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Reporting environmental impacts is all well and good, but do companies really know their planetary boundaries?

· planetary boundaries,social thresholds

In the US state of California, the drought that has gripped farmers, businesses and homeowners grinds on into its fifth year and is the worse such event in 500 years. Recent reports have found that, since 1970, over 50% of global wildlife has been lost. Whilst last month it was found that, for the first time in 4 million years, carbon dioxide levels at the South Pole were above the threshold of 400 parts per million. What has become clear is that we are rapidly approaching the limits and thresholds of our planet’s support systems.

Our new Planetary Boundaries Research examines just how effectively companies are engaging with the concept of planetary limits, as defined by Johan Rockström et al – that once human activity has reached a tipping point beyond the limits of our climate, our oceans, or our water, for example, there is “a risk of irreversible and abrupt environmental change”.

We interviewed a range of companies across different sectors and found that more and more companies are referencing or alluding to planetary limits in their non-financial reporting. However, no companies that we identified make explicit reference to planetary thresholds or boundaries. And there is a key difference between understanding ‘limits’ and ‘thresholds’. Limits implies that, as we get closer to the supply of, say, diamonds, running out, their extraction and sourcing will become more expensive and an alternative may have to be found.

Thresholds is different. Once we go beyond the tipping point, there is no coming back and there isn’t a market model to salvage the situation. And very few companies are truly capturing what it might mean for their business should the world run out of specific resources, or that dangerous threshold be breached. Even fewer understand where the ‘tipping point’ might be or quantified their usage in terms of total availability. Fewer still have set targets.

And that is a problem. As those severely impacted by the Californian drought – from beer makers to farmers – will attest. Knowing how much water was available in their own catchment area would have enabled a red flag to have been waved much earlier, and massively reduced the impact on businesses now dealing with the fall out.

You can find out more about our Planetary Boundaries Research and download our report which explores how a wide range of companies are currently approaching the concept of planetary limits and social thresholds. The primary sample for the research was quantitative, drawn from publicly-available information from the latest corporate sustainability reports. For more information, and to download - click here

If you’d like to know more about how Article 13 can support your sustainable business growth by integrating people and planet into business strategy, get in touch.

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