12/09/2021 | Spotlight
Sustainability is far more than just a matter of corporate responsibility these days. It’s a vital component of modern business and there isn’t a sector that’s not embracing it. It has even become a key driver to investment, given that the venture capital world is now clearly focusing on sustainability-focused start-ups.
In the first six months of this year , green startups received €7bn of funding Europe-wide, a huge increase on the €4.7bn in the 12 months of 2020, aided to some extent by the growing number of business angels focusing on the subject. Its impacts are also felt at a higher level. ESG, for example – Environmental, Social, Governance – is now influencing mergers and acquisitions space, with one commentator recently suggesting: It would not be surprising if, as in the field of compliance, ESG-sensitive business models are “retroactively assessed”.
Suitable target companies are being selected more and more frequently according to ESG criteria. During the due diligence process, purchasers will have to look more closely at ESG factors when examining the business models of target companies, including their supply chains. Thankfully, Germany’s reputation is strong here. It’s widely regarded as one of the world’s most sustainable industrialised countries, thanks, is part, to the Federal Government’s work in advancing its sustainability strategy, aligning it with the UN’s 17 Sustainable Development Goals (SDGs). It was a multi-level one, led directly by the Chancellery and supported publicly by Angela Merkel, that embraced not only measures with an impact on the country, but those with a global impact, and others resulting from bilateral co-operation with other countries.
German companies are leading the way in terms of corporate social responsibility and the vast majority of DAX-listed companies as well as many smaller concerns, institutes, and non-governmental organisations have signed up to the UN’s Global Compact Initiative. On the global scale, more than 12,000 companies from more than 160 countries are currently signed up to the voluntary Global Compact Initiative.
Germany is further reinforcing sustainable economic development with its widely-publicised National Action Plan on Business and Human Rights which aims to blend social responsibility with supply chains and value-creation processes. An example of that is the Alliance for Sustainable Textiles, which seeks to achieve improvement on both counts for those employed in the clothing industry. Or the EU-funded SMARTCHAIN project which has been studying short food supply chains and their potential to change the way food is grown.
Within the financial services industry, where issues of trust always exist with cynical public, sustainability offers an opportunity for companies to build other areas of reputation, although there are concerns about how the industry as a whole priorities CSR. Data released by the US “customer obsession” brand, Forrester’s Consumer Technographics, suggests that almost half of Canadian, French and UK online banking customers think that “all banks are the same” and less than half of those in the US see the major players, such as Bank of America or Capital One, as trustworthy.
The pharmaceutical industry has its own momentum, particularly given the potential harm from product residues entering the ecosystem via groundwater, soil and drinking water and the potential contribution to antibiotic resistance.
In July, Health Care Without Harm Europe revealed how it has examined ways hospital wastewater contributes to the amount of pharmaceuticals found in the environment and explores the different methods hospitals are using to reduce it. In terms of the wider process industry, it’s commonly understood that there needs to be serious transformation to achieve the climate protection goals set by the Paris Agreement. That means designing them with the ultimate goal of zero CO2 emissions which, in turn, means more emphasis on electrification and dispensing with fossil raw materials for energy and material use.
In a recent keynote presentations, Roel Van Doren, group president global sales at Emerson in Switzerland, explained how advanced automation technologies can help industrial companies address their environmental sustainability challenges, such as improving energy efficiency by optimising equipment performance and meeting the demand for clean fuels, such as hydrogen.
That, and another by CTO Peter Zornio, was heavily focused on ways of achieving environmental sustainability goals, such as implementing solutions that enable the use of alternative fuels and low-carbon power sources, the reduction of energy and material use in production systems, and the management and removal of production emissions.
Van Doren explained: “Industrial companies must make a strategic shift in environmental sustainability”, going on to explain the importance of decarbonisation opportunities, how “optimising control look performance helps improve energy efficiency, and outlining the role of automation in meeting greater demand for hydrogen”. And Prof. Dr. Klaus-Michael Ahrend from The Darmstadt University of Applied Sciences gave a workshop on behalf of the ISC3 Innovation Hub, giving an overview of how to integrate sustainability aspects into the business model and its benefits.
For the past two years, the ISC3 has been naming its “Start-up of the Month” and its ever-expanding list has featured companies from all over the world, demonstrating the sheer creativity and innovation power of their founders.
Among them are Indresmat of the Netherlands which develops polyurethane resins that are versatile, durable, recycle and sourced from renewable raw materials such as vegetable oils and lignin. They are even brought to market in sustainable building materials, such as frames for windows and doors. Le Qara of Peru uses biotech engineering expertise and micro-organisms to create high-quality vegan leather that is biodegradable and toxin-free. A specific consortium of micro-organisms which is fed with plants and fruit residues produces a leather-like biomaterial. And Banyan Nations of India works with local waste collectors to produce near-virgin grade plastic granules. Driving the business is data intelligence system that traces plastics recycling activities in major Indian cities and proprietary process to clean the collected plastic, customising it for the specific thermal and mechanical needs of brands on a large scale.
In France, Innoverda works with chemical and pharmaceutical producers, trying to improve their electrochemical approach, and Mobius in the USA has developed a family of naturally degradable and compostable polymers made from lignin.
Andes Bioenergy of Ecuador has a process to produce biochar from agribusiness biomass wastes which improve tropical soils and provide renewable thermal energy via the P-SMART (Pyrolysis Small and Modular Auger Reactor).
The concept of sustainability, rather than the mere buzzword we all use these days, has been around since the dawn of civilisation, even though its definition may have had to adapt over time.
The word itself, however, was first coined far more recently, in 1713 in fact, in a handbook of forestry, according to experts such as the World Energy Foundation which recalls the use of the term was Nachhaltigkeit, meaning “sustained yield”. It was used to describe how it was bad practice to harvest more that a forest can regenerate. The translated term didn’t appear in English until the beginning in the mid-19th century, at about the time of the Industrial Revolution, although at the time it wasn’t applied to the chimneys belching harmful smoke or the chemicals polluting the rivers.
Later, when ecology became a discipline in itself, the idea of sustainability became more inclusive, referring not just to forests, but to all biological systems. Ecological sustainability described the ability of an ecosystem to maintain its essential functions and to retain biodiversity over time.
There were other shifts in definition, particularly in recent times as we gained a greater awareness of our overuse of resources and dependence on fossil fuels. By the 1980s, the word sustainability began to be used more in the terms of the way we treated the planet.
Perhaps the most common definition in current use is that of sustainable development, defined by the United Nations’ Brundtland Commission in 1987. In a report entitled Our Common Future, it noted: “sustainable development is development that meets the need of the present without compromising the ability of the future generations to meet their own needs.” So for something to be sustainable by today’s most common definition, it must balance how it meets human need without degrading the natural environment. Sustainable development has three goals, as defined by the 2005 World Summit on Social Development: economic development, social development, and environmental protection.
Ten years later, by the time Paris Agreement was signed, the world had changed and a new phrase has entered the lexicon: the Circular Economy. And while leading authorities such as the Ellen MacArthur Foundation insists its roots cannot be attributed to one person, it is widely thought to have been originally coined in a 1988 book, The Economics of Natural Resources.
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