Corporations are largely responsible for climate change. As the producers of everything we buy, use, and throw away, corporations create a vicious cycle of obtaining materials from the earth and releasing them back into the environment. Hence, environmental experts and activists hold corporations accountable for the catastrophe that climate change has given communities.
Thankfully, many companies have responded accordingly. Corporate Knights recognized 50 sustainable companies this year. The annual ranking is based on the evaluation of 7,000 companies that make over USD$1 billion in revenues. The 2022 list found 19 companies based in Europe, 19 in North America, 9 in Asia, two in South America, and two in Australia.
If mega-corporations could go green, then a small business must be more than capable of doing the same. But how come many companies continue to struggle with sustainability?
It turns out that going green might be easier said than done. But of course, a solution exists. First, let’s determine the sustainability challenges businesses face:
Challenges to Sustainability
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No Single Definition Exists for Sustainability
At the most fundamental level, sustainability means the ability to be maintained at a certain level. From an environmental standpoint, it refers to avoiding the depletion of natural resources. But all businesses must take from the earth, no matter how much they reduce their carbon footprint.
For this reason, companies came up with different ways to be environmentally friendly. Some gave up plastic, while others switched to renewable energy sources. But these methods aren’t 100% sustainable either. Paper bags may be biodegradable, but their manufacturers cut down trees to produce them. In addition, paper’s manufacturing process can release higher concentrations of toxic chemicals than single-use plastic.
On the other hand, renewable energy, specifically solar panels, may also negatively affect the environment. Some environmentalists pointed out that the rare materials used in the panels were mined unsustainably. Moreover, the panels aren’t recyclable, and manufacturers don’t keep track of their carbon emissions.
Without a single definition for sustainability, it will be challenging to hold companies accountable. This issue allows some businesses to greenwash, claiming that they’re sustainable when they are not.
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High Upfront Costs; Unclear Value
Switching energy sources, packaging, or supply chain methods incur hefty upfront costs. While it’s easy to calculate long-term savings, the value of sustainability remains unclear for many businesses. For instance, if using paper bags will not attract more customers, why should businesses give up single-use plastic?
If a business is as big as Apple, they might be more willing to take the gamble. Apple has changed their entire supply chain process, excluding charger adapters from their brand-new devices to reduce the emissions from producing them.
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Lower Profitability
The culture of sustainability encourages consumers to buy fewer products. As a result, companies that invested in sustainable measures may see a reduction in profits. Some businesses have managed to balance reduced consumption and substantial profit. They supported the culture of sustainability while attracting new customers with their high-quality products.
Small businesses with cheap, generic offers are at a disadvantage. If their market isn’t willing to pay more for premium goods, they’ll risk losing profit if they adopt sustainable practices.
Overcoming the Challenges
No challenge should give businesses a free pass for harming the environment. Today’s technology can allow all companies to reduce their carbon footprint. But if they can’t define sustainability, how would they start?
The absence of a clear meaning shouldn’t limit businesses. Instead, they should focus on the solutions, which revolve around technology. Boston Consulting Group (BCG) offers a 4-step solution: Process optimization, carbon data transparency, circular products and services, and data ecosystems and ventures.
Through automation, cloud migration, blockchain solutions, behavioral analytics, and cyber resilience, businesses can take those steps. These technologies allow businesses to track their carbon emissions and gather real-time data about their processes. As a result, they can save money on energy, fuel, and other resources businesses typically use for their operations.
Furthermore, if they can’t determine the value of going green, businesses should follow international standards. It can grant them an advantageous ISO 14001 certification. The ISO 14001 is a set of standards that help organizations boost their sustainability. It can guide them on the investments and risks to take. Hence, it will prevent businesses from aimlessly going green.
Simply put, the ISO 14001 gives businesses a feasible environmental management system. But it’s just one of the 23,000 standards the ISO has developed since its inception in 1947. It has been the most flexible standard so far, as it fits small businesses to multinational corporations. Therefore, companies have even more reasons to go green than let the challenges hold them back.
Climate change won’t decelerate for companies who refuse to make a difference. Businesses of all sizes must act now because their employees and customers will get the brunt of climate change.