Changing the Bottom Dollar
Why Businesses Should Embrace Sustainability
Because climate change has received an increasing amount of attention, it may be tempting to believe that companies as well as individuals are taking the challenge of sustainability seriously. However, the reality is that many companies still lack the drive to make significant changes to their business model.
As environmentalist Douglas Lober writes, “Global warming will hardly disappear overnight, even if we address all of these issues immediately. Perhaps the biggest problem though, bigger than all of the above, is that humans do not want to address the issues. We don’t want to change our ways – and so the problems continue.”
The truth is that taking steps towards more sustainable development does not have to hinder a profitable bottom line. Instead, innovations are continually providing new ways for businesses to change their practices and adopt more eco-friendly operations.
Additionally, the growing trend among consumers is a desire to support businesses that share the values of society as a whole. Thus, apart from the fact that companies have more and more opportunities to safeguard the planet’s resources, companies also inevitably have a large customer base invested in their efforts.
The Problem With Modern Business
We’re all polluting, but given the fact that companies are consuming more and are responsible for larger amounts of waste, their carbon footprint is larger too. When large organizations fail to recognize the significance of their contribution to the increase of pollutants and waste, it poses a serious threat.
Less than a year ago, Tess Riley reported for The Guardian the results of a study that found, “Just 100 companies have been the source of more than 70 percent of the world’s greenhouse gas emissions since 1988,” and, “More than half of global industrial emissions since 1988 – the year the Intergovernmental Panel on Climate Change was established – can be traced to just 25 corporate and state-owned entities.”
The report asserted that these entities were producing enough emissions on their own to critically impact climate change.
There is evidence of how this trend can have negative impacts on the planet and those who call it home. The University Nevada, Reno reports that undernutrition, food security, environmental disasters and the required relief, and vector-borne diseases and allergies are already impacting public health because of the shifts in the planet’s temperature.
Certainly, most business are not polluting on as large a scale as companies such as Shell and Chevron. However, the report does make it painfully clear that a single organization can have a serious impact on the environment, and that is why businesses who haven’t already should be quick to adopt sustainable methods of development. No one should be under-assessing their impact.
How the Bottom Line Fares
This is the tension for businesses: historically green approaches to business development have been paired with the perception that they will not be as profitable as they would be otherwise; businesses’ profitability will suffer because they will have to divert funds to the more costly, more eco-friendly practices.
However, with the right technology and the attention that is being paid to green efforts, that is no longer the case today.
While at one time it may have been true that sustainability and profitability were mutually exclusive, we now have examples of companies that prove sustainability can actually lead to profitability. Businesses today are showing time and time again that in the modern era an organization doesn’t have to pick; it can be both.
Because Of Innovation
One of the primary reasons companies no longer have to fear excessive drain on their resources is because the innovations available are changing the ease with which a company can become green.
According to the Harvard Business Review, “Our research shows that sustainability is a mother lode of organizational and technological innovations that yield both bottom-line and top-line returns. Becoming environment-friendly lowers costs because companies end up reducing the inputs they use. In addition, the process generates additional revenues from better products or enables companies to create new businesses.”
Across a wide array of industries, the environmental problems are recognized and are being combated by new innovations that companies can implement to reduce their waste in more streamlined, efficient ways.
As Rutgers University points out, “A circular economy that is based on regeneration and restoration can help solve almost all the problems associated with a linear economy. More specifically, a circular economy aims to keep raw materials, goods, and product parts at their highest value and utility levels all the time.”
A linear economy is one based off a model of “take-make-dispose.” However, a circular economy wherein companies and individuals alike reduce waste and reuse products is becoming more and more available as innovations continue to break down the barriers to doing so both practically and economically.
Because Of Consumers
At the heart of all of this lies the consumer. While companies are certainly held responsible by regulators, their true drive is to win over consumers, and consumers more than ever before have serious opinions about what companies are doing with their resources. This is especially true for millennials, the generation gearing up to control the majority of the buying power.
As Sarah Landrum outlines for Forbes, millennials want four specific things from sustainably-minded companies:
- They want companies to be actively invested in the betterment of society and the solution of social problems.
- They want companies that prioritize “making an impact” on the world around them.
- They want companies to be open and honest about their efforts — and to be public about their pro-social initiatives.
- Finally, millennials want companies to involve their customers in their good works. They want an opportunity to give back — whether it’s with a gift of their time or their money.
Thus, companies have incentives on all sides to make changes that will not only help the environment but will also bolster their brand’s image with consumers. Organizations should be shifting their efforts to sustainable business development because it’s the path to a successful future.
Where once only a select few, already prosperous companies were making sustainable choices, now all businesses have access to better procedures. Even for those who can’t alter every component of their business model, there are eco-friendly changes that virtually every company can make to diminish their negative impact. And as we’ve seen, even the relatively small choices shouldn’t be undervalued.
Not only that, consumer preferences have changed. Brand loyalty is no longer merely a matter of the best product at the best price. Instead, it’s a matter of demonstrating to consumers that your brand is more than a brand but also an embodiment of the ideals that they hold most important.
Therefore, companies adopting sustainable business models are not making changes at the risk of their viability but for the sake of their viability.