7 minute read 25 Jan 2021
EY - River flowing through green fields at sunset

Why it’s a defining moment for climate change – and the time to act is now

By Hywel Ball

UK Chair and UK&I Regional Managing Partner, Ernst & Young LLP

UK Chair and UK&I Regional Managing Partner. Leading our 17,000 people in the UK. FTSE 100 audit partner. Father of three and Welsh rugby fan.

7 minute read 25 Jan 2021

As action on climate change becomes ever more pressing, EY is rising to the challenge and helping others to do the same. 

In brief:

  • The seriousness and scale of the risks posed by climate change highlight the need to accelerate change.
  • EY has made a global commitment to become carbon negative in 2021 and commit to be “net zero” in 2025 by removing and offsetting more carbon than we emit and reducing our footprint to residual emissions.
  • We are increasing our investment in services and solutions that will help organisations transition to a low carbon world and create value from sustainability.

Our new global commitment to become carbon negative in 2021 and to significantly reduce emissions to achieve net zero in 2025 reflects the fact that climate change is one of the defining issues of our time – and we must all step up our response.

We hope that by publicly declaring our actions, both globally and in the UK, we can encourage others to do the same, thereby multiplying the effect.  

Until recently, some may have questioned why EY should be taking the lead on climate change as well as focusing on other non-financial issues such as social inequality, diversity and inclusion.

The answer lies not only in the current COVID-19 crisis, which has forced a collective and reflective pause on society, but stems more deeply and directly from our purpose as an organisation.

That purpose – Building a better working world – means more to us than helping individual businesses respond to disruptive forces. It also means acting to make the world as a whole work better. Clearly, this cannot happen without concerted action on climate change. 

There is no such thing as a long-term investment on an unsustainable planet.
Hywel Ball
UK Chair and UK&I Regional Managing Partner, Ernst & Young LLP

From short-term thinking to long-term value

The COVID-19 pandemic has demonstrated society’s ability to work collectively to find solutions. It also highlighted the importance of long-term resilience over short-term thinking and the need, beyond the pandemic, to seize the opportunity to build back more fairly.

The good news is that businesses are increasingly aware of their environmental impact. Many now recognise that, rather than a trade-off between doing good and making a good return, the two actually align, with long-term value the common aim. Or, to put it more simply, leaders are increasingly seeing that there is no such thing as a long-term investment on an unsustainable planet.

So, with commercial, societal and environmental objectives becoming more aligned, the stage is set for new ways of doing business that deliver to all stakeholders, including our planet.

At EY, we are not only committed to helping businesses rise to this challenge, we have the experience and capabilities to help them.

We have long understood the link between sustainability and long-term financial value, leading the way in our collaboration with the Embankment Project for Inclusive Capitalism (EPIC) and putting our experience to good use by helping businesses and government to achieve their sustainability goals. We are committed to achieving our own environmental aims, as well as helping others as they seek to transition to a low carbon world. 

Our own commitment to addressing climate change

In any walk of life, it is vital to practice what you preach. At EY, we have been using renewable energy in our UK offices since 2007. We have also significantly reduced our consumption of single use plastic items – usage dropped by 91% in the first eight months of our project – and have already reduced the waste we send to landfill by 99.8%.

Last year, we made a further step forward through an innovative and eco-friendly 10-year zero carbon Power Purchase Agreement (PPA) with Lightsource bp. This will ensure that most of the electricity EY uses in the UK is zero carbon.

Globally, we recently announced our commitment that EY will be carbon negative in 2021. We will achieve this by significantly reducing our absolute emissions, and then removing or offsetting more than the remaining amount of our emissions, every year. In the new sustainability statement published today, EY sets out the seven key components of our plan to not only become carbon negative but to reduce total emissions by 40% and achieve net zero in 2025 by removing and offsetting more carbon than we emit and reducing our footprint to residual emissions.

Sustainability is one of the most significant and generation-defining issues that the world faces today and it’s important that all businesses play their part in tackling these challenges.
Hywel Ball
UK Chair and UK&I Regional Managing Partner, Ernst & Young LLP

Our role in supporting others to think and act green

EY has a privileged position as a trusted advisor to many of the key stakeholders – from institutional investors to global enterprises - who can make a difference to climate change. We have a responsibility to help safeguard and grow their interests, while also considering the long-term value that they can create for everyone that they impact. This must include a point of view on climate change.

The seriousness and scale of the risks posed by climate change highlight the need to accelerate change as the UK transitions to a low carbon economy. It’s going to require more than awareness and aspiration: action, new ideas, business models and technology will be needed. Employing 17,000 people in the UK & Ireland, across sectors and skills, EY can play a crucial role by not only making changes to our own business, but also supporting our clients as they make changes to theirs.

The opportunities available to companies who commit to reducing emissions cannot be ignored.  More sustainable business models should help create greater long-term value for all stakeholders, including shareholders, employees and consumers as sustainability and transparency issues rise up their list of priorities.

How we are helping

At EY, we are increasing our investment in the services and solutions that will help organisations transition to a low carbon world.  This includes a significant increase in investment in our Climate Change and Sustainability Services capabilities, together with our Strategy, Consulting and Tax Service Lines.

We are using the experience we have gained from our own carbon negative transition and our industry insights to discuss with our clients and wider industry which behaviours need to change, what this means for the status quo and the value that can be generated from making this change.   

From an investor perspective, we understand that without reliable climate-related financial information, investors cannot price climate-related risks and opportunities correctly. This is creating the need for companies to improve disclosures in this area, and we are working to help businesses better identify risk and measure non-financial performance.

Through our work with investors and corporates, and our leading role in global sustainability initiatives – including EPIC, Stewardship Reporting, the World Economic Forum (WEF) and Climate Action 100 – we can help clients identify practical solutions, embed sustainability throughout their organisation and deliver against clearly defined outcomes.

Looking ahead to a cleaner future

The science is conclusive: we face significant and irreversible human-made changes to the climate. Action is urgently needed if we are to limit the global temperature increase to 1.5°c above pre-industrial levels, in line with the Paris Agreement.

EY is taking action and supporting others to do the same. While we acknowledge the progress being made – 10 years ago few could imagine an oil major committing to a zero-carbon future through a transition to clean energy – it is important to understand the size of the challenge ahead. Only by all working together – and sharing knowledge and experience – can we successfully build a better working world.

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Summary

EY is committed to taking a lead on climate change, as well as focusing on other non-financial issues such as social inequality, diversity and inclusion. We have made a global commitment to become carbon negative in 2021 and will work with businesses to identify practical solutions to embed sustainability throughout their organisation.

About this article

By Hywel Ball

UK Chair and UK&I Regional Managing Partner, Ernst & Young LLP

UK Chair and UK&I Regional Managing Partner. Leading our 17,000 people in the UK. FTSE 100 audit partner. Father of three and Welsh rugby fan.