Sustainable Development in Business: 2022.

Sustainability is becoming more common in everyday business practice. Moving up the ranks in priority over the last decade. Driven by a more ethically conscious global population,  businesses have been forced to rethink the way they operate. Above all, increasing the demand for sustainable development and transparency throughout.

But, exactly what is a sustainable business?

A sustainable business is defined as doing business without negatively impacting the environment, community, or society as a whole.

How is a sustainable business measured?

Environmental, Social, Governance (ESG), are a popular set of standards/metrics used to analyse company’s operations. Socially conscious investors use it to screen potential investments. Measuring ethical impact and sustainability practices. For instance, Investors analyse factors such as a carbon footprint, water usage, community development efforts, and board diversity.

Climate Change – Negative effects of Business Industries:

Human consumption has been the primary cause of climate change. We live in a throwaway society that has a high demand for material goods. Human consumption comes in many forms, from eating food to warming our houses. Below discusses the worst industries producing these products. All of which have caused detrimental effects on our environment.

Power Generation:

First and foremost, are you sitting comfortably? Is it warm? The energy used to generate electricity and heat for your home is derived from fossil fuels. A finite resource. Meaning it can only be used once. Now consider the amount of power required to run cities around the world. According to UN-Habitat, ‘cities consume 78% of the world’s energy and produce more than 60% of global greenhouse gas emissions.

Manufacturing:

Secondly, another industry that’s heavily reliant on fossil fuels. Industrial factories are leading pollutants, they emit toxic gases every day. Pushing out carbon dioxide and methane into the atmosphere. As a consequence, the gases absorb radiation. Which in turn, causes our planet’s temperature to rise. A global warming vehicle with a butterfly effect. Temperatures rise, ice caps melt, and sea levels rise. Which all increase the chances of natural disasters. As a result, animal species are at risk of becoming extinct.

Furthermore, polluted air causes worrying health consequences. Particularly worse in developing countries. It can cause heart damage, pancreas damage, lung damage, and even brain damage. Air pollution is only the tip of the iceberg when it comes to factory pollution. Producing devastating water and soil pollution too. Toxic waste is generated by factories and discarded irresponsibly into rivers, oceans, and landfill sites. Done plain and simply as a means of cheaper disposal. This results in endangering marine life and reducing soil fertility and causing food contamination.

 

Deforestation:

In today’s society, the power of trees is underappreciated. They capture greenhouse gases and prevent their release into the atmosphere. When we cut down trees for human consumption, we create a trifecta of issues.

1. The toxic gases they’ve captured are released when they’re cut down.
2. What happens to them after they’ve been cut down? They are either burned or left to rot.
3. Deforestation is mainly done for agricultural purposes. What was once a nutrient-rich forest, is replaced by greenhouse gas-emitting crops and livestock.

All of the issues combined equate to almost a quarter of global warming. That’s without mentioning the devastation it causes to our ecosystems. Destroying species of plants and animals in the process. In 2018, Greenpeace International released a moving advertisement titled ‘Rang-tan: the Story of Dirty Palm Oil.‘ Dedicated to illustrating the effects of the palm oil industry on the orangutan species.

Transportation:

We rely on vehicles every day, such as cars, trains, planes, and boats. This evidently highlights our reliance on fossil fuels. Vehicles emit large amounts of carbon dioxide into our atmosphere every day. Accounting for 5% to 20% of global emissions every year. However, the transportation industry has been at the forefront of developing sustainable alternatives. Gradually car manufacturers are developing better and better electric vehicles.  Additionally, scientists are investigating alternative fuels such as hydrogen fuel cells. These fuel cells, which are made from renewable energy sources, would help to reduce reliance on fossil fuels. Furthermore, high-speed electric railways are another sustainable development progressing. Emitting less CO2 than traditional diesel trains. Consequently, offering travel alternatives for airline customers.

Despite this, It’s not all gloom and doom. Industries are innovating and striving for a better, greener future. A trend we’ll see more of in 2022, so here are 5 emerging sustainable business developments coming to 2022.

5 Emerging sustainable business development trends coming to 2022:

1. Sustainable Investing Increases:

According to Carbon Trust research, 70% of firms (large corporations globally) consider environmental sustainability initiatives to be ‘somewhat more important’ or ‘significantly more important.’ Particularly after covid-19.

2020 saw record inflows into ESG funds, doubling its investment from 2019. A trend set to continue into 2022.

Additionally,  new methods are being developed for SME’s to engage in sustainable development.  For example, more businesses, including ours, are committing to environmental initiatives such as the SME Climate Hub. The SME Climate Hub is a government organisation partnered with the United Nations and Oxford University. Supporting small and medium-sized businesses to reduce their carbon footprint. We have a strong passion for sustainability, so we have committed to cut out greenhouse gas emissions and reach net zero by 2030.

To learn more, visit our SME Climate Hub blog.

2. Data is crucial

Data will be pivotal for businesses in measuring Sustainability projects. The concept of sustainability alone isn’t enough, investments need to be backed by data. This is critical for measuring success. The demand for data-driven decision-makers who consider ESG considerations creates new job opportunities. As more individuals join the ESG fund in 2022, the quality and amount of data will improve.

3. Better Transparency

There are already UN regulations in place requiring businesses of a particular size to report environmental data. Transparency is a critical component of corporate sustainability. Being transparent about your efforts is how we gain accountability. We live in a time where customers are demanding more sustainable brands. Being honest and transparent about your efforts can win over the hearts of consumers. Moreover, many businesses have begun to include product journeys. Showing how it was created from the first raw materials obtained. Furthermore, the Cop26 Climate Conference in November 2021 sparked more transparency efforts to come in the new year.

4. Working from home is here to stay

We are all aware of the implications of Covid-19. Employees were forced to reduce contact by moving out of the office and into their own homes. We didn’t realise it at the time, but we were making beneficial changes to our environment. Less cars commuting, less energy used by office buildings, less air travel. As a result, reducing overall greenhouse gas emissions and fossil fuel consumption.

Already, large corporations such as Twitter have incorporated working from home into their business strategies. We anticipate more businesses will start adopting a “hybrid” strategy. Whereby working at home or in the office is simply a choice. We predict other businesses will follow suit, and not just temporarily.

5. Climate positivity replaces net-zero

Moreover, although the net-zero emissions initiative is currently thriving, this is going to change. Climate positivity will eventually take over in 2022. Climate positivity means we are making efforts to remove more greenhouse gases than we emit. This is a more important goal to pursue since it assures a safer, greener future.

We’re seeing higher demands from the consumer base as a whole. Demanding both sustainable products and sustainable development. Undoubtedly, we will see businesses incorporating sustainable development in the coming year.  Being transparent about it will mould who is successful and who isn’t.