People cross the road on London Bridge during the morning rush hour, with the City of London’s financial district in the background, in London, Britain, April 13, 2023. REUTERS/Henry Nicholls
LONDON – British businesses are struggling to meet their sustainability goals due to rising energy prices, costs associated with international trade barriers and the impacts of the COVID-19 pandemic, a survey showed on Thursday.
Almost three quarters of the more than 500 business leaders questioned said their firms had been forced to compromise on their sustainability efforts, the Chartered Institute of Procurement and Supply (CIPS) said.
Higher energy prices and other rising business costs were the main reason, cited by 61 percent of respondents as causing a drag on their sustainability efforts, while 42 percent mentioned the impact of the pandemic and 40 percent said the cost of trade barriers such as Brexit and U.S.-China relations had affected their goals.
“The unprecedented disruption in recent years has led many businesses to focus on just keeping the lights on,” said David Taylor, chief operating officer at CIPS, which represents procurement and supply management professionals globally.
The research was conducted April 6-11, with at least 250 of the executives from large businesses with hundreds of employees.
Investors, as well as consumers, are increasingly drawn to companies which can demonstrate improved alignment with environmental, social and governance goals such as lower carbon emissions or reduced wastage in supply chains.
CIPs said only 12 percent of business leaders said they incentivize suppliers to achieve sustainability targets despite 85 percent believing they will fail to meet those targets without supplier commitment.
The British government has sought to position itself as a hub for sustainable finance with a target of becoming the world’s first net-zero aligned financial center.
In December, Britain paused its taxonomy for guiding companies on green investments, saying it was a complex exercise linked to multiple sectors of the economy.
Taxonomies set out conditions for labelling an activity “sustainable” and help to outline what is and is not a green investment in order to stamp out “greenwashing”, where organizations overstate their environmental credentials.