The new business model: Greening the Corporates

Without wishing to conform too rigidly to the stereotype of hyperbolic and scaremongering nature of environmentalists, life on this planet as we know it is on a set course to destruction and it’s businesses fault. The commercialised industrialisation of our environments and lifestyles has allowed economic growth, living standards and societal advancement to prosper. But at the same rate these essential principles of modern life rose, the bounty and sanctity of the natural world have perished. Corporate ownership has put human gain above the environment consistently for the last 200 years. From the ground churned up during the gold rush, fumes from factories coating the atmosphere above us, and vast swathes of natural flora being destroyed to make way for our expanding territories and to appropriate resources to make more stuff. Our need for more stuff, more money, more ownership has encouraged a business ethic treats the environment and its materials as its own personal piggy bank, that’s now left broken beyond repair.

The processes inexorably tied to our modern lifestyles that provide light with the flick of a switch, next day delivery, opulently parcelled goods that are cheaper than the sum of their parts, and all other aspects that come in the built-in package of being a citizen of an industrialised nation, come at grave damage to the rest of the world.

Factories are the epicentre of much of the harm caused to the planet due to their intense usage of resources and irresponsible disposal of the unused assets. The processing and manufacture of resources into goods regurgitates standard materials into a toxic cocktail of sulphur dioxide, nitrogen oxides, methane, and the infamous carbon dioxide, and a whole host of other solvents and particles. These pollutants wreak havoc on the natural and built up world as they build up in the atmosphere and prevent heat from escaping, coat natural landscapes from forests to the coral reefs, and build up in the lungs of all living creatures, including us. Pollution of water systems from contaminated effluents disrupt the workings of the marine environment, killing life and alter the hormones of fish and crustaceans. Soil contamination leads to once fertile land becoming void of nutrients to sustain life. Waste clogs the land and water of every corner of the earth. Pesticides put huge swathes of animal and insect life under threat of extinction. Areas of natural beauty are flogged to make way for the expansion of our species. And the enormous variety of living organisms that have survived since the dawn of time are being wiped out. The list is endless, and like the true impact of humans and the environment they reject, can never be surmised into a neat category.

Despite the irrefutable truth of these consequences, businesses, combined with the growing individualistic culture that puts self before others, view the environment as an externality that is an inconvenience to profit. Even when you search for ‘environment and business’, the vast majority of results is about how the environment affects business.

Even if your business isn’t in the manufacture of plastic straws or lithium-ion batteries, white collar industries can put a massive strain on the environment. In the UK, office buildings that are slung up quickly to meet the growing demand of the digital culture and business are more often than not built with non-renewable concrete blocks, with irresponsibly sourced insulation that is ineffective at capturing energy loss from heating and cooling systems. These temperature regulators are also often massively inefficient and pump greenhouse gas emissions from tower blocks while consuming colossal amounts of energy. Lighting, computers, printers and photocopiers in office blocks around the nation contribute to the 15% of the UK’s greenhouse gas emissions that comes from commercial buildings. Wastage is embodied in the mantra of office blocks, with the average person working in an office using 10’000 sheets of paper a year, 7000 of those sheets, from accidentally printing something twice or only printing on one side is wasted. With 5 litres of water going to produce one sheet of paper, just the stuff you don’t use accumulates to 35’000 litres of water wasted from one office worker. The traditional 9–5 workday that calls for people to commute in rush-hour congestion produce more emissions, emitting on average 40% more greenhouse gases than standard, steady moving traffic. The jet-set employees that travel across the world to forge and maintain international relations need no explanation.

There are plenty of solutions to these environmentally questionable working conditions. From investing in renewable energy generators like solar panels, to simply plugging electrical appliances into standby extension leads that turn everything off after a period of inactivity. From movement sensor lighting systems, to simply making double-sided printing the default, there are systems readily available that allow natural processes to facilitate modern business practices. Renewable natural resources like rainwater and solar energy can be captured and utilised without extortion to provide electricity, hot water and grey water to flush toilets and for other non-drinking water appliances. Even the furnishings and kitchenware can be reflective of a conscious culture, from office supplies made from post-consumer content, to replacing all plastic kitchen amenities with reusable versions, to arranging for the coffee grounds and other organic waste to be sent to biofuel composters. Even wasteful habits like buying food from other venues that are often swathed in plastic containers that end up in the big designated for landfill, can be adapted. Introducing canteens that make batches of food — often more nutritious than a supermarket-manufactured sandwich — can be more sustainable since individual portions are handed out on reusable ceramic crockery rather than singular portions divided up in plastic containers. Behaviour changes can be gently implemented, by upgrading to bin systems that require the separation of waste, to phasing out plastic provisions, to making video conferencing the standard of meetings before air travel is put on the table.

But there’s often little incentive and a lot of reason not to invest in them. Because shareholders seek a quick return, organisations are often dissuaded from making costly investments that lower shareholder dividend. And since CEO pay-packets & bonuses are directly linked to share price, they won’t push it. But extreme changes in the environment will negatively impact how we do business and the security of many industries that are depended on for economic growth. A lack of resources along with less predictable conditions could plunge many businesses into foreseen — but not acted on — financial blackouts.

But there is a burgeoning demographic of environmentally conscious stakeholders who are changing the model of business as usual. Concerned with the economic return of low ethics companies, and sensing the turning market tide towards transparency, strong ethics, and a plan for the future, investments are pouring into businesses that measure profit and environment as two parts of a whole. This business model that would have been scoff-worthy a few decades ago is now the industry that is predicted the most growth over the coming years.

Corporations are also aware of this turning tide and invest massive amounts of money into Corporate Social Responsibility (CSR) teams to alleviate concerns of shady business operations. Lauded social and green projects get heavily marketed as a measure of their latest offerings to the world outside of business, appeasing consumers and investors with a deluge of greenwash, which is often no more than a Potemkin village — a literal or figurative construction built solely to deceive others into thinking that a situation is better than it really is. The fabled promise of TOMS shoes to ‘Buy-One, Give-One’, where a purchase from the brand would immediately donate one somewhere to the struggling populations of Argentina, Ethiopia, Guatemala, Haiti, Mexico, Rwanda, South Africa and more. But this project wasn’t about supporting the citizens of developing nations, it was about making Westerners feel good. The charitable act of donating a pair of shoes does little to solve long-term social, political and economic problems that have plagued these nations for decades. In fact, it often did more harm than good, by injecting a false economy of goods that was not sustainable. CSR teams often overlook the most basic adaptations that could be implemented to make business operations more efficient and instead focus on what looks most impressive on the companies ‘Responsibility’ page on their website.

Due to this veiled approach to green investments, certifications are cropping up to help investors and consumers wade through the jargon. But the abundance of green stickers with trees, thumbs up, stars and smiling faces has created an unnavigable compendium of labels for letterheads, packaging and website footers. One that aims to reduce this confusion is B Corp, a certification of sustainability that delves thoroughly into the inner workings of a company to access just how green they really are. Like the Fair Trade seal of approval on bananas and coffee, or the Soil Association certification on organic produce, the B Corp accreditation helps consumers and investors quickly identify that a company is as green on the inside as it claims on the outside. To achieve the endorsement, for-profit companies must meet rigorous standards of social and environmental performance, accountability, and transparency, all of which will be reassessed every three years, with the assurance that there is regular surprise in-depth on-site assessments on 10% of companies every year. Today there are over 2000 certified B Corps from 50 countries and over 130 industries, helping B Corps vision of the modern sustainable future as a place ‘where companies compete not only to be the best in the world, but the best for the world’.

Since shareholders can rest easy knowing that they can make money while making a difference, investments into B Corporations or other green-certified businesses is skyrocketing. The growing demand for transparency in industry is leading not just stakeholders to seek morality in brands. The relentless movement towards ethics in the public is forcing companies to move towards the green light in order to capture consumers favour; if a company can clearly assuage a consumer markets ethical morals, they can reap the profits. Due to this, sustainability has become a new arena in the strategy and operations of many businesses, pushing for a more transparent MO that has a positive impact on the environment and above all, on the bottom line.

This push towards green business has been relatively internal between the company, their shareholders and consumers. While governments, particularly in the UK, wrangle with multitudes of scattered green approaches and unrelated concerns, there are few policies in place that dissuade environmentally damaging practices. To put it simply, if there was a massive tax on business practices, from office buildings to manufacturing that is not carbon neutral like there is with cars, businesses would swiftly find a way to avoid the charge by adapting their energy usage and emissions.

But even the government have cottoned onto the ecological and environmental savings that can be made through sustainable investment. In 2010 The Environment Agency’s new office, Horizon House was opened; a grand building constructed in the middle of Bristol using over 85% of the materials from the demolished buildings. Flush with solar panels, automated windows that regulate ventilation and temperature, ground-source heat pumps, rainwater harvesting and smart lighting systems, the building uses almost 70% less mains water and 40% less energy than standard buildings. Employees of the building are encouraged to take more sustainable commuting routes, by offering bike storage and shower facilities, while dissuaded from using their cars by providing limited car-parking spaces. This government building provides a new template for the future in office buildings, though without extensive support and encouragement from the government to invest in green schemes, business as usual with undoubtedly prevail.

Reducing the environmental impact of your business will reap financial benefits along with ecological. Competitors who do not have climate change mitigation or sustainable running procedures at the forefront of their business will face expensive taxation and unforeseen natural consequences that a sustainable business will not. Sustainable enterprises are protected to a degree and will have a higher chance of long-term success, rather than the reactionary costs of natural disasters. As the door between our polluting past closes, companies who make it through in time will be rewarded with brand loyalty and high shares. But in the arena of business, those who limp slowly to the transition era will not be afforded a prize for coming last.