Local businesses who take small steps today to minimise the negative impact they have on the climate stand to profit more and spend less than those who aren’t yet prepared to change, according to Danske Bank.
Speaking on the latest Danske Bank Advantage podcast, Chris Martin, Danske Bank’s Head of Climate Risk and Strategy, said companies in Northern Ireland can’t afford to think climate change is a problem that doesn’t directly impact them.
“Climate change has been talked about for a while, but it has started to be understood that this is not just something that affects people in other parts of the world, we’re starting to see its impact locally within Northern Ireland, both for individuals and businesses,” he said.
“NI is an SME economy – many of our businesses are involved in supply chains providing goods and services to people in UK, Europe and beyond. With the climate agenda growing and governments around the world asking very direct questions to big businesses about their climate plans, even smaller businesses here in NI who didn’t think this really impacts them, will soon need to demonstrate their own credentials very clearly.”
Chris noted that developing a green and sustainable strategy that reduces environmental impact has direct implications for profits. For example, he points out that as fossil fuels are phased out and carbon taxes increase over time, business owners will need to think differently about how they power their offices, their factories and their manufacturing facilities.
“That will take time to adapt to but businesses who are on the front foot and are planning for it will minimise the impact on their profitability in the long term, whereas those who wait too long will potentially have to spend more money in a shorter timeframe to make those changes,” he said.
Also speaking on the podcast was Géraldine Noé, Head of Environmental Sustainability at Business in the Community NI, who advised companies that their first step is to understand the impacts they have on the climate before starting to make a plan to address them.
“We are used to seeing impacts at the other end of the world – extreme weather events like the fires in Australia – but climate change is already having an impact in NI too, where we’ve already seen an increase in storms, flooding and even heatwaves. Thinking this only happens at other end of the world is not the right way to approach this,” she said.
“Where we will start to see this affecting business is in the supply chain as many of our businesses are not operating only in NI, they source products from other countries and export everywhere. That means any instability relating to extreme climate events has real repercussions here. To understand how they should respond, the first step is to really understand what your impacts are.”
Danske Bank achieved the highest rating in Business in the Community’s annual NI Environmental Benchmarking Survey, and has signed the Climate Action Pledge for Northern Ireland, committing to significantly reducing its greenhouse gas emissions by 2030.
The bank is part of a campaign steering group of Climate Champions made up of leading NI business representatives. Together they are working on a Business Action on Climate campaign to address the climate crisis. A cornerstone of the campaign, the Climate Action Pledge, invites signatories to commit to cut their greenhouse gas emissions by 50% or 30% by 2030, ahead of the UK government trajectory to achieving Net Zero by 2050.
Chris Martin added: “If we’re honest, we’re all still in the early stages on the climate journey, but that creates a real opportunity to collaborate and work together. We at Danske Bank think we have an important part to play in helping NI businesses adapt to the net zero future as an enabler and we want to encourage businesses think about climate strategies now.
“The Covid-19 crisis has shown that it is possible to completely change the way we live and work. Those businesses who don’t just see climate action as a risk but as a growth opportunity, those are the businesses who stand to reap the rewards that will come in future.”
You can listen to the full podcast here.
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