6th May 2023See What we can do
A future where enterprises and society as a whole function in a way that produces more positive consequences than negative ones on the environment, society, and economy is referred to as building a net-positive future. This entails going beyond merely minimizing adverse effects and putting more of an emphasis on generating advantageous social, environmental, and economic effects.
For instance, creating a net-positive future can entail lowering carbon emissions to combat climate change, supporting ethical labor practices and sustainable sourcing to benefit communities, and creating items that can be recycled and reused to cut down on waste and protect natural resources. Businesses must have a comprehensive strategy for sustainability and actively work to have a positive influence at every link in their value chain.
Additionally, to address complex sustainability challenges and build a more sustainable future for everyone, businesses, governments, and civil society must work together. Companies may create long-term value for themselves, their stakeholders, and the environment by constructing a net-positive future.
More changes have occurred in the last two years than in the previous 20 in terms of what society expects from business. We passed the tipping point as a result of a pandemic, escalating and increasingly expensive natural calamities, the murder of George Floyd, assaults on democracy, and other factors. Corporate leaders can no longer ignore significant societal changes or refer to human and environmental problems as "someone else's problem," both practically and morally. Companies must actively participate in addressing our biggest shared concerns for their benefit. Without healthy people and a healthy earth, the economy will not prosper.
No company has yet accomplished this difficult objective. But more people are starting the journey. Their leaders are putting pressure on governments to move more quickly on climate policy, establishing targets for becoming carbon-positive, making bold commitments to racial equity, and speaking out against laws that limit voting or violate the rights of LGBTQ citizens. To address systemic challenges and shared problems, they are developing extensive collaborations with suppliers, customers, colleagues, NGOs, and governments. In C-suites around the world, the idea of "stakeholder capitalism" and the notion that business has a responsibility to society is becoming conventional wisdom.
Building a net-positive future necessitates fundamental shifts in how businesses run, which can be difficult and may involve several challenges. Here are some challenges businesses are running into when attempting to create a net-positive future:
Significant expenditures in new technologies, supply chain optimization, and personnel training are needed for many sustainability initiatives. Companies can find it difficult to defend these expenses to shareholders and investors.
Regulations and policies can vary widely across different regions and markets, making it challenging for companies to develop a consistent sustainability approach. Additionally, regulations may not yet exist in some areas, leaving companies to navigate sustainability challenges on their own.
Businesses may place a higher priority on short-term financial results than on long-term sustainability goals, which might discourage investment in sustainability projects that might not yield quick financial gains.
Some businesses might not have the essential knowledge and instruction on sustainability, which makes it challenging for them to recognize chances for improvement and take action.
Many companies operate complex supply chains that can span multiple countries and involve numerous suppliers. Ensuring that all suppliers adhere to sustainable practices can be challenging, and companies may lack visibility into their supply chains, making it difficult to monitor sustainability performance.
It may be challenging to implement new sustainability initiatives and practices since some employees and stakeholders may be averse to change.
Small and medium-sized businesses in particular may find it difficult to obtain funding for sustainability efforts.
Companies must adopt a strategic approach to sustainability to solve these issues. They must match their sustainability objectives with their business goals and include sustainability in their fundamental business procedures. This could entail involving stakeholders, funding staff education and training, and collaborating with authorities, non-governmental organizations, and other partners to create beneficial regulations and policy frameworks.
There are many existential risks for those who miss this seismic upheaval. They won't be favored by conventional economics, society won't accept them, and the next generation won't work for them. We provide insight from Unilever, which one of us (Paul) oversaw for ten years. The consumer juggernaut has received widespread recognition for being a pioneer in the transition to net positive: For 11 years running, sustainability experts have recognized it as the best company in the world. Success did not conflict with financial performance; on the contrary, it fueled profits and expansion. Unilever's overall shareholder return during Paul's tenure was close to 300%, much above that of its competitors.
Early on in his time at Unilever, Paul introduced the Unilever Sustainable Living Plan to give the company direction and a wider perspective. That innovative project, which has since been widely imitated, set ambitious goals to improve the lives of a billion people, reduce the firm's environmental impact in half, and enhance the livelihoods of millions of women and smallholders in the supply chain.
These were company-level objectives, but Unilever also pledged to serve numerous stakeholders at the brand level to create financial success. The Lifebuoy soap company's global handwashing campaign is the biggest of its "purpose-led" marketing campaigns. In close collaboration with UNICEF, Lifebuoy has educated hundreds of millions of kids and expectant mothers about the health advantages of washing their hands, preventing millions of deaths from diseases that could have been avoided.
Renewable energy technology:
Companies are reducing their dependency on fossil fuels and converting to clean, renewable energy sources thanks to renewable energy technologies like solar panels and wind turbines. This is crucial because switching to renewable energy sources can aid businesses in lowering their greenhouse gas emissions and reducing the effects of climate change. Fossil fuels are a key driver of climate change. For instance, Google has committed to using only renewable energy to power its data centers and has made investments in several renewable energy projects, including wind and solar farms. IKEA is still another illustration; it has 1.7 million solar panels atop its stores and warehouses across the world, providing 27% of its overall energy requirements from renewable sources.
Advances in sustainable materials, such as bioplastics and recycled materials, are enabling businesses to make goods that have a smaller environmental impact and generate less waste. Businesses can lessen their reliance on non-renewable resources and their environmental effect by using sustainable materials. For instance, Coca-Cola has released a bottle made entirely of recycled PET plastic, while Adidas has created a running shoe made from recycled ocean plastic. Another illustration is Interface, a maker of carpet tiles, which has created a method for turning used carpet tiles into new ones, so decreasing waste and fostering circularity.
Models of the circular economy:
Businesses are designing products for reuse, repair, and recycling with the aid of circular economy concepts like closed-loop supply chains and product-as-a-service business models. This lessens trash generation and the negative effects of items on the environment. Additionally, circular economy models have the potential to give businesses new avenues for growth and sources of income. For instance, TerraCycle's shopping site Loop collaborates with well-known companies to supply reusable packaging for goods like ice cream, shampoo, and cleaning supplies. Another illustration is Patagonia's Worn Wear program, which provides apparel repair services and a trade-in program to increase product longevity and decrease waste.
Green building technology:
Energy-efficient building materials and intelligent building systems, among other green building technologies, are assisting businesses in lowering their energy usage and carbon footprints. Businesses may lower their operating costs and enhance the health and well-being of building occupants by designing and constructing buildings with sustainability in mind. For instance, Apple Park, the company's new headquarters, uses only renewable energy and contains energy-saving elements like solar panels and natural ventilation. Another illustration is the Bullitt Centre in Seattle, which is intended to be the greenest office building in the world and has amenities like solar panels, composting toilets, and rainwater collecting.
Artificial intelligence and machine learning:
Advances in these fields are assisting businesses in streamlining their supply chains and operations for maximum effectiveness and the least environmental impact. For instance, businesses can utilize AI to improve the efficiency and logistics of their transportation and logistics systems. Additionally, machine learning can be used to anticipate and stop equipment breakdowns, cutting down on waste and increasing resource effectiveness. For instance, nestle has created an AI-powered tool that analyses the data from its supply chain to spot areas where it can make improvements, like using less water or using more environmentally friendly packaging. Another illustration is the optimization software created by logistics firm Convoy, which utilizes machine learning to improve transportation routes and cut empty kilometers, so lowering fuel use and emissions.
Carbon capture and storage:
Companies are now able to capture and store carbon dioxide emissions, lowering their overall greenhouse gas emissions. This technology is crucial for sectors like cement and steel manufacturing that are challenging to decarbonize. Companies may lessen their environmental effect and support worldwide efforts to cut carbon emissions by capturing and storing them. For instance, the Petra Nova project in Texas, the largest CCS project in the world, is capable of absorbing up to 1.6 million tonnes of CO2 from a coal-fired power station annually. Another illustration is the NET Power project, which produces electricity from natural gas while absorbing and storing all of the carbon dioxide emissions.
A net-positive future, where enterprises and society as a whole produce more positive consequences than negative ones on the environment, society, and economy, is essential to ensure a sustainable future. Businesses need to go beyond just minimizing adverse effects and focus more on generating advantageous social, environmental, and economic outcomes. While building a net-positive future is challenging, companies can adopt a strategic approach to sustainability, match their sustainability objectives with their business goals, and include sustainability in their fundamental business procedures. Despite challenges such as cost considerations, lack of regulatory framework, and resistance to change, innovations such as renewable energy technology, circular economy models, and social impact investing are helping companies move towards a net-positive future. With the increasing recognition of stakeholder capitalism and the importance of businesses' responsibility towards society, companies must actively participate in addressing shared concerns for their benefit. A net-positive future can only be achieved through collaborative efforts between businesses, governments, and civil society to address systemic challenges and shared problems, with the goal of creating a sustainable future for everyone.