The 2022 United Nations Climate Change Conference is scheduled to take place in Egypt this week. During this global event, world leaders will discuss how to best combat climate change and keep our planet from spiraling into an environmental disaster. Most likely, presidents and scientists alike will propose measures for limiting the exploitation of fossil fuels and battling deforestation. However, in most cases, the measures proposed at the conference will be either too grand or unattainable for everyday citizens. The question thus poses itself – how can smaller businesses combat climate change? While many articles will focus on more mundane changes that people can implement, this piece will look at why investing in sustainable business is the way to go when it comes to creating a greener planet.
Investor demand – the new gold standard
There’s a well-known saying in customer service – the customer is always right. Interestingly enough, this phrase appears to have driven a little over 80% of companies to establish environmentally friendly agendas. Namely, as investors begin to recognize the importance of the green agenda, they are demanding that the companies they invest in do the same – and when you think about it, this logic is not that unexpected. After all, people tend to seek out opportunities that align with their philosophies.
Climate risk is financial risk
In an ideal world, combating climate change would be placed above all else – that is unfortunately not the case at present. While around 86% of companies have a corporate strategy for fighting climate change, less than half have acted on it until this moment. However, what most organisations seem to misunderstand is that climate change will have a noticeable effect on their bottom line. In other words, investing in climate action would be a solid step for mitigating potential financial losses. However, this is often easier said than done. Thus, organisations just getting their feet wet with ecological agendas might benefit from strategic business consulting. Experienced environmental consultants will be able to determine which green initiative would have the greatest financial gain for your particular company. Such climate action may include steps such as upgrading office equipment or running emergency logistics. These simple yet necessary changes will prevent your business from falling into the red, keeping the budget in surplus for years to come.
Environmental regulatory demands – the new red tape
In addition to pleasing the client and improving your bottom line, investing in sustainable business comes with another benefit – keeping the red tape at bay. In 2016, the Paris Climate Agreement went into effect, consequentially forcing nations across the globe to pass stricter and more impactful climate legislation. As a result, countries such as Japan and Germany have already established their legally binding net-zero targets. This means that both corporations and brick-and-mortar shops will have to toe the line when it comes to environmental legislation. These regulations will also target overseas companies that are in business with countries committed to abiding by the Paris Climate Agreement. Because of this, companies on all levels may wish to consider a more sustainable business model for the future and adapt to legislation that is all but here.
A business worthy of its employees
No business venture has ever become successful just because of one person. In truth, running a business takes a village and it better be a good one. However, to attract hardworking and valuable employees, a company has to offer something in return. A recent survey conducted by Deloitte showed that 49% of Gen-Zs and 44% of millennials made business decisions based on their personal ethical views. Similarly, 51% of students in the US stated that they would choose to work in an environmentally conscious organisation over one which offered a better salary. These results, and many more like them, document a shift taking place in the workforce. As the younger generations prioritise the well-being of our planet, so should companies in search of up-and-coming talent.
This article looked at investing in sustainable business from several aspects – from the bottom line to employee satisfaction. However, the truth is, all these reasons come second to the most important one – keeping our planet and home as healthy as it can be. After all, if there’s no one left to buy products, the bottom line won’t matter all that much!