01/17/2024 | Green Innovation
I have followed the King of England frequently in the past, watching as I have his visits to large and small businesses around the country in his former role as Prince of Wales and one in which he put sustainability at its core years before it became universally adopted as a concept. So it was with a sense reassurance that I watched from a distance recently as his son followed in his footsteps with a visit to County Hall on the banks of the Thames in London. The hosts, Sustainable Ventures, reputedly the centre of the UK’s climate tech revolution and the largest hub of its type in Europe. But what was equally impressive was the sheer number of business innovators and the breadth of climate solutions they offered.
They included companies making tyres designed to reduce air pollution, packaging made from seaweed, smart ventilation units that improve energy efficiency and carbonfree home energy systems run by algorithm.
It all came on the day that Novuna Business Finance sent me the results of a poll that showed the extent to which 1,000 small business leaders had increased their commitment to sustainability over the past year, something they described as a “surge” in eco- consciousness. Top of the priority list across the board were an insistence on working with an ethical supply chain, increasing community activism, enhancing energy efficiency and improving packaging and waste management. On supply chain issues alone, the results showed priorities had increased from 14-26 per cent in 12 months and among those with netzero strategies in place, it was the top priority at 30 per cent. All businesses know that actively contributing to a more sustainable future will bring a range of benefits. In the short-term they will benefit from enhancing their stakeholder credibility and use it as a way to leverage some cost-saving benefits as well.
Longer-term benefits include enhancing their wider brand and reputation, fostering better employee relations while knowing, and being recognised for, doing the right thing for the future generations. That is the sort of thinking behind KPMG’s Net Zero Influencers report, designed to show leaders that simply listening to young professionals can have an impact on a business’ success and progress towards it's ESG commitments.
The company set up their Leaders’ 2050 initiative with the words: “Young professionals will be at the heart of tackling key issues facing societies today over the course of their careers – from climate change to social inequality. "The ‘voice of young professionals’ is not always heard in the climate and decarbonisation debate.”
The impetus is constant and the reach virtually universal. At the same time I am reading about how the CEO of the world’s largest asset manager is writing to CEOs emphasising the importance of sustainable investing, pollsters are telling me that green issues are more and more becoming a deciding factor for graduates when making career choices.
Norway’s Norges bank Investment Management, the world’s largest sovereign wealth fund, has made sustainability key to its investment strategy to the extent that It often divests from companies that don’t meet its environmental standards.
There is more to sustainable impetus than mere products. They may represent eco-friendly alternatives; but as a movement they are reshaping the face of entire industries. The greater the innovation, the greater the demand, which means new income sources and fresh opportunities for entrepreneurs.
Not forgetting of course that, in today’s market, customers seek more than mere products; they’re in search of brands they can trust: those whose values mirror their own. It follows a pattern which has seen fresh markets constantly emerging. Innovations in renewable energy, sustainable agriculture, and green technologies introduce new products, attracting not just consumers but investors, creating markets that not only diversify the economy but cater to a growing demand for new and innovative eco-friendly solutions.
Sustainability entrepreneurship goes a step further, highlighting that value also lies in resource conservation, wider wellbeing, a holistic view that often leads to enhanced reputation, customer loyalty, and stakeholder trust.
This is often as prevalent among small companies as larger enterprises. Their close-knit community relationships position them well to address specific needs and remain relevant. Jo North, founder of the Big Bang Partnership recently highlighted what she described as the trailblazers in Sustainable Entrepreneurship.
They included Muhammad Yunus from Bangladesh, who introduced concepts of microcredit and microfinance, founding the Grameen Bank, which offers small loans to impoverished entrepreneurs, empowering millions, especially women, to break free from poverty. Another was Wangari Maathai from Kenya who founded the Green Belt Movement, a grassroots initiative encouraged communities to plant trees and India’s Vinod Khosla, a venture capitalist who heavily invests in green technology startups which, in turn, have spurred innovations in renewable energy, waste management, and sustainable agriculture. “As we navigate the intricate landscape of the 21st century, sustainable entrepreneurship emerges as a beacon,” she said. “It holds the promise of a world where businesses prosper, not at the expense of society or the environment, but in harmony with them. The journey ahead is challenging, but with entrepreneurial spirit and commitment, it’s a journey worth starting.
“In the past, while the majority were profit-driven, some entrepreneurial ventures were ahead of their time. They not only sought profit but also aimed to make a positive impact.”
On a wider policy level, there has been much impetus. In April, for example, following ground-breaking investment in climate technologies announced in the US Inflation Reduction Act, EU leaders disclosed their own strategy to stay globally competitive in the race to net zero.
It involved eight strategic technologies in the form of solar, electrolysers and fuel cells, wind, sustainable biogas, batteries and storage, carbon capture technologies and storage, heat pumps and geothermal, and grid technologies. Together, they were to form the basis of the original European Commission’s Net-Zero Industry Act (NZIA), setting out the continent's stall in terms of what the world could expect in the decades to come.
Only weeks earlier, the European Commission had released a report aimed at keeping the EU an attractive investment location. The report, A Green Deal Industrial Plan for the Net-Zero Age, acknowledged the short-term difficulties faced by Europe due to war and high energy prices, and how some of the initiatives being promoted in other parts of the world are introducing external elements. All of which, appears to lead from the front and set a template for business leaders internationally to follow suit, rather like a royal seal of approval.
More than half of corporate sustainability professionals admit they are struggling with budget issues and a lack of internal interest. ESG, sustainable procurement regulations, and strategic CSR are placing social value at the heart of commercial success of private sector organisations in many UK industries. But research by whatimpact.com which spoke to 150 organisations for a recent white paper concluded that social value is still relatively new, and requires an extremely proactive mentality due to its fast-evolving nature.
CEO Tiia Sammallahti said: “It is astonishing and sad that none of the social value and sustainability professionals had a dedicated budget for tools, systems and formulating partnerships with charities and social enterprises on the grass root level. Time has passed on those companies whose boardrooms and executive level decision makers do not understand that social value is one of the biggest success factors in business both in short term contract revenue as in growing the overall business value.
Corporately, common barriers to change toward sustainability range from competing priorities of managers, the pressures on profit and growth and, inevitably, organisational systems not up to the task. Lack of capital to invest in new ways of operating also plays a part.
New research in Germany shows that while most people follow sustainable practices to some extent, they believe that their own potential impact pales in comparison to that of corporations and are keen to see policymakers improving corporate behaviour.
Similar research in the UK suggests that small businesses are embracing AI and prioritising sustainability but are being held back by rising costs and a lack of understanding of the latest technology. Mastercard found that bosses see sustainable goals as a priority, a figure that rises to almost three quarters among younger 18–34-year-olds. But more than half also say that rising costs are making it more difficult to meet them. The payment processing giant warned that, with SMEs making up 99.9% of the business population, the findings cast serious doubt on the country’s ability to meet its net zero goals.
The retail guru Mary Portas, said: “A fundamental part of the UK’s business population is being underestimated: micro and small businesses. They have huge clout and it’s brilliant that so many are committed. But this counts for nothing if they aren’t supported to achieve their net zero goals.
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