Sustainability matters

Notwithstanding the reputational benefits, sustainability and environmental compliance are at the forefront of good business practice. There are many reputational, marketing and PR yields, as well as financial benefits, such as reducing bottom line costs. Research also suggest that people want to work for employers who embed sustainability strategies into their culture and core values; they see the benefit in working for a conscientious employer – staff are retained, and working in an environment that promotes practices such as energy efficiency allows for higher productivity (better, more reliable equipment; staff engagement; making the link between bottom line savings and job security).

A proactive approach toward managing sustainability is now key to securing and winning new business.

Key drivers

There are numerous new legislative and regulatory environmental and sustainability pressures on all organisations, and it is imperative that the legal sector takes a leading edge. The key legislative drivers tend to fall on the larger firms, namely:

• The Energy Savings Opportunity Scheme (ESOS) which is administered by the Environment Agency, and is now in Phase 3 (the key compliance date is December 31 2022). Larger organisations will need to undertake energy audits every four years, and report savings identified. You will need to employ an ESOS Lead Assessor to sign off your report, as well as a Senior Board Director, and audit at least 90% of your significant energy consumption. There are penalties of up to, and over, £50,000 for non-compliance, which is also published in the public domain.
• Streamlined Energy and Carbon Reporting (SECR), requires larger organisations report their annual energy consumption and direct carbon emissions within their Director’s report, and provide a roadmap with regards to how these will be reduced- this should include ESOS recommendations. There are no penalties for not reporting, but will be part of the end of year financial auditing process.

Whilst only voluntary, the Science Based Targets initiative (SBTi), is becoming an industry norm and global standard. This arose from the 2015 Paris Agreement, where world leaders committed to curbing global temperature rise to well-below 2°C above pre-industrial levels, and pursuing efforts to limit warming to 1.5°C. To achieve this, greenhouse gas (GHG ) emissions must halve by 2030 – and drop to net-zero by 2050. This is a short amount of time and it requires a response from all sectors. The SBTi is applicable to small and medium enterprises (SMEs) and large firms, and will mean all companies throughout supply chains will be subject to further scrutiny in terms of their direct carbon emissions, and will increasingly be required to produce annual carbon footprints or consider carbon budgeting and targets.

Carbon management journey steps

Managing carbon footprints has become essential for all organisations. It is important that the carbon footprint measurement is appropriate in scope and progress is measured, as an organisation moves from taking its ‘first steps’ to becoming an exemplar in the market. Organisations that take their impact on the environment seriously also have proven employee retention and graduate attraction .

The best start to make in the carbon footprint journey is with what is what is within your control. Over time, firms can increase the scope to encompass your products , supply chain and the carbon emissions of your employees.

An annual carbon footprint appraisal should start with your latest financial year. This should cover:

• Scope 1 emissions: typically, for an office, this will be natural gas and any emissions from refrigerants used in the buildings air conditioning system. This will also include any company owned vehicles.
• Scope 2 emissions: mainly electricity.
• Scope 3 emissions: these are less direct but will cover business travel, people using their own car and claiming mileage, use of public transport and flights. Scope 3 can also broaden out to paper use and waste, and then look at other areas of your supply chain.

Once you understand what your carbon footprint is, you can focus on measures to reduce this. Initially, it is recommended to have a fluid sustainability policy in place – set objectives and targets year on year to reduce carbon emissions and other environmental impacts as part of a sustainability policy. This could include an aim of signing up to and setting SBTi targets, or looking at management systems for example, to run an ISO 14001, an international environmental management system; or ISO 50001 energy management system. These provide a coherent method to manage all environmental impacts an ensure legislative compliance. It is also powerful in winning new tenders. Looking at renewable energy contracts is also a quick win in terms of reducing carbon emissions

Where some emissions are unavoidable, for example, those associated with travel to client sites, you could consider “offsetting” historical emissions by contributing to low carbon projects – this also has many reputational benefits.

Key takeaways

Organisations that are genuinely dedicated to managing their sustainability impacts are more attractive to graduates and have demonstrable employee retention.

It is important for firms to be prepared for scrutiny; from supply chain to their clients. Signing up to SBTi will demonstrate that your approach is authentic, and enable an effective response.

Flexibility is key – environmental and sustainability legislation and government targets are constantly changing. It is important that you review and refresh your policies in line with these changes.