Businesses want improved funding policy for circular processes
Lucerne/Rotkreuz - Despite the economic benefits, companies' investments in circular economy processes are falling short of their potential. As Financial Services Zug at the Lucerne University of Applied Sciences and Arts has shown in its ESG Reporting Study, companies are keen to see more coordinated regulation.
Nine in every ten companies in the German-speaking world are investing in sustainability projects. While classic compliance goals remain relevant for them, social issues and environmental factors are actually becoming increasingly important. This is an insight from the current ESG (Environmental, Social, Governance) Reporting Study prepared by Financial Services Zug (IFZ), an institute of the Lucerne University of Applied Sciences and Arts. The study was prepared in collaboration with BDO Switzerland, Talentia Software and CRIF Switzerland.
Against the backdrop of the shortage of skilled workers, occupational health and safety is becoming an increasingly important topic, according to a statement. At the same time, cutting CO2 emissions also entails financial benefits. However, although the costs of proactive management and prevention are lower than inaction and waiting, many companies are said to be inadequately prepared.
Approximately one in four companies is reporting that they are already being impacted by the climate crisis. According to study author Dr. Ute Laun, however, internal scenario analyses and resilience tests for the company’s own business model are still not widespread enough. “Risk management without climate scenario analyses is like an alarm system that isn’t activated”, the researcher explains, adding that: “If relevant climate risks are not integrated into the risk management systems of companies, it is impossible to detect the early warning signs or put in place the appropriate course corrections”.
The study identifies the implementation of circular economy processes as a key lever for increasing resilience. In general terms, this would help to improve material efficiency and cut costs, in addition to reducing the carbon footprint and procurement risks associated with volatile supply chains. However, investments are reportedly lagging behind the potential due to a funding gap. “Companies want the government to create the appropriate framework conditions and remove obstacles”, Laun explains. “This includes, for example, revising legal regulations to promote circular economy processes and decarbonization”, she adds.
