Businesses have often been behind societal demands for responsibility. Things are starting to change.
Businesses have often been behind societal demands for responsibility. Things are starting to change, however, as many companies are taking the lead in practicing and promoting sustainability. The trends seem promising, but will the future of corporate sustainability be as bright as we would like it to be?
The last few years have seen a marked increase in corporate sustainability commitments. Businesses are starting to look at sustainability as something that should be at the very core of their operations and not just a nice-to-have add-on for improving their image. Companies want to show their customers that they care about the environment.
Towards a global impact
More and more businesses are showing increasing concern over issues like biodiversity loss, deforestation and other global threats. This comes as no surprise, considering that according to a recent study by Accenture 62% percent of customers want companies to take action on sustainability, transparency and fair employment.
Meanwhile, environmental change is also a clear signal for business to react. Rising emissions may lead to stricter limits and higher carbon taxes and depletion of precious resources can make them more expensive and harder to acquire. Meanwhile, an insufficient sustainability profile can help put companies out of business.
This new reality brings threats but also many opportunities for the corporate world to engage in practices for the greater good from lobbying governments for more climate action to engaging into new collaborations such as the recent Renewable Energy Buyers Alliance in the U.S. or the New Plastics Economy Commitment supported by key global players. Overall, more than 600 global companies have committed to climate action and 190 companies have committed to 100% renewables.
We see many other companies acting in areas of their particular focus, including fast-moving consumer goods (FMCG) companies investing in sustainable packaging innovation, tech companies searching for ways to harness AI for good, and businesses in the healthcare sector uniting to help people adapt to climate change. Spanning their influence far beyond the economy, corporations are now among key actors negotiating the future of our planet.
Negotiating care and influence
Responsible investments and climate disclosures are other trends that are gaining momentum with companies increasingly showing concern about their impacts on society and the planet. Many companies are starting to invest specifically in renewable energy, green transport, sustainable agriculture and other climate-friendly technologies.
Meanwhile, as new climate realities are becoming more apparent, actors that may previously have denied or downplayed the threats of climate change are investing heavily into negative emissions and geoengineering projects, which are seen as critical by leading scientists globally. Developments in genetic engineering, cloud brightening and other technologies will enable companies to take their picks among the best ways to act on the climate.
The tensions regarding responsible investments are going to get even stronger as concerns and actions meet in the debates between nature-based solutions and technological narratives. Discerning truly sustainable practices is going to be critical for companies, decision-makers and citizens alike. Doing so can potentially lead to the emergence of new sustainability criteria and metrics, as well as a revolution in transparency and disclosure.
All together now
On the other side of corporate sustainability are regular people to balance out the risks and gains within the corporate world. Citizens have come a long way from simply demanding safer and healthier products. More of them are now making choices based on product origin, the responsibility of supply chains, employee wellbeing and the overall coherence of a brand’s sustainability efforts.
Company boards are increasingly aware that no matter how many green labels they have if your CEO is found to be poaching in a forest the company’s reputation is likely to take a hit. Younger people, especially, are starting to speak up, joining movements like Extinction Rebellion, Strike 4 Climate and others.
Meanwhile, protests by the so-called yellow vests in France and other workers-led initiatives are drawing attention to the fact that sustainability should not be only for the rich. Some companies have already embraced the trend. For instance, IKEA and Patagonia are leasing, repairing and taking back their products, while Google is telling people about sustainable living in 3D fact-based animations.
Soon, we are likely to see consumers and companies increasingly joining forces to create sustainable economies with new models of interaction and collaboration. Among key features of these are likely to be a movement away from new to refurbished, from products to services, and from ownership to temporary use.
Bright yet cautious
Despite all the positive trends, issues, like combating hunger, protecting freshwater sources and overcoming poverty, are also still receiving little attention within large global companies, according to a recent report by SustainAbility. The aspiration of some global companies to grow without considering nature’s limits is likely to be another stumbling block for positive sustainability endeavors.
The rising frequency of extreme weather events and deteriorating environmental quality might to be the sad part of the planet’s future, endangering contemporary living standards and lifestyles, along with the whole current setup of the global economy. New threats from cybersecurity issues, international trade tensions, and government pressure might likewise downsize some of the emerging sustainability transitions.
The challenges are many, yet the future of corporate sustainability is looking brighter than ever. If rampant greenwashing, the overuse of resources and dubious commitments don’t derail the positive trends, we might be entering a new era of far more sustainable businesses.