Climate change consequences are becoming more and more obvious. Without needing to descend in the nitty-gritty of climate science, the recent shift in the denialist official line of defence from “it’s not happening” to “it’s happening, but not because of us” should plant the idea.
The emergence of hugely successful projects coupled with the increasing need for solutions is pushing investors, companies and anyone with a vested interest in the future really, to fund the change they need to see happen.
For example, Ikea has pledged to source 100% of wood and paper from more sustainable sources by 2020. Ikea, like many others, has already acknowledged the dangers for its business model of changing climatic conditions and dwindling raw materials.
Tailwind for a change
Flagship businesses are declaring war on unsustainable materials, either from anticipating their downfall in the public opinion or simply because they are going to be increasingly difficult to source. Another example, vanilla’s price has jumped from $40/kilogram in 2011 to $600 in 2018 (!), wreaking havoc in the spice and food industry. These examples provide an outlook on what will be expected to conduct business in the globally warmed world.
A Task Force on Climate-related Financial Disclosures led by Mr. Michael Bloomberg himself categorises these supply chain-associated risks into two distinct groups:
A) Physical climate risks from acute weather events and chronic climate patterns are disrupting the availability of raw material and energy supply, supplier operations, and local communities along the supply chain.
B) The transition to the low-carbon economy also presents policy and legal risks that result from several trends, including the pricing of greenhouse gas (GHGs) emissions, disruptions from new technologies like blockchain, market risks from growing customer demand for low-carbon and climate-resilient goods and services, and reputational risks to a company’s brand equity and future business.
The question is: how can companies discover and finance solutions to support both their growth and the planet that sustains it? Its corollary: are businesses as we know them compatible with a viable planet?
NGO, this is business. Business, this is NGO
Between these two major stakeholders, a history of mistrust has developed, despite examples of extremely successful collaborations between seemingly colliding interests. The marriage between for-profit elements and social impact imperatives is not so impossible after all. What seems increasingly unnatural is the artificial separation of the two and the differences in the laws that govern them.
Read also: Patagonia Boss Yvon Chouinard has Something to Share
The information deficit between the two parallel — and certainly colliding at times — universes of business and not-for-profit action is one of the greatest barriers to integrated action. Companies have a hard time navigating the multitude of climate actions dedicated to their line of work. The love/hate relationship is complex between organisations desperately trying to secure funding and best practice commitments, and companies in need of technical advice and validation for their actions. Because of this entrenched situation, valuable opportunities are lost on both sides of this imaginary fence.
Sponsoring only solves a part of the equation. The part where companies go the extra mile to build the society that their community wants. Companies have a responsibility to clean up their ways of operating. From materials to processes to waste management practices, a lot needs to evolve to create a circular model beneficial to all members of the cycle, even non-economic contributors such as pollinators.
Feel the burn
Despite a well-established misconception, businesses have already started engaging in a viable sustainable transition. In 2018, 100 mega-companies were responsible for 71% of total greenhouse gas emissions. These giants — almost exclusively financers, fossil fuel and agribusiness — hide a reality of climate commitment from the vast majority of SMEs.
In 2018 again, $437 billion have been invested in adaptation or mitigation efforts, of which 54% comes from the private sector. The upward trend is quite spectacular: project financers have increased their climate investments by 65% between 2015 and 2016.
The age of value-driven finance was ushered in seamlessly by a new generation of consumers that prize experiences over possessions, feels nostalgic for things they have never experienced (look up environmental melancholia) and is ready to go to great lengths to be on the right side of history.
Jumping on the climate change bandwagon
As governments create new norms such as the ban on single-use plastics in Kenya or in the EU under the pressure of civil society, companies and users adapt to the new demand. As more people decide to align their spending decisions with environmental consideration, feedback loops encourage companies to engage further on the road to sustainability. This phenomenon, known as the bandwagon effect, is currently working its full effects, as demonstrated by the advertising and content choices made by the leaders of the global economy during the Superbowl for example.
Plan A and others act as ferries between the two worlds to bring the best of social and economic impact into one. The goal in fine is to reconcile these humans under one green banner. Seriously, could the best diplomat find a better common ground than the extinction of our species?
Unity or extinction might sound like something out of a sci-fi movie. It probably is. But whoever was it that said that truth is often stranger than fiction? Let’s hope the next plot twist is in favour of the good guys.
This article was written by Plan A and published for The Beam Magazine. The Beam is a tri-annual print and digital publication featuring interviews, perspectives and articles from global experts in the field of climate action and sustainable development.