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How should business approach carbon neutrality? - How do we engage with our key stakeholders? - EY - Global

How should business approach carbon neutrality?

How do we engage with our key stakeholders?

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“It comes back to hearts and minds. You’ve got to win the argument about doing this, and you’ve got to have the leader out front on this.” - EY’s James Close

Stakeholders are an important consideration for a decision to go carbon neutral.

Management

A firm’s management team needs to sign off the relevant investment for the initiative and set the tone from the top, which is crucial to drive the project internally.

Shareholders

Regardless of how closely this fits with a firm’s overall strategy, most firms may face external shareholders with entirely contradictory views when it comes to carbon neutrality, from environmentally conscious stakeholders pushing for a tougher line, to others who might consider it a distraction from the core business.

The most important consideration for firms is to ensure they engage in dialogue, explaining how the strategy is being developed, to test assumptions and identify potential issues before it is implemented, as part of a detailed and robust stakeholder communication plan.

Customers

Evidence is mixed on the overall appeal of carbon neutrality to customers. In many markets, varying degrees of skepticism remains over climate change, so firms need to take this into consideration too.

Many argue that consumer awareness will rise over time, with related shifts in purchasing decisions as a result.

Partners and suppliers

Depending on the scope of neutrality that is being targeted, and the nature of the business, suppliers play a significant role in achieving the target. Some suppliers may be asked to play a deeper role, which may not fit with their strategic objectives.

The challenge lies in explaining to suppliers why this target is being set, and why suppliers should get involved in it too.

Employees

Seeking to go carbon neutral affects all employees, so keeping them involved is crucial. It’s also a powerful engagement tool, in which staff can be empowered to make a significant contribution.

It is important to strike a balance on how such initiatives are communicated to staff. While many may be enthused by progress on such a scheme, some may hold a view that the money could be better spent elsewhere.



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