Business is booming.

Companies Need to Rethink Climate Change Targets to Meet Deadlines

By Yemi Olakitan

A recent study from Imperial College Business School suggests that in order for businesses to effectively reduce their carbon footprint, they need to adopt new ways of thinking.

Dr. Simone Cenci and Matteo Burato of the Leonardo Centre for Business on Society at Imperial College Business School carried out the study, which examined how organizations currently approach climate change and how successful they are at matching their emissions with international climate targets.

They collaborated with Dr Vincenzo Vastola of Montpellier Business School and Dr Samuel Tang of University College London’s Institute for Sustainable Resources.

The researchers examined data on climate change action collected by the Carbon Disclosure Project (previously known as the CDP), a well-known worldwide non-profit that regularly gathers data through
questionnaires about an organization’s carbon management practices and results.

Between 2012 and 2020, they examined data from 622 sizable publicly traded businesses operating in 32 nations in the energy, industrial, material, and utility sectors. They looked at supply chain procedures, product development, emissions reporting, and targets for greenhouse gas emissions.

Dr. Cenci and his associates propose that adopting a “system thinking” mentality is the solution. The study of system thinking focuses on how people can relate events to one another and to their own experiences
by drawing connections between them. This enables individuals to recognize the consequences of their own acts and modify their behavior for the better.

Research has shown that developing particular cognitive skills, such system thinking, is necessary for people to be able to comprehend the effects of climate change and modify their own behaviors to combat it.

The findings showed that organizations with a history of system thinking were able to report lower greenhouse gas emissions and achieve better environmental outcomes than other organizations with comparable asset characteristics and policies in place.

According to the research, organizations must integrate Organizational System Thinking into their fundamental procedures and roles in order to tackle climate change more successfully.

Companies can have a more genuine and significant impact by aligning their emissions pathways with the climate targets of the Paris Agreement, as per the research, by acknowledging that their operations are frequently not in line with their own and broader sustainability goals, and are influenced by various societal and environmental factors.

Additionally, because they understand that their own interaction with the outside world is dynamic, individual system thinkers also understand that the solutions they implement require ongoing revision and modification.

According to Dr. Cenci, such a strategy would provide organizations the adaptability and initiative that many of them now lack.

The Agreement in Paris

Although system thinking training has already been included into curricula by governments worldwide, the researchers argue that business leaders should take these findings seriously.

Regulations designed to encourage system thinking in businesses may give organizations the much-needed push they need to adopt more sustainable practices.

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