It can take decades to build the desired reputation and the press of a button to destroy one. From Financial Services to Fast Moving Consumer Goods (FMCG), firms are beginning to see the perception of their climate image as a critical component of their business proposition and key to attracting employee talent, consumers and investors.
In 2015, the Task Force on Climate-Related Financial Disclosures (TCFD) set up by the Financial Stability Board (FSB) developed voluntary, consistent climate-related financial disclosures for use by companies, banks and investors in providing information to stakeholders.
It was thought that increasing the amount of reliable information on firms’ exposures to climate change would highlight potential dangers and opportunities, consequently strengthening the global economic system and facilitating the transition to a lower-carbon economy.
Why should firms manage their climate image proactively?
Shifts in consumer preferences are precipitating climate image as an important factor that influences how consumers and investors are making choices about firms. The change in sentiment towards climate issues is driving firms to consider how to proactively manage their public climate image and avoid potential damage to their reputation that comes with environmentally controversial activities or partnerships.
Social media and digital news channels create a platform for consumers, employees, investors and others to scrutinise and discuss how a firm is perceived to be supporting climate-related action, how it is reacting to policy or technological developments to support the transition to a lower-carbon economy, or who the firm chooses as its partners and suppliers.