The path to sustainable operations never did run smooth and the complexity of the challenges faced by businesses in all sectors were laid bare at last month’s Growing Solutions: Cultivating Carbon In-setting Strategies, organised by Chambers Wales. The event was held on 16th July at Cardiff School of Technologies and featured attendees from across the Welsh business landscape. Together, they discussed strategies to use technology and new processes to decarbonise, ensure sustainability across the supply chain and make sustainability a market differentiator.

When it comes to embedding sustainable ways of working into the business model, the issues inevitably vary significantly from sector to sector. However, there were certainly common themes that emerged during the discussion.


Knowledge gap

A lack of knowledge, particularly along the supply chain, is a complicating factor when trying to embed sustainable practices across the entire value chain. Sourcing low-carbon materials, understanding the need for low-carbon materials and practices (particularly if there is a conflict between sustainability and cost), and understanding of the carbon input of particular ways of working, are all knowledge gaps with which socially conscious businesses must contend. For example, though there may be widespread awareness, at least notionally, of the environmental impact of industrial processes, the data consumption of data centres powering new technology such as artificial intelligence, is less widely considered.


Out with the old   

Embedding sustainable practices often means adopting new ways of working, and businesses frequently find there is work to be done to overcome the perception among stakeholders that traditional methods and technologies are more reliable and therefore safer.


Bigger = better (at lowering carbon footprint)?

Bigger companies have greater resources and latitude to invest in materials and processes that yield more sustainable outcomes. It is often more challenging to gain traction among the SME sector, which often faces greater pressure on costs. Human Resources are also an issue for this group of companies, who may not have a dedicated sustainability manager to take on ownership of this work, for example.

“When it comes to sustainable culture, there is often a disconnect between those who are doing the investment and those who are seeing the savings. We are here to support sustainability-forward companies who want to embed sustainability into their supply chains” says Declan Goodwin, our Acuity Law Commercial & Technology partner.

But reluctance often comes from larger businesses too, who may be wary of increased burden at the planning stage. Whereas larger organisations can be tied by red tape, smaller businesses can be agile enough to adapt quickly.


Solutions

Businesses are increasingly concerned with monitoring and measuring scope 3 emissions. So what can they do, particularly when the carbon emitter is a supply chain company and not their own enterprise?

  1. Communicate. Where possible,make sure that everyone is completely clear about the need to map how their processes and products contribute to the carbon footprint – even in less obvious ways, such as data usage.
  • Find the financial driver. Costs speak louder than words, and when energy use mounts up, so do the bills. If there are savings to be made using renewable energy (and many firms are rapidly coming down in price), communicate this where possible. Small savings in energy use can become bigger savings as a company begins to see the benefits.
  • Try to get the data. Data capture can be difficult, particularly in sectors that use a high proportion of contractors. But the presence (or absence) of good data can be a useful health check on a business. 
  • Digital twinning. This is the application of adigital or virtual replica of a physical object, system, or process. The digital model mirrors its real-world counterpart, enabling monitoring, simulation, analysis, and optimisation. The concept of a digital twin is often used in industries like manufacturing, aerospace, healthcare, and smart cities to enhance decision-making and improve efficiency. Sign into My Digital Lawyer for a real-life case study of digital twinning provided by Acuity Law Alliance Partner Auditel.
  • Embrace cleantech and technology to understand and communicate the benefits of energy efficiency.

“In the consumer space, a lot of tech companies are developing tools to help consumers make decisions. There is a need to show the consumers that they will save a lot of energy and it will cost them a lot less before they commit to purchasing new equipment,” says Declan.

“This also applies to the skills piece – technology solutions are increasingly being developed to upskill people – for example, to help plumbers select and install the correct heat pumps.”

“In The Chancery Lane Project, lawyers have come together and drafted all the clauses you would ever need to include sustainability. It’s about encouraging clients to consider adding these sorts of obligations to their contracts,” explains Declan.

“When our clients ask us to draft a contract, we ask if they want to include any terms regarding sustainability requirements. If they do, we use clauses from Chancery Lane Project.”


For more information on drafting sustainability clauses, Sign up to My Digital Lawyer to access our Knowledge Bank of legal guidance or contact our Commercial & Technology team. To discuss your Environmental, Social & Governance obligations and reporting requirements, contact our ESG team.