In a time of so much uncertainty and challenge, focusing on social impact might seem secondary for businesses. But in fact, looking beyond short-term shareholder value to societal goals is essential. Multistakeholder capitalism will play a critical role in helping society navigate the crises we face today and prepare for a stronger future.
At BCG, we believe that making a difference in society is an essential part of corporate strategy and value creation. Employees, customers, investors, and governments care deeply today about solving societal challenges. As a result, embedding solutions to those challenges into the heart of a company’s business model can yield outstanding long-term value creation. And when social impact is profitable, it’s scalable. It’s a cycle that benefits us all.
This belief is core to our own operations, as well as to the work we do with our clients. Among the many areas where we seek to make a difference, one of the most central is fighting climate change and protecting the environment.
Positive Momentum Is Only the Beginning
Climate change is not a future threat. We are already at 1.1°C above preindustrial levels, and many parts of the world are suffering from the destructive effects of that increase: more frequent and dangerous fires and hurricanes, flooding, and longer-lasting and more widespread drought. Without bold measures to reverse this dangerous trend, we can expect severe consequences—with the planet’s most vulnerable populations bearing the brunt of the damage.
As of today, 189 countries have ratified the Paris Climate Agreement, more than 50% of world GDP is generated by countries that have made net-zero pledges, and many companies have announced ambitious climate goals. This accelerating positive momentum is worth acknowledging and is evidence that we can still win this fight. But we must also recognize that we are just starting and that there is much more to do.
To address the urgency of the challenge, we need public-sector action to be bolder and more widespread. We also need the powerful influence and action of both corporations and investors. With that three-pronged approach, we can make the transition to a zero-carbon economy in energy, industry, transportation, land use, and infrastructure in an economically viable way.
Good for Our Clients, Good for the Planet
To be credible as we support our clients and global institutions, we believe it is important to walk the talk at BCG. We are therefore pursuing a climate and sustainability agenda on two fronts.
First, BCG has pledged to reach net-zero climate impact by 2030. We will do this by reducing our carbon footprint and permanently removing any remaining emissions through nature-based and engineered solutions. We expect to spend up to $80 per tonne CO2 equivalent on this effort.
Second, we firmly believe that in helping our clients pursue strategies aimed at limiting global warming to well below 2°C, we enable their long-term value creation potential. We are therefore investing $400 million over the next decade in the climate and environmental work that our teams do across governments, industries, NGOs, and coalitions.
As we work toward our climate goals, we will view our efforts and work holistically. The transition to a zero-carbon economy, and the effects of a changing climate as that transition takes place, will affect populations differently across the world. We will work to ensure a just transition, so that those affected most by the changes to come are taken care of.
Engaging Where Change Is Hard—and Needed Most
Our relationship with our clients brings social responsibility. We have the capabilities to work with and support clients in sectors where abatement is most difficult or where emissions are greatest. We feel it is our role to help them find solutions that will spark the greatest change and speed up progress toward net zero. By partnering with all those willing to take on the challenge, we have a key seat at the table in making sure real progress happens.
At BCG, we believe that now is the time for bold climate and sustainability leadership, with business stepping up along with, and sometimes ahead of, government. Again, it’s the right move not just for the good of the planet but for the long-term sustainability of corporations.
The transition to a more sustainable economy will be transformational, affecting the types of fuel and packaging that organizations use, the equipment they own, the methods they use to dispose of waste, and the regulations and policies that influence their operations. Some companies will need to shift their core business or portfolios entirely. Those that act early will have a competitive advantage. Those that delay may find themselves playing catch-up in an era of sustainable-resource scarcity, locked out of materials, technologies, and talent in the near term.
Tackling climate change is of strategic importance across all industries, within the public sector, and throughout corporate investing. Organizations that embed this thinking into their core strategy will find sustainable opportunities for growth.
We understand the complexity of this issue, and we’re learning as we go. But with a climate and sustainability agenda as our North Star—a key lens for all our engagements—we know we can help organizations ensure a sustainable future for themselves while they secure the future for our planet.