Read: Putting businesses in the driving seat for change

There was a clear signal from the UK Government this week that it expects businesses to play a leading role when it comes to tackling climate change.

The Chancellor announced at the COP 26 summit that financial institutions and companies listed on the London Stock Exchange will have to show how they intend to hit climate change targets.

The most notable element was that, under new Treasury rules, they will have to publish plans by 2023 detailing how they will move to a low-carbon future that aligns with the UK’s 2050 net zero target.  It will be up to firms and their shareholders to decide how they will adapt to the transition but they will have to include targets on reducing greenhouse gas emissions.  

It was a defining moment. Essentially, Ministers have indicated that they want a more formal approach which reflects the reality that businesses as well as government have a lead in driving the ‘E’ of the Environmental, Social and Corporate Governance (ESG) agenda.

But it also tells us what the direction of travel is likely to be in another important area - levelling up. This Government has not one but two key objectives - net zero and levelling up - effectively mirroring ESG in a set of political priorities for the first time ever.

Like net zero, levelling up and achieving equality of opportunity are driven not just by Government but by businesses and employers. Government has shown it understands that when it comes to climate change, many of the levers of change are outside Whitehall, in board rooms around the country. The same truth holds for achieving levelling up too.

It is easy to see Ministers considering a similar parallel approach for levelling up, the ‘S’ element of ESG, as well as net zero, the E bit. And with a White Paper on Levelling Up due at the beginning of next year, it could happen very soon.

That is why the Levelling Up Goals work of the Purpose Coalition is so important - the 14 Levelling Up Goals essentially define the distinct elements of the ‘S’ bit of ESG and provide the common framework that business needs for taking targeted and measurable action on equality of opportunity. The Levelling Up Goals architecture has already been adopted by FTSE 100 companies and major organisations like BP, Amazon, Direct Line, Centrica, UK Power Networks, the Co-op, to name just a few. Gateley plc has already issued its first corporate responsibility plan shaped by the Levelling Up Goals. And the framework is being used beyond the private sector, by public sector organisations such as NHS Trusts, the BBC and local authorities. It means they can develop plans that focus efforts on the key elements of levelling up where their organisations can have the biggest impact - whether Successful school years (Goal 2), Fair career progression (Goal 6), Good health and wellbeing (Goal 8), Closing the digital divide (Goal 10) or any of the other 14 Goals. It also enables them to work more readily with other organisations on the Levelling Up Goals they have in common and have made a priority, as well as sharing best practice on what works.

As with avoiding ‘greenwashing’ on net zero, the Levelling Up Goals are about going beyond more traditional corporate CSR - setting out clear, substantive plans for internal as well as external actions that mean the organisation itself can show how it can be a real engine of social mobility.

Using the Goals to focus on the social part of a company’s ESG strategy puts that business and organisation ahead of where the likely Government policy agenda will go.  

At COP 26 it has been clear how important it is for Ministers to be able to see all major organisations demonstrating clear plans that they are part of the solution in achieving net zero. It may only be a matter of time before Ministers are also asking them to produce similar plans on their social impact and levelling up. By using the Levelling Up Goals, it means business is getting ahead of the curve and crucially showing the leadership on levelling up that not only Ministers but also the public want to see.

By Rt Hon Justine Greening