3 minute read
The Business Case for Sustainability is easy to make
By Stuart Farrell, Founder and Managing Director, 8SQUARE Consulting and BritCham Sustainability Committee member and Roisin Reynolds, Managing Director, Ivydale and BritCham Sustainability Committee member
Sustainability makes commercial, strategic and ethical sense.
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Wildfires are scorching flora and fauna from the earth, floods and landslides are wiping away communities, the polar ice caps are melting, sea levels are rising and biodiversity is ravaged in many regions. We are not waiting for a climate crisis; it is here.
In the run-up to COP 26, companies face mounting pressure to become more ‘sustainable’. Does this complement or contradict internal business priorities?
Since the industrial revolution we have seen profound economic and technological development and population growth. A nation’s measure of economic success has been growth in production and consumption. ‘Success’ has meant that in one year we are now using the resources it takes the Earth 18 months to regenerate. We are red-lining in a period labelled The Great Acceleration - the relationship between civilisation’s progress and the planet’s deterioration has to be changed because the wellbeing of life on the planet is in the balance.
There is growing recognition that businesses must shift from a pure-profit, short-term focus to a “Triple Bottom Line” outlook. Profit. People. Planet. If we are to avert catastrophe, we must come up with solutions that take externalities into account. For instance, we cannot create more fresh water by spending vast amounts of energy in desalination plants. We need to apply systems thinking to these global challenges, with private and public sector collaboration to reshape value chains.
International organisations, national governments, and professional bodies can and do take action to encourage sustainability. Their toolbox is quite varied; a business can be subject to regulation, taxation, trading schemes, incentives, voluntary agreements and other carrots, sticks and ‘nudges’. But with a significant gap between the laggards, grappling to comply with the minimum requirements, and the progressive organizations, with high sustainability aspirations and performance, it is a challenge for external influences to be wholly effective. Whilst the hope is that as we move beyond COP26 we will see parameters tighten, businesses must not wait to make sustainability become part of their competitive advantage. If governments set the direction, then finance fuels the movement. Slowly we see more and more innovative approaches to providing capital for sustainable approaches to business - it’s recognition that a business which solves societal issues has a bright future.
Tables: The Great Acceleration. Stefan et al, 2015.
