When doing business in today’s rapidly evolving world, it's no longer enough to be the fastest, the shiniest or the best.
People want to know the products they are buying haven't had a negative impact on the Earth, and to trust that the companies they support are being truthful about their green efforts.
These considerations are becoming an intrinsic part of the decision-making process and companies across the board are being called on to put more energy into their environmental initiatives and to lay bare the details for public scrutiny.
Many are taking heed – a wise move, as research has shown that transparency around environmental impact is good for business as well as good for the planet.
It’s a trend Intrepid Travel has long been spearheading. "Since we started in 1988, our principles have been to offer sustainable, experience-rich travel, embedded purpose and sustainable growth, improve profitability and leave a legacy," Managing Director Brett Mitchell tells The CEO Magazine.
"In general, as a business, we are seeing that there is a high demand among travellers for sustainable travel options. People want to travel with companies who have the certifications to prove they are truly being sustainable, accountable and transparent."
"People want to travel with companies who have the certifications to prove they are truly being sustainable, accountable and transparent." – Brett Mitchell
As a wave of greenwashing and impact washing swept across a number of industries, Intrepid realised the need for greater transparency and accountability on environmental impact, opting to pursue B Corp Certification.
"B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency and legal accountability to balance profit and purpose," Mitchell explains.
At the start of 2022, there were more than 4,500 Certified B Corporations across 79 countries and over 150 industries. Another useful measure is the A-List compiled by not-for-profit CDP.
In this year's list, 272 companies worldwide – worth US$12 trillion in market cap – were highlighted for their environmental leadership based on their level of transparency and performance in the areas of climate change, forests and water security.
A compelling case
The business advantages of taking this path are compelling. Research has shown that companies that publish their environmental data consistently and on an annual basis can in fact reap numerous benefits.
These include protecting and improving their reputation, getting ahead of regulation, boosting their competitive advantage as well as the chance to uncover risks and opportunities, track and benchmark progress and get access to lower costs of capital.
Mitchell sees the benefits for Intrepid as "embedded purpose for the future" and an opportunity to engage with stakeholders about environmental and social impact.
"We deepened our dedication to making positive environmental and social changes and discovered we really do change the way we see the world by creating positive impact for our customers," he says.
"It also helped us to show that we are a diverse and inclusive business, helping us to attract talent, tell our brand story, and set new goals."
There is a financial uptick too. The Stoxx Global Climate Change Leaders index, based on CDP’s A-List, has seen an average annual return 5.8 per cent higher than its reference index over the past eight years.
"The benefits of strong alignment are improvement in net present value, driving down opex, and of course a reduction in emissions." – Rob Fowler
Partners in Performance – an organisation that helps clients move from planning to real performance improvement in emissions – has seen similar results in the clients it works with.
"The benefits of strong alignment are improvement in net present value, driving down opex, and of course a reduction in emissions," Partner Rob Fowler explains.
"We have seen these results in the work we do with our clients. We have helped clients mitigate 36 Mtpa CO2 in the past 18 months and are committed to grow this by 30 per cent year on year over the next five years."
Yet while some companies are excelling and many more are stepping up their game, others are still refusing to disclose their metrics.
There are more than 125 million companies in the world, so those embracing this form of accountability represent a mere drop in the ocean.
CDP reported that 16,870 companies worth US$21 trillion in market cap failed to respond to the request for information from their investors and clients, or provide sufficient information in their response.
To enact real change, more companies need to get on board. So what is holding them back?
The lack of transparency is partly due to a lack of cohesion, according to Fowler. "We’re in a race to net zero. Many companies are building on their own concepts and pathways, independent of their peers, which leads to a lack of collaboration and integration," he says.
"The lack of collaborative thinking among peers is also contributing to an overall lack of trust, which potentially becomes a deterrent for transparency.
"The interplay between stakeholders, government, society and employees is complex. And while we are in a race, we must tackle this as a collective and have a solution to solve for the complexities."
Also confusing is the sheer number of certification schemes, making it hard to know which one to go for, according to Mitchell. "There are currently over 180 sustainable certifications available in the tourism industry, and there are even travel providers that create their own," he says.
"This makes it incredibly difficult for consumers to differentiate which ones are trustworthy or legitimate."
Another issue is the lack of an effective standard of measurement – something Singapore-based climate technology firm GAIT is seeking to address.
"Climate change is the biggest challenge of our time and at the very heart of the climate crisis is transparency," Founder and CEO Saurav Bansal says.
"Only by realistically reporting and evaluating the ways and degrees in which businesses and governments are impacting the environment can we begin to tailor our solutions to effectively and systematically address the damage."
"Many companies are building on their own concepts and pathways, independent of their peers, which leads to a lack of collaboration and integration." – Rob Fowler
"Nevertheless, the lack of a singular accurate, transparent, verifiable and consistent standard of measurement has resulted in an overall lack of transparency and accountability in the market."
He strongly believes that GAIT’s technology, which harnesses Flux Sensors, Spatial Data and GAIT’s proprietary Artificial Intelligence and Machine Learning Engine, enhances transparency by "providing the world’s most accurate measurement of carbon emissions".
Indeed, with more calls to disclose such information, a new age of accountability is upon us.
Governments are setting new standards for environmental reporting in a bid to stamp out greenwashing and ease the transition to a greener economy, with companies like Intrepid advocating within their own industries.
Essentially, this means that companies that decline to report their environmental information are going against a "tide of change".
"These companies are not only putting the planet at risk, but also themselves." – Dexter Galvin
"It is fantastic that more businesses are disclosing their impact every year and recognising the interconnectedness of environmental issues," Dexter Galvin, CDP Global Director of Corporations & Supply Chains, said in a statement.
"We now need to see even more ambitious action on climate, and more businesses stepping up on other areas of natural capital – 17,000 corporates failing to even take the first step and report their environmental data is far too many.
"These companies are not only putting the planet at risk, but also themselves. If they continue with business as usual, they will end up on the wrong side of public opinion, regulation and investor sentiment. And scrutiny is rising – empty targets or greenwash simply won’t fly."