The Race Is Heating Up
Compounding Compounds, What The Employees Think and 2040 comes before 2050
This is the third edition of Honey Drops, a curated view of what’s been happening around the world each week.
As The Ocelli Group takes its name from the bee's ocelli, those remarkable eyes that guide its flight via the sun, I felt it a natural extension for this Corporate Sustainability newsletter to incorporate their nectar’s alchemy: Honey.
Feel free to forward on to anyone who would benefit from a drop on their toast or in their tea.
3 thoughts from me
Putting the Commercial in ‘Commercial Risk’: Compounding the Planetary Boundaries
Exponential growth is something the human brain particularly struggles with. Do you know how many times a piece of paper would need to be folded to reach the moon 384,400kms away? 42 times. It’s impossible to physcially achieve, let alone visualise.
The above pearl of wisdom came to me this week via my brother from another mother, Rob McCann, and got me thinking about what the compounding function means in relation to global temperatures. It turns out compounding interest is actually a pretty helpful guide when evaluating the commercial (physical and transition) risks organisations could face, as both are inextricably tied to tipping points.
While compounding interest doesn’t provide material benefits early on in the investing cycle, over time the interest earned on the principal investment generates additional interest until the tipping point is reached, creating a snowball effect where the growth accelerates exponentially - an act of financial success celebrated by many (as shown below).
Global temperatures are heading in the same direction, although in this case, the snowball is melting and the resulting flooding is increasing the cost of goods, insurance premiums, and supply chain disruptions. Not a financial success to be celebrated by many.
Engaging Employees The Way Employees Want To Be Engaged
So, what can companies do about this? Lots. Why? Well, they have lots of employees.
We know that one of the most important initiatives a company must deliver is the leveraging of Science-based Targets to create momentum towards net zero via a genuine commitment to decarbonising business.
Thanks to a new report from employee experience platform Culture Amp, ‘An eco-work ethic? How sustainability influences employee engagement’, the importance of this commitment has now been quantified. With the symbiotic connection between employee engagement, retention, productivity and attraction of top talent well-documented, it’s easy to see the risk organisations run if they fail to deliver on their targets or don’t communicate legitimate progress to their staff.
The above article also references a 2023 survey from Deloitte of ~23,000 employees which discovered “55% of respondents reporting that they research brands’ environmental impact and policies before accepting a job, and more than 40% reporting that they already have, or plan to, change jobs due to climate concerns.”‘
The proliferation of charts like the above global temps will only compound these numbers.
“I Guess Net Zero By 2050 Is Impressive, If That’s The Fastest You Think You Can Do It…”
While much of the corporate world are wrapping their heads around net zero carbon emissions by 2050, 526 companies (covering 59 industries, 45 countries and 15.33 million employees) have decided 26 years isn’t fast enough for them, instead signing The Climate Pledge (TCP) to reach net zero carbon emissions by 2040 through regular reporting, carbon elimination and only using carbon offsets for any remaining emissions.
Started in 2019 by Global Optimism and Amazon, The Climate Pledge released its inaugural 5-Year Update this month, complete with 26 industry deep dives and case studies from companies such as Uber, Rivian, T-Mobile, Amazon, Maersk and the Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition of seven TCP signatories - Amazon, PwC, McKinsey & Company, SAP, Landsec, Salesforce, and Unilever.
”Once The Climate Pledge signatories reach net-zero carbon, BRODIE conservatively estimates that the greenhouse gases avoided would equate to more than 2.5 billion metric tons (2.5 metric gigatons) of carbon dioxide equivalent emissions annually. This is roughly equivalent to a third of the carbon absorbed by the world’s forests each year.”
That’s the impact business can have.
2 quotes from others
Leave Your Hope-timism At The Door:
“Optimism is hope with your sleeves rolled up”
- Christiana Figueres, architect of the Paris Agreement as the Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), co-founder of Global Optimism, and co-host of Outrage + Optimism.
Source: Episode #257 ‘What If We Get It Right?’
Norway Leaves EU In Its Electrified Dust
“This is historic. A milestone few saw coming 10 years ago… The electrification of the fleet of passenger cars is going quickly, and Norway is thereby rapidly moving towards becoming the first country in the world with a passenger car fleet dominated by electric cars.”
- Øyvind Solberg Thorsen, Director of OFV, the Norwegian road federation.
Source: ‘Norway: electric cars outnumber petrol for first time in ‘historic milestone’
1 thing to ponder
“The whole future lies in uncertainty: live immediately.” - Seneca
Stoicism has been popping up for me lately, reminding me to ‘control the controllables’, to strengthen my resilience to adversity and to minimise unnecessary frustrations and anxieties.
One of its core tenets is ‘Momento mori’, which translates to “Remember death”, a reminder to accept life’s impermanence, live fully, and appreciate every moment. Quite an inversion of how we’re often taught to look at the world.
How are you looking after yourself to ensure you can keep doing the great work you’re doing?
Until next week,
Dan