(5 minute read) If you haven’t noticed an increase, over the past couple of years, in articles about climate change-related weather events, sustainability in business and movement in government policies across the globe then I am impressed. All it takes is a quick look on the BBC website to see endless articles about ocean plastics, modern slavery and Donald Trump’s rejection of climate change policies to see how this issue has grown in profile in recent months and years.
Of course, this is not a sudden change but the result of a broad range of issues coming together, over a number of decades, to reach a tipping point. As is usual with tipping points it is difficult to tell exactly when that occurred but it has certainly been heavily influenced by the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement, which was signed in 2015 and entered into force in 2016.
What are the Sustainable Development Goals?
The SDGs are a set of 17 high-level goals agreed upon by the United Nations which set out a framework for the UN’s path to a sustainable future free from poverty and inequality and the various socio-economic issues that arise from them. Before the SDGs there was a set of Millennium Development Goals. The difference between the two is that the business community is engaged with the SDGs in a way that simply didn’t happen with their predecessors.
What is the Paris Agreement?
Put simply, the Paris Agreement is the first ever global agreement to limit global warming to 2 degrees above historical average, and preferably 1.5 degrees. Before that any agreements tended to be limited to unilateral or multilateral treaties between nations and were often limited because several of the larger, more polluting countries historically avoided entering into them.
What makes these special?
It is widely acknowledged that a key factor in achieving a global agreement, and it is truly global (all 195 United Nations countries signed it and to date 176 have ratified it), was that, for the first time, there was significant lobbying from businesses and other influencers. Leonardo DiCaprio, with his 19.2 million followers on Twitter, is consistently ranked as a top climate influencer. Pope Francis’ papal encyclical letter “Laudato Si” called on the world’s 1.2 billion Catholics to join the fight against climate change, stating that the science of climate change is clear and that the Catholic Church views climate change as a moral issue that must be addressed in order to protect the Earth and everyone on it. These things, and many more, sent shockwaves out in to the wider business and political community that had, up until that point, really seen the climate change debate as one for policy makers and scientists
What has happened since 2015?
How long have you got?! Since 2015 the topic of climate change and its influence on our livelihoods has snowballed. In addition to the increase in news traffic about it as referred to above, major companies are committing to 100% renewable energy, entire cities are preparing for the impacts of climate change on their citizens and infrastructure, governments are genuinely changing their policies and the banking world is waking up to the opportunities around sustainable finance. This involvement of business and finance in the sustainability agenda is prompting change at an unprecedented pace.
And while the SDGs may have come first, it’s really since Paris that the SDGs have been taken up by business. Investors are assessing entire portfolios based on their alignment with the SDGs. Large corporates are reporting on the SDGs in their annual reports.
How does this all affect my business?
Quick answer – there are risks but there are also incredible opportunities.
Ultimately, no matter what your business is, there will be some link to the sustainability agenda. Whether it’s through your customers, your clients, your advisers, even your bank, somebody will be starting to ask questions about the sustainability of your business. Those questions, if you’re not ready for them, have the potential to limit your future growth. All it takes is for an article in a local newspaper or a pressure group on Facebook talking about something you designed (or built, or sold, or advised on) being unsustainable or bad for the environment or bad for the local community and things can quickly get very difficult. Equally, investors and businesses looking to align with the SDGs are likely to pass that down through the supply chain. It’s unlikely that it will be explicit – I doubt that corporates will start asking suppliers about their alignment with the SDGs, but there may well be some new compliance requirements or supplier questionnaires which have their origins in the language of the SDGs.
Conversely, if you are ready for the questions then you have the opportunity to take advantage of a rapidly expanding market. If your business strategy is fundamentally aligned with the principles of sustainability then all of your people will know the answers to the sustainability questions. Depending on how positive your products are for communities and the environment your people are likely to feel more passionate about the products/services/goods they are working on or selling on a day-to-day basis. An engaged employee is 44% more productive than a satisfied worker, but an employee who feels inspired at work is nearly 125% more productive than a satisfied one [Source: Bain & Company via FastCo].
In addition to the opportunity for higher productivity, engaged employees will be noticed by your customers and stakeholders. This engagement allows you to work with your own workforce to develop a new marketing strategy and search for new clients. The opportunities are out there – ready for you to take advantage of them. Importantly, this doesn’t have to significantly impact your bottom line. Frequently there will be inexpensive and even cost-saving approaches that you can implement. Add that to the fact that you will be able to target new markets (either by giving you a competitive advantage or enhancing your existing position) and you end up with an opportunity to actually increase your profits.
The good news is that all of this will ensure your business is more resilient to the types of global challenges talked about in this article. The great news is that you can open up new markets by integrating sustainability principles into the core of your business.
I am a sustainability coach with 10 years experience in the sustainability sector. I can help you and your business understand how to start mapping out a path to a more sustainable, profitable, business model. Contact me at email@example.com for more information.