The leadership challenge of a generation: How do we grow the business without growing carbon emissions?

Growth is one of the key indicators of success for most businesses. Though the measures vary – revenues, profitability, customers, products and services, satisfaction levels – growth is why we’re in business. But what happens when positive growth has a negative impact on sustainability goals?

Such is the case for many businesses today. With more employees back in the office, business travel resuming and big events back on the agenda, carbon emissions are bound to rise unless we do things differently.

The question is how? In my conversations with CEOs and Chief Sustainability Officers (CSOs), the intent is there. Executives understand the science. They’ve committed to targets, they’re developing plans and they see the opportunities. But this hasn’t been done before, at this scale.

How can market-leading growth be achieved at the same time as reducing absolute greenhouse gas emissions? That’s the critical question for this generation of leaders. And it’s one that will define all our futures.

EY teams are on this journey, too

Let’s have a look at the numbers, using the global EY organisation as a case in point. On 21 September EY published its global revenue figures for FY22. It’s a positive story, with US$45.4b in revenues, a 16.4% increase on the previous year. EY headcount has risen, with 133,000 new people coming on board in the last year, bringing the total number of EY people to 365,000 around the world.

At the same time, EY is delivering on its sustainability commitments. In October 2021 we reached a major milestone in our carbon ambition – we are now carbon negative across the globe. To reach net zero in 2025, we will continue to deliver on our seven-point plan to reduce emissions in line with a 1.5°C degree pathway validated by the Science Based Targets initiative (SBTi)*. The EY plan is to reduce total global emissions by 40% by FY25 (from our FY19 baseline), which includes reducing business travel emissions by 35%.

In FY22, our CO2 emissions totalled 597k tons (tCO2e). While this represents a 52% reduction compared to FY19 (the year of our baseline), it also reflects a 56% increase from FY21, a year of historically low travel emissions and office electricity use due to the global pandemic.

One of the key questions we are tackling is to what degree we need people to travel in order to maintain and protect our global culture. We see one of our key strengths as the way in which people work and collaborate across geographical lines, to innovate and share ideas. How do we find the right balance?

Here’s the thing: I alone don’t have the answer. EY alone does not have the answer. No individual standalone organisation has the answer because sustainability and decarbonization are unprecedented challenges that the world has never tried to solve on this scale before. There is no option but to rise to the challenge – and we will get there faster by collaborating and sharing ideas. ?

Collaboration is key

We have a saying at EY: sustainability is everybody’s business. We won’t get there alone. I’m encouraged by the honest and open dialogue taking place amongst companies working to address sustainability and decarbonization. We absolutely need that willingness to share what’s worked and what hasn’t, what’s had real impact, in order to scale and industrialize solutions in time.

That was the thinking behind Sustainability 30, a forum comprising Chief Sustainability Officers (CSOs) from some of the world’s most influential companies. It was launched in 2020 after His Majesty King Charles III (then HRH The Prince of Wales) called on all major businesses to appoint a CSO to accelerate business action on sustainability, and was followed in 2021 by the Terra Carta, which provided a set of principles that puts nature, people and planet at the heart of global value creation.

EY engages with a wide range of standard setters on the measurement and reporting of sustainability, including the Science Based Targets initiative (which validated our pathway in 2021) and the Taskforce for Nature-Related Disclosures (TFND). We are proud to be actively contributing to the development of TFND’s first nature-based disclosures framework. EY is working with leading partners, like IBM, Microsoft and SAP, to drive innovation and help clients solve new business challenges related to sustainability, in areas such as energy transition and decarbonization, stakeholder and risk management, ESG ratings management, regulatory compliance and external reporting.

It’s encouraging to see new collaborations announced all the time. Sometimes this results in new, more sustainable products and services to meet customer demand. Sometimes it’s entirely new business models such as car sharing and fashion rental, which generate profits from idle assets and save customers money.

Sustainability is proving to be an opportunity to protect and create value for business, its people, suppliers and communities. By embedding sustainability into business strategy, I believe we can work together to make the planet more sustainable. That’s a future in which we can all thrive.

* EY’s net-zero pathway was validated by SBTi in 2020. We continue to follow the latest SBTi developments on net-zero standards.

?The article reflects the views of the author and does not reflect the views of the global EY organization