Businesses are problem solvers, but can they solve the climate crisis?
Businesses by nature are problem solvers as they respond to supply, demand, needs and wants in their markets. From a sole trader in a small coffee shop to the board of directors at Starbucks, each day brings a unique set of challenges and requires necessary changes.
So… can we expect businesses to help solve the climate crisis and what can we do to support innovative sustainable businesses in this fight?
Business dynamics offers the most powerful solution we have to the climate crisis because corporate traction has the power and influence to shift government policy and economic strategies. But the driving force behind this powerful solution is the market demand driven by their customers, users and communities (their people). Sustainable business is proving again and again to be good business and the people are largely responsible for driving this change. As more businesses transition to environmentally friendly practices including renewable energy sources, water management programs and emissions reductions strategies, we will not only see less net emissions generated. We will also see more investment into ground-breaking green technology combatting climate change.
So let’s take a look at some business strategies to address climate change and some innovative finance in businesses that are trying to help solve the challenges we all must address!
Modern businesses understand the responsibility their organizations have to deliver proper environmental, social and governance action. Positive action requires an understanding of the problem, so a best first step in climate change action is to understand your own footprint.
Carbon footprints (the emissions from producing their products) and their handprints (emissions from the sales and use of their products) are helpful macro representations of the emissions produced in a business’s activities. Once these are identified, strategies and changes can be put into effect to run more sustainable businesses.
Externally, businesses are engaging sustainability consultants, sustainable suppliers, key stakeholders and policymakers and ultimately their customers. They are publicly reporting emissions and energy-usage data, climate-related risks and management strategies. Companies are also demonstrating their commitment to climate action by partnering with other companies and stakeholders on solutions and by publicly supporting policies like the Paris Agreement and aligning their operations to the United Nations Sustainable Development Goals (SDG’s).
Climate Action Plans
The first step for many companies is to develop climate action plans for their organizations, either with sustainability consultants or through internal capability. This assessment needs to be undertaken for individual business units, offices, locations and teams to gauge the overall impact of their operations. Of course the components of a climate action plan depend on the type of company and the goals it wants to achieve, but every company faces a few general decisions, such as:
- whether the plan is designed through a “top-down” or “bottom-up” process
- whether to establish one or more targets – and if so, of what type and how
- how targets fit in with other environmental management activities
- to what extent the plan features market mechanisms such as internal carbon price and/or external carbon offsets
- how to use research and development resources and other means to drive innovation.
Once targets are established, they can drive innovation within the company, spurring internal programs and products that can help the company meet its goals. Sometimes the mere existence of emissions or energy-use data generates interest and ideas for improvements that turn out to be profitable on their own.
So how can businesses use Innovative finance to be sustainable?
Businesses that understand that the health, sustainability and stability of our economy is inextricably linked with the health, sustainability and stability of our people are the businesses that will ultimately succeed. By valuing both the societal and the natural systems on which we all depend, these businesses appreciate the importance of employing innovative financial tools to transition into sustainable operations now, rather than waiting for regulations.
Companies are employing a wide range of innovative financial tools to achieve their climate and energy goals such as:
- On bill financing for renewable energy transitions, which removes the high upfront costs of efficiency improvements and encourages building owners to work directly with utilities on efficiency projects.
- Switching to green pricing energy programs, which allows businesses to use sources like wind, solar, low-impact hydro, biomass, landfill gas and geothermal. This change can be made easy at Greenpower!
- Some companies and banks are tapping into the rise in investor demand to finance environmentally sound projects by issuing green bonds or sustainability bonds. Green bonds act as a vehicle for institutional investors seeking to put their capital in projects that address climate change and help drive innovation and development of low-carbon products. Like conventional bonds, green bonds can be issued by a corporate, bank, or government entity.
Setting Goals and Targets
Sustainable business is all about transparency and action. Taking the first small steps towards becoming an environmentally friendly business is a big win. Once you understand your carbon footprint, you can work towards reducing that across your operations.
A growing number of companies have voluntarily adopted climate-related strategies and have begun engaging with environmental consultants and sustainability consultants to set goals that match their businesses operations and aspirations. Demand for businesses to be environmentally sustainable is increasing, so there is no better time than now to set your goals and aim for your new green targets.
Successful business are empowered by the principle that standing still is not an option. Successful business look over the horizon to identify challenges and adapt to capitalize on them. They embrace change. As we continue to see greater emphasis focused on the impacts of the world’s burgeoning climate crisis, businesses could together help avert an impending cataclysm. This will continue to be driven by unifying people, profit and planet, motivated by market demand for sustainability.
Reach out to our team at NetNada for any needs in sustainability consulting – our software makes it easy for you to reduce your emissions and increase your profits.