When business leads: Lessons from the climate policy trenches
This is a guest article written by Eliot Whittington, Director, Corporate Leaders Groups, Cambridge Institute for Sustainability Leadership
Much of the emphasis on sustainability focuses on businesses’ environmental and societal impact, but operational changes and good intentions alone are not enough to solve the climate crisis and broader sustainability challenges.
Even the most committed businesses hit a wall because they operate in a system that rewards short-term thinking and fails to place a high enough value on the societal and environmental cost of products. In the current system, a company could invest millions in clean technology or fair labour practices, only to be undercut by competitors externalising these costs.
These businesses understand that voluntary action has limits and that systemic problems require systemic solutions that only governments can provide.
This underlines the need for green businesses to engage in policy and help build frameworks that level the playing field — like carbon pricing, supply chain transparency rules, or environmental standards.
Smart regulation doesn't stifle business; it creates consistent rules that reward innovation and responsibility while preventing a race to the bottom.
20 years of influencing green policy
The Cambridge Institute for Sustainability Leadership (CISL) has just marked two decades of leadership in driving green policy via its Corporate Leaders Groups. Formed in response to calls from then UK Prime Minister Tony Blair in 2005 and leading businesses who wanted to drive forward collaboration and ambition in green policy, CISL set up groups in the UK and Europe.
Building on this we inspired the creation of similar groups in Asia and Latin America, and have just set up an African group with chapters in South Africa and Kenya.
Governments need to know that the work to deliver the speed and scale of economic change needed to address climate change is backed by businesses. Private sector investment, innovation and energy can make or break policies designed to unlock the economic transition.
Too often, the dialogue between business and government is held hostage by those who want the lowest-common-denominator approach – otherwise known as a recipe for inaction and delay.
The CLGs have been one key voice countering this, helping policymakers and politicians know that there is significant and material support for the transition. They also directly help shape policies towards a shared goal, rather than filtering messages through the special interest of trade groups.
CISL’s CLGs were never alone but in recent years the business focus on responsible policy engagement – where they use their public affairs capabilities to shape markets for long-term economic benefits rather than short-term interests – has dramatically ramped up.
More and more businesses see the need to avoid deadlock and delay and, instead, work with governments to shape policy and drive the green transition.
This can deliver for multiple parts of the business - One lesson learnt over our 20 years of work is that, when sustainability and public affairs teams work together, companies can become far more effective at shaping policies that actually work.
Instead of just defending against new regulations, these businesses can help design frameworks that drive innovation and create competitive advantages for responsible businesses.
The companies getting this right aren't just managing regulatory risk—they're helping write the rules for a more sustainable economy.
Businesses need to speak up
In a time where security, cost of living and competitiveness are driving factors for decision-makers – and green policies are sometimes in the firing line – it’s clear that the need for businesses to demonstrate support for climate action remains.
The case for speaking up in support of policies that drive an ambitious and credible transition is more compelling than ever. The growing list of damage caused by climate change shows what’s at stake and the huge potential of innovations like renewables and electric vehicles shows what’s possible.
However, political backlash and economic headwinds have made engaging with governments riskier and more complex.
Moving forwards, there is a way to make progress through these headwinds. We must show the people making the decisions – and those electing them – what needs to happen in more accessible, meaningful ways.
There is huge value in the transition – including in revenue and job creation – and we need to show the value in the actions required, build broader coalitions so businesses can speak up en masse, and ground the discussions in practical and specific actions.
We can’t pretend that the context is not harder. But we can’t allow inaction to be the response. The case for building the partnership for action between government and business remains and is stronger than ever.
Read the CISL CLGs 20th anniversary report: Activating Business in an Age of Disruption
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