Low carbon, high growth?
Can businesses drive low-carbon solutions forward without sacrificing growth? Paul Connolly, Director of the Management Consultancies Association Think Tank, offers his opinion.
Debates about sustainability are vexed. The quarrelsome atmosphere around climate change has infected the word’s meaning and put some people off. We should remember that sustainability means the capacity of something to be sustained.
When it was first suggested that humans threatened the finite supply of natural resources through overuse, conservationists emerged. In the early days, these were largely conservatives who wished to husband resources prudently to keep things as they are.
Many notable climate change deniers and fossil fuel lobbyists come from the right. Their equation of action on climate change with unnecessary business burdens resonates, especially in times of austerity. An environmentally friendly David Cameron went to the North Pole during the UK floods. More recently, he characterised a pro-business budget as one without the ‘green crap’.
Scientific evidence for man-made climate change is overwhelming. Most people accept it and want to do something, but it is ineffective preaching to the converted, as they often lack the power to take action.
However, the Management Consultancies Association’s (MCA) recent report Low Carbon, Higher Growth, released in November 2014, focuses on those who can do something – businesses. But it appeals to their enlightened self-interest. Put crudely, the earth’s resources are finite. Some of them, such as oil reserves, are in the hands of people who are unreceptive to western interests. Irrespective of climate change, it still makes sense to minimise waste, maximise reuse and seek new – and, especially, self-sustaining – sources of energy supply. If, in doing so, we can reduce business costs, attract new customers and increase profits, all the better.
MCA members who work on sustainability and contributed to the report believe the enforcement of new regulation isn’t the answer. Instead, they are translating sustainability into business opportunities. Managing energy, through energy service company models and intelligent design and build or by minimising raw material use, can save money. Businesses that foreground their green credentials can garner reputational capital and the loyalty of new green-aware generations of consumers.
Our members also often re-spray low-carbon initiatives as cost-cutting ones, to overcome the scepticism that the pursuit of low carbon is beneficial to a business. In doing so, they are reorienting sustainability back to its base meaning and fostering an emerging grain of business thinking, focused less on managing sustainability’s compliance burdens and more on seizing its opportunities.
In the coming months, sustainability consultants will continue to implement this shift of language and incentives. They will examine the business potential of leasing and sharing models touched on in the report. They will also investigate how new technologies can improve efficiency and reduce carbon dependency. Data analytics can improve sourcing and supply chain management, while digital inventories of raw materials and products could support reuse, recycling and circular business propositions. This could help to remove insurance and regulatory barriers that perversely favour using new materials rather than serviceable recycled ones.
Sustainability consultants want to save the planet. Their trick is to do so in ways that even the most committed climate change denier couldn’t object to.