Sustainability: Tracing the roots
What were the 1970s known for other than the infamous Watergate scandal and the Vietnam War? Well, we do fondly remember the Star Wars toys and bellbottoms that people wore. But it was also an era where the whirlwind of environmental movements took the world by storm. Let us go down memory lane for some time. Americans celebrated “Earth Day” in 1970 for the first time. In the same year, the National Environmental Policy Act (NEPA) was signed into law by the United States Congress. This was followed by the Clean Water Act and the Clean Air Act two years later. Amidst the establishment of global environmental regulations during the 1970s, business sustainability took centre stage.
The market, being the most powerful institution, dictates terms for society to follow. As the most powerful entity within the market, business is best positioned to unleash the change that society needs at the scale it needs. Therefore, it is essential to change the way business is done to address environmental challenges. Over 90% of CXOs have nowrecognised the significance of sustainability to their business success. Today, organizations develop sustainability strategies, employ sustainability personnel, position their offerings as sustainable services and products, and publish sustainability reports for investors, consumers, activists, and the public.
The New Order: Transformational sustainability
Climate change, global warming, ever-increasing carbon emissions, improper disposal of industrial waste, and loss of biodiversity have highlighted environmental issues troubling the world. No matter where we stand on climate change, everyone around the world wants a greener, cleaner, and more sustainable world. At a global level, awareness about the impact of environmental issues on business growth and sustainability is increasing.
Amidst the hardships of COVID-19 and the imposition of countrywide lockdowns worldwide, our planet witnessed a few happy changes. The significant drop in carbon emissions due to lockdown helped improve the air quality. However, the lockdown was not enough to lead to a sustainable change. Because of this, companies all over the world have been focusing on having net-zero emissions for a long time. This demonstrates their commitment to environmental sustainability.
Sustainability supports the needs of customers, promotes the interests of businesses, enhances profitability, and helps businesses contribute to the creation of a better world. The COVID-19 led to a paradigm shift in the point of view that customers, regulatory bodies, employees, and investors held towards businesses. Economies of many nations are still struggling due to controlled business activity post-pandemic. Even in economies where the rebound has already begun, the pandemic brought about irreversible changes in the business environment.
Post-pandemic disruption has forced societies worldwide to call for a novel approach to businesses and their priorities. Therefore, the management of enterprises has begun to rethink their strategies. In the period post-pandemic, CEOs globally have begun to walk their “sustainability” talk. Their words are now being converted into action. When everything in an organization revolves around sustainability and it becomes integral to its business strategy, it is called transformational sustainability. In other words, the leaders embrace it as an opportunity to redefine business models and reshape critical aspects of their organization. Transformational sustainability accepts the latest technologies, both in terms of operations and strategies, to drive sustainability-oriented outcomes while increasing opportunities for financial growth.
Green-tech: Harbinger to a sustainable future
As businesses go digital, their underlying business model also undergoes a change, despite the relevance of the physical attributes of a product. Therefore, to attract prospective customers, businesses need to make their product offerings more attractive and compelling. This is not possible unless they know their customers well. Digitally, this translates into data collection activities that help businesses obtain actionable insights. Considering the negative impact computing has on our environment, CXOs should realise that a data collection spree does not equate to innovation unless data leads to useful insights.
As per the latest research, the size of the global green technology and sustainability market, valued at $10.32 billion in 2020, is estimated to increase to $74.64 billion by 2030, growing at a 21.9% CAGR between 2021 and 2030. “Green technologies” incorporate eco-friendly solutions that lead to social and economic sustainability. The primary objective of green technology is the protection of the environment and the repair of past damages done to it. Moreover, the governments of various nations continue to invest extensively in green technology. This helps conserve nature and reduce negative environmental impact but also boosts market growth at the same time.
Organizations need to walk together on the road to sustainable transformation. As businesses in all fields rethink their business strategies in the wake of the pandemic, the use of technology is the key to accelerating economic growth in a way that is sustainable. So, businesses need to change their priorities and look at important factors like green technology, net-zero carbon emissions, sustainable sourcing, and responsible manufacturing as a whole. It is high time that sustainability gets rid of the ‘compliance’ tag and takes the driver’s seat to lead businesses to a safer, healthier, and greener future.
Conclusion: Leading with sustainability purpose
Embracing a long-term mindset helps businesses work towards sustainable initiatives that provide economic opportunities while taking social and environmental factors into consideration. Companies should always aim at creating positive, long-term returns for their shareholders. Sustainability does not translate into the acceptance of lower returns by shareholders. On the contrary, it means making bigger, more stable profits to bring more value to all the people who have a stake in a company.
Achieving the sustainability goals requires more than just boardroom discussions and lip service. Companies could be ready for unplanned events in the future if they invested in purpose-driven strategies and thought about the long term. Given the worst possible scenario where everything else fails, purpose-driven organisations will have a common set of values to bank upon.