constraints and the growing expectations of consumers and employees, companies are now placing climate change, and sustainable development at the heart of their strategy. Historically dealt with by CSR departments in an approach essentially based on risk management, sustainable development is now a source of opportunities and competitive advantages for success in the marketplace.

At the root of the climate problem, the major energy companies are reshaping their business portfolios to invest massively in renewable energy and energy services. Car manufacturers are moving rapidly towards electric vehicles, transforming their production lines and developing shared mobility services. With crucial leverage, banks and insurance companies are assessing the sustainability of their asset portfolios, reorienting their investment policies, and supporting their clients in the transition. Heavy industry is studying process electrification and betting on hydrogen, while retailers are mobilizing their supply chains and developing the circular economy and second-hand markets.

The transformation that is taking place is unprecedented in scope and represents a colossal challenge for companies. It affects their business portfolios, business models, products and services, production units, and supply chains, without forgetting the indispensable cultural and managerial transformation, which is particularly complex to carry out in large companies! There is no doubt that the success of companies in the coming decade will be based on their agility and their ability to integrate responsibility into the heart of their business model to make it a powerful lever for differentiation and performance. This focus will enable them to enhance the customer experience and brand loyalty, promote employee recruitment and retention, strengthen their capacity for innovation and development, and many other benefits.

 *Intergovernmental Panel on Climate Change