Is Your Business Really Sustainable?
Is Your Business Really Sustainable?
Author: Charlie Thompson
No matter how eco or ethical your product might be, it’s easy to overlook the broader social and environmental impacts of your business.
From the moment we wake up, what we choose to do, and how we choose to do it, has an impact on the world around us. The way we operate, manage and interact with the ecosystems that we call “businesses” is no different.
In fact, I’d argue that the business ecosystem is where our carbon footprints are born, fed and raised – and it’s here, in the business ecosystem, where we need to implement the biggest changes and solutions to combat climate change, pollution and waste.
To unpack this, let’s look at the conscious and sustainable elements of a future-proof business.
A conscious product as an evolution of an existing consumer solution that is delivered in a way that is more sustainable for human and planetary health. It can include:
- Emerging solutions: new products and services that are built to address the growing demand for wellness and sustainability.
- Evolving solutions: a product or service that is enhanced to increase its sustainability – e.g. a bamboo toothbrush that replaces a plastic toothbrush.
- Product service systems: renting, leasing and sharing schemes.
Conscious products help to reduce the lifetime impact of a product (consider the emissions of an electric vs. diesel engine) and the end-of-life impact of a product (for example, how long a plastic vs. bamboo toothbrush takes to degrade).
In many cases, conscious products go some way to reducing the production impact of a product (by reusing waste materials in a supply chain, for instance).
While a conscious product might reduce the social and/or environmental impact that its traditional counterpart has on the world, it doesn’t mean all the requirements of responsible and sustainable business are met. For that to be the case, a business needs a clear Corporate Social Responsibility Strategy and tangible Sustainability Strategy.
A responsible business is one that has a commitment to social and/or environmental wellbeing. It will have a Corporate Social Responsibility Strategy (aka. CSR or Impact Strategy) that clearly documents how and why the business is supporting a good cause to further its positive impact.
A good CSR Strategy will address the broader impacts of the industry in which the business operates and make steps to address that both inter/nationally and locally.
A sustainable business is one that has a strategy in place to measure and reduce its carbon footprint, pollution and waste, and to ensure the ethical treatment of people, places and animals across its value chain.
A sustainable business will have targets and goals in place to meet the global need for Net Zero Emissions and to align with the United Nations’ Sustainable Development Goals. In doing so, it will operate in harmony with the natural world.
Why is sustainable business so important?
Current carbon accounting directly links 20% of greenhouse gas emissions to businesses (2018 UK Greenhouse Gas Emissions – reported in 2020). However, this figure doesn’t consider two key things:
- The contribution of the business ecosystem to the emissions recorded for transport, energy, land use and waste management.
28% – transport
23% – energy
15% – residential
10% – agriculture (land use)
5% – waste management
- The fact that everything is interlinked and there is rarely a waking moment that we are not interacting with a business.
There are 168 hours in a week. On average, we sleep for 56 and work for 40, in a business environment. And we spend much of the remaining 72 hours engaging with food, entertainment, transport and hobbies that are created, managed and distributed by businesses like farms, supermarkets, theatres, media providers, petrol stations, gyms.
Business is the heart of our impact on our natural world and now, more than ever, we need to ensure that impact is positive.
“Business is an agent of development in society. It can benefit a lot of people, but it can also hurt a lot of people. It can benefit it owners, its customer and society at large, but it can also damage those people”
David Rice, Cambridge Institute for Sustainability Leadership, Fellow
When did business turn sour?
Companies have existed for thousands of years, as structures for groups of people with shared missions.
David Rice, Fellow at the Cambridge Institute of Sustainability, believes that companies were originally born as agents of state, to do things like build housing and execute social projects. It wasn’t until we incorporated companies in the mid-19th Century and gave them the privilege of limited liability that we started to grow something that looks like the business of the modern day.
Something changed again in the 1980s when the purpose of a company became almost entirely about profit (relatively short-term shareholder value). Here, companies largely lost their broader purpose.
Are big companies to blame?
In 2019, The Guardian reported that 20 enterprises were contributing to 35% of all energy-related carbon dioxide and methane emissions worldwide.
Looking beyond the energy footprint, the Organisation for Economic Co-operation and Development estimates that small and medium sized businesses (SMEs) contribute 60 – 70% of all industrial pollution in Europe which gives them, on average, a higher aggregate footprint (OECD, 2018).
Europe’s Green Action Plan (GAP) aims to help SMEs take advantage of opportunities offered by the transition to a green economy. It presents ways for SMEs to turn environmental challenges into business opportunities (European Commission).
SMEs, startups and ecopreneurs are playing a vital role in the transition to a low-carbon economy by developing new green business models for different industrial sectors (BioEnergy Consult, 2020).
While there are a few big fish in the pond, there are millions of SMEs. To tackle climate change, every business needs to act.
|Australia||United Kingdom||United States|
|SMEs||2 million||5.9 million||30 million|
The small business footprint
With many small businesses operating from home, household emissions are now tied up in small business emissions.
47.5% of people in the United States are employed by small businesses, most of which would have an easier time achieving carbon neutrality than large businesses.
Recently, Microsoft pledged to become “carbon negative” by 2050. Using carbon offsets, your small business can likely afford to become carbon negative today, in 2020.
Over time, you may be able to eliminate your carbon offset by switching to using renewable energy and adopting other best practices—which many would argue should be your goal.
Reducing your carbon footprint is just one part of the equation. The full picture of sustainable business is three-fold:
- Conscious product
- Corporate Social Responsibility Strategy
- Sustainability Strategy