The scale of the climate crisis can seem overwhelming at times, especially for small businesses or organizations seeking to operate in a sustainable way. Lost within the mass of information available to us and the fastest ways for global governments to shift towards a net-zero approach, are the solutions available for the entities that are key to the economic transition [1]. Believe it or not, sustainability is relatively easy to attain, and one thing entrepreneurs tend to forget is that it is not an all-or-nothing approach – small steps towards achieving larger goals often have a larger impact [2, 3]! Below you will find a range of steps any business can take to reduce their environmental impact.
The two major drivers of any business are the customers and the workforce, as such, their input is critical to developing positive company policy and understanding what steps can be taken. Likewise, organizations have a responsibility to educate stakeholders and consumers alike, creating educational campaigns and programmes tailored for each can go a long way in improving local communities’ understanding of climate issues [3-5].
From reducing electricity consumption, using recycled materials, generating less waste or finding ways to reduce staff travel, there are a wide range of small steps a business can take to reduce its environmental impact [6]. Other steps include installing LED lighting, improving recycling, replacing single-use items with reusable options, and swapping to renewable energy sources [7].
Larger expenses such as installing smart-meters that monitor power consumption, business-based heating and renewable energy production, and effective insulation have limited many businesses’ ability to transition. However, most local governments have subsidies and schemes aimed at supporting sustainable business operations [7]. Opportunities abound for entities seeking to make small changes and scale up their efforts, and high up-front costs are worthwhile investments [8].
An often overlooked part of business operations is supply chains, which for certain entities represent a much higher footprint than the business itself [9]. To this end, liaising with suppliers to discuss the best pathway for sustainable operations will be the best option. For businesses with integrated supply chains, a shift to electric vehicles, reducing packaging, and a combination of the above steps will yield strong results.
Sometimes the best way to set and reach sustainability goals is to bring in outside help specialized in making businesses more environmentally friendly. Armed with experience, expertise in their subject matter, relevant collaborators and partners, sustainable agencies can be key in unlocking a business’ potential. Have you ever wondered about the sustainable opportunities hiding in plain sight?
[1] Vincent Diringer, 2022, “Net-Zero: The Future of Sustainable Businesses”, LEAD-WiSE.
[2] Vincent Diringer, 2022, “Changing The Status Quo”, LEAD-WiSE.
[3] Wayne Elsey, 2022, “Small Steps For Big Impact: Getting Your Team Involved In Sustainability”, Forbes.
[4] Vincent Diringer, 2022, “Sustainable Change Through Education”, LEAD-WiSE.
[5] Vincent Diringer, 2022, “Dialogue Between Activists and Businesses – Key to Creating a Sustainable World”, LEAD-WiSE.
[6] NSW Department of Planning, Industry and Environment, 2022, “What can I do to make my small business more sustainable?”, New South Wales Government.
[7] Netherlands Enterprise Agency RVO, 2022, “How to make your business operations sustainable”, Government of the Netherlands.
[8] Paul Polman and Andrew Winston, 2022, “Yes, Investing in ESG Pays Off”, Harvard Business Review.
[9] Eloise Barry, 2021, “As More Companies Make Net-Zero Pledges, Some Aren’t as Good as They Sound”, Time Magazine.
The term ‘Greenwashing’ has found itself nestled within everyday conversations when it comes to businesses and climate action – but what is it exactly? Greenwashing is a portmanteau of whitewashing, the act of deliberately ignoring or glossing over an issue, and green action, or projects aimed at reducing environmental damage. As such, greenwashing refers to the glossing over issues of environmentally unfriendly business actions by dissimulating them or misleading the public [1-3]. The term has become commonplace in the past decade as businesses seek to attract consumers who are increasingly becoming more interested in sustainable goods and services.
To do so, businesses highlight how environmentally-friendly their product is, how the processing or sourcing of materials is in line with fair trade and sustainability, and sometimes even just suggesting they are green using language and color schemes (above). However, companies engaging in greenwashing are never truly taking action to make their businesses green, but are misleading consumers in order to profit [1-4].
Greenwashing is relatively commonplace. Major companies and small businesses have been identified as greenwashers – a label that is hard to shed and affects their reputation [1, 4, 5].
One example is the car manufacturer Volkswagen. The company was caught faking their emissions reports on several lines of their diesel vehicles in 2015. Branded as the most environmentally-friendly diesel vehicles on the market, Volkswagen capitalized on consumer demand for affordable low-emission transport [5]. However, the US Environmental Protection Agency (EPA) realized that the German manufacturer had rigged the testing, and the cars actually produced up to 40 times more emissions than actually advertised. Volkswagen denied directly misleading the public, saying they misunderstood the testing requirements, but the damage was done. Labeled a greenwasher, the company’s stock plunged as it was faced by class action lawsuits from around the world and several billions in fines [5].
While Volkswagen was caught in the act falsifying data and misrepresenting its product, there are several other types of greenwashing. Fossil fuel companies are known to participate in greenwashing involving misdirection by presenting themselves as key businesses in the renewable energy field. They highlight their investments in emerging technologies and carbon-reduction measures – yet they continue to prospect for new fossil fuel extraction sites and do not roll back on current production [6]. Likewise, specific fossil fuel lobbies have attempted to greenwash their energy sources. Coal has tried to rebrand itself as “clean coal” without explaining what made it ‘clean’, while natural gas companies have presented themselves as a low-emission fossil fuel that has even been branded ‘green’ by major economies, this despite natural gas still producing far more emissions than renewables.
Branding, marketing and advertising are actively used to create the illusion of science-based, sustainable climate action [1-3]. Retail giant Walmart recently announced plans to shift to a low-carbon operating model, following a similar move by other major companies. Yet Walmart’s framework does not include Scope 3 emissions which includes its high-polluting supply chains, while other businesses have taken theirs into consideration [3]. The aviation sector has actively come under fire for similar reasons, offering passengers to add a carbon offset donation that supposedly would counter the emissions of their flight – something a recent investigation by The Guardian disputes [7].
The examples above are just some of the types of greenwashing that can be encountered on a daily basis. While it may seem as though it is more pervasive than first thought, there has been a movement to counteract greenwashing which involves taking actual action to reduce emissions and embrace a sustainable business model [8]. Consumers are demanding more sustainable products, but they are also becoming more adept at recognizing greenwashing. As such, the best way to appeal to them and provide sustainable goods or services is by doing just that and shifting your operations to become more environmentally-friendly. It can’t be greenwashing if you are actually taking concerted actions to reduce your emissions and supporting sustainability. Have you thought about whether or not you may be greenwashing, and have you thought about the opportunities you may have to make your business sustainable?
[1] Bruce Watson, 2016, “The troubling evolution of corporate greenwashing” The Guardian
[2] Knut Haanaes, Frédéric Dalsace & James Henderson, 2021, “How to identify greenwashing”, Institute for Management Development
[3] De Freitas Netto, S. V., Sobral, M. F. F., Ribeiro, A. R. B., & Soares, G. R. da L. (2020). Concepts and forms of greenwashing: a systematic review. Environmental Sciences Europe, 32(1).
[4] Eloise Barry, 2021, “As More Companies Make Net-Zero Pledges, Some Aren’t as Good as They Sound”, Time Magazine.
[5] Geoffrey Smith & Roger Parloff, 2016, “Hoaxwagen: How the massive diesel fraud incinerated VW’s reputation—and will hobble the company for years.” Fortune
[6] Li M, Trencher G, Asuka J (2022) The clean energy claims of BP, Chevron, ExxonMobil and Shell: A mismatch between discourse, actions and investments. PLoS ONE 17(2)
[7] Patrick Greenfield, 2021, “Carbon offsets used by major airlines based on flawed system, warn experts”, The Guardian
[8] Vincent Diringer, 2022, “The Importance of Sustainable Business Models”, LEAD-WiSE.
In leadup to the 2021 United Nations climate change conference, COP26, countries announced their plans to decarbonize their economies in order to help mitigate the impacts of climate change – net-zero. These net-zero goals involve reaching a balance where the greenhouse gasses produced by an action are cancelled out by the amount of gasses it removes from the atmosphere. These pledges involve large investments into infrastructure and a general shift in economic priorities for many governments, but several major companies have also pledged to decarbonize their operations. Some, like PwC, have set ambitious targets that would see them reach the mark by the end of this decade [1, 2]. Scepticism from the public is rife however, as consumers are wary of greenwashing claims and inaction from both governments and companies – but net zero is the future of sustainable businesses, and opportunities exist for them to thrive using such a business model.
In an analysis of Fortune 500 companies with net-zero plans, the World Wildlife Foundation (WWF) found that only 20% had science-based plans. “A lot of businesses and investors are setting these kinds of targets, and they’re doing it, arguably, for PR reasons,” explains Oxford University professor Thomas Hale [3]. Companies like Walmart highlight the issues of greenwashing. Walmart, who have pledged to reach net-zero operations, do so without incorporating the emissions produced by their supply chains – which are the largest source of emissions for the company [3, 4].
PwC on the other hand has committed to the United Nations’ science-based targets for companies, joining other financial companies like AIA in transitioning their operations, investment portfolios, and that of their partners to align with net-zero goals. But what does this look like [5]? For PwC it means reducing their amount of corporate flights, transitioning their fleet of work vehicles to electric models, refitting their buildings to become more energy efficient, reducing waste and investment into emerging technologies [1]. Investing giant AIA went a step further and divested from coal and indicated that it would not carry out new investments related to fossil fuel, choosing to finance renewable power and sustainable development projects, and ensuring that its partners did the same [2].
Net-zero and sustainable business models are not just good for the planet, but they are also a financial opportunity [6, 7]. Several CDP reports highlight that the cost of not adapting to climate change-driven market demands will lead to trillions in stranded assets, and while implementing a sustainable business model may not be cheap, the long-term benefits far outweigh short-term, non-sustainable approaches [5, 7]. Consumers want their products and services to be sustainable, they are ready to spend more for them – and they are becoming more adept at identifying greenwashing. Have you thought about implementing a net-zero or sustainable business model?
[1] PriceWaterhouseCooper, 2022, “Towards net zero”, PriceWaterhouseCooper.
[2] Yvonne Lau, 2021, “7 years ahead of schedule, AIA becomes the first major Asian insurer to end coal exposure”, Fortune.
[3] Eloise Barry, 2021, “As More Companies Make Net-Zero Pledges, Some Aren’t as Good as They Sound”, Time Magazine.
[4] Net Zero Tracker, 2022, “Companies”, Net Zero Tracker.
[5] CDP, 2022, “Data”, CDP.
[6] Vincent Diringer, 2022, “The Importance of Sustainable Business Models”, LEAD-WiSE.
[7] Zameer, H., Wang, Y., & Saeed, M. R. (2021). Net‐zero emission targets and the role of managerial environmental awareness, customer pressure, and regulatory control toward environmental performance. Business Strategy and the Environment.
Biomimicry offers the promise of creative, sustainable solutions to solve our greatest design challenges. But it’s not enough to have a strategy for tackling a problem without the means to make it a reality.
Biomimicry thinking helps create products and processes that:
Sustainability is no longer a buzzword. As the world works towards finding appropriate solutions to the climate crisis, consumers are becoming increasingly aware of the impact that their personal choices have. More people than ever before are seeking to become sustainable, and they are ready to pay more for products that can be certified as being environmentally friendly [1].
Greenwashing, or making a product seem more sustainable than it is, has been the status quo for businesses appealing to customers’ demand. However, as a study by Deloitte highlights, younger generations have caught on, and they value companies who promote a progressive agenda [2].
The cost of not adapting to climate change-driven market demands will lead to trillions in stranded assets [3]. Investments and projects are considered stranded if they have unexpectedly become liabilities due to an unplanned obsolescence or reduced demand. This is not limited to fossil fuel companies, but every other sector – climate change’s effects are global and will affect businesses regardless of their industry or position on the supply chain. As several reports from the CDP Worldwide point out, the cost of implementing a sustainable business model will pay off in the long-term, not just by reducing an entity’s carbon emissions and mitigating climate impacts, but also by streamlining services, reducing overheads, increasing returns and meeting customer demands [4, 5]. Adopting a sustainable business model is future-proofing [6].
“Adapt or die,” noted the United Kingdom’s Environmental Agency ahead of the United Nations climate change conference in November 2021 (COP26) [7]. Consumers value truly sustainable products and global governments are serious about decarbonizing their economies. Major actors within the private sector have recognized the risks of not adopting a sustainable business model and are transforming their industries. Yet, many institutions have not analyzed their own, or their portfolio’s impact on the climate [5]. With major sustainability goals set to be reached within this decade, there is a pressing need for businesses to evolve with the times or risk being left behind – what will you choose?
[1] Southern Cross University, 2019, “Going Green”, Southern Cross University.
[2] Deloitte, 2021 “The Deloitte Global 2021 Millennial and Gen Z Survey”, Deloitte Touche Tohmatsu Limited.
[3] Ben Caldecott, Elizabeth Harnett, Theodor Cojoianu, Irem Kok, and Alexander Pfeiffer, 2016, “Stranded Assets: A Climate Risk Challenge”, Inter-American Development Bank.
[4] CDP, 2019, “Global Climate Change Analysis 2018”, CDP.
[5] CDP, 2021, “Financial Services Disclosure Report 2020”, CDP.
[6] C.P. Gurnani, 2020, “Sustainability and profitability can co-exist. Here’s How”, World Economic Forum.
[7] Environment Agency, 2021, “Press release: Adapt or die, says Environment Agency”, United Kingdom Government.
We believe that trust is generated through putting purpose in the core of your strategy. The growth is made through economic, social and environmental sustainability. What would a sustainable, universally beneficial economy look like? “Like a doughnut,” says Oxford economist Kate Raworth. In a stellar, eye-opening talk, she explains how we can move countries out of the hole, where people are falling short on life’s essentials and create regenerative, distributive economies that work within the planet’s ecological limits.
Check out more TED Talks: http://www.ted.com