Addressing Sustainability for the Future

Addressing Sustainability for the Future

While businesses are taking great strides towards climate action, there is still a lot of progress needed to obtain a sustainable climate solution. Some businesses still view sustainability as a PR issue but as one of the speakers at COP25 said, “CSR is dead. Now companies must truly integrate sustainability into their business to achieve a truly sustainable business model.”

There are many leading companies working to achieve this integration of sustainability throughout their business, such as those present at COP25 in Madrid. But what are some of the barriers to achieving this?

Panel discussing actions needed to promote industry transformation at COP25. Photo by Katelyn Boisvert

One major issue for a lot of corporate sustainability initiatives and action in local governments is a lack of fossil free electricity. Without this, the progress that can be made in the energy sector is limited. This is a major concern for transportation and mobility focused initiatives.

Another issue is the lack of differentiation of function from means. In the transportation sector especially, too much focus is placed on solving the issues of the car industry instead of solving mobility issues. This causes businesses and local governments to fall back into current patterns instead of considering innovative changes that could have a larger impact for climate.

There are three other major concerns for businesses: supply chain thinking, value creation and transparent data.

In order for any corporate sustainability effort to be successful, supply chain thinking must be expanded. Supply chain emissions can account for up to 80% of a company’s total emissions, and not addressing this is a major loss for the sustainability of a business.

Recently, Daimler (Mercedes-Benz) has set a goal of only sourcing from zero-emissions suppliers by 2039. As a result, companies are rushing R&D dollars into low carbon steel and other products in order to supply this demand, thus expanding the corporate sustainability movement. Microsoft is also looking towards its supply chain and is working closely with CDP to require suppliers to report to the program. Just as companies are willing to make changes if asked by their investors, suppliers will work to create sustainability initiatives if asked by their retailer.

Currently, economies of scale is the major driver of business action. Unfortunately, the source of value for sustainability initiatives will never be able to come from volume and thus their value must arise from a system other than economies of scale. As this system is yet to be created, there is a major question point for business leaders about where the value for sustainable initiatives will be sourced. Consumer actions and interests in sustainable products may offer a potential solution, but consumer interests are not yet of a scale to support ambitious change in the business sector.

One of the last major issues for companies working to implement sustainability initiatives is access to measurable and transparent data. In order to determine solutions and evaluate effectiveness of initiatives, companies must be able to access data on their company and others working towards similar programs. CDP is one program working to improve emissions data availability, but many companies still lack the ability to obtain accurate information within their own operations.

Me in front of SDG blocks featured at COP25.

Overall, my time at COP25 taught me a lot about the innovative approaches being taken by business to tackle the climate crisis, as well as some of the shortfalls and areas of improvement that need to be addressed in the coming years.

As I prepare to enter the field of corporate sustainability, the lessons and skills I have learned from my time exploring the interactions of business in the climate conversation will be invaluable.


Public-Private Partnerships

Outside of a few countries stepping forward, like the EU’s pledge to be net zero by 2050, current climate policy is not strong enough to adhere to the Paris Agreement and make significant strides towards combating the climate crisis. Governments will not be able to achieve goals on their own, and current trends are increasing pressure on the private sector to step up for climate. Businesses will hold the key for effective climate action, and for companies, climate change is increasingly becoming the core of a responsible business model.

However, businesses alone are also unable to achieve goals independently, just as much as governments can’t. The only way to combat the climate crisis will be to establish effective and ambitious public-private partnerships.

Panel discussing integrated approaches for business and public sector. Photo by Katelyn Boisvert

Many of the side events and pavilion events at COP25 in Madrid presented speakers from both public and private sectors in order to discuss the potential for collaboration and the solutions and needs of each group. A common question asked by moderators in these panels was for the public and private actors to switch roles and discuss what they would like to see brought to the table.

This provoked fascinating conversations about some of the disconnects between public and private actors, and the solutions to bridge the gap between these two entities. Business felt that they could offer invaluable scale and climate solutions, but were in some cases restricted by current legislation. Nonprofit members and local governments called out to businesses to be the leaders of the climate movement and to help encourage policy transformation.

A great example of public-private partnerships occurs in cities on a regular basis. Cities are in a unique position in that many city services are provided by the private sector, offering an opportunity for public-private collaboration efforts focused on sustainability. There are three common areas for such programs:

  • Energy Efficiency
  • Waste Management: including increasing recovery of materials and/or  increasing energy from waste initiatives
  • Transportation: such as fleet monitoring and optimization 

Policy action could offer a great way to support and engage businesses. Business leaders at COP25 asked for governments to create transition policies that give time for business to adapt, but also set stringent goals of where they should be heading.

Businesses need to encourage this type of policy transformation and seek out partnerships with the public sector. While climate policy may currently be at a standstill, especially in the U.S., business can serve as models for climate action. The experience of the private sector can support the initiatives of the public sector and together, we can tackle climate change.


Coming Up Next In Sustainability

While circular economy certainly took the stage at COP25, there were many other topics that arose in side events and discussions surrounding corporate sustainability efforts. These topics represent areas of interest in sustainability that are gaining momentum in the corporate world. More conversations on these topics are expected to emerge over the next year and have an even greater presence at COP26 in Glasgow next November.

Adaptation

Side event discussing the importance of adaptation strategies in the private sector. Photo by Katelyn Boisvert

Adaptation is no longer a concern for countries and cities alone, but many businesses are starting to look towards developing adaptation plans. Adaptation planning offers many incentives for corporations including: managing risk and avoiding reactionary costs; capitalizing on new markets and business opportunities; and ensuring compliance for policies, regulations and investor interests.

As the narrative shifts and begins to highlight opportunities for companies, many are realizing the importance of addressing areas of risk for the business, especially in regard to their supply chains. Without changes in the strategy, governance and risk management of corporations only small-scale efforts will get done, and adaptation planning is an important step towards achieving these changes.

Land Use

Land use is a new area of concern for businesses, such as Mars and Danone, whose climate goals depend on the use of the land where they grow the ingredients for their products. For Mars, emissions from deforestation and land use for the production of cocoa accounted for the greatest proportion of their carbon footprint. They are working towards ensuring there is no deforestation on lands they use and also are supporting reforestation efforts.

As corporate sustainability continues to grow, company liability for land use change is a likely future. This raises a lot of questions and concerns, especially around the idea of double-counting and the interaction between deforestation and a company’s reforestation efforts. Deforestation must be accounted for prior to any reforestation efforts could be counted in order to avoid many of these concerns.

Other companies, such as Danone, are pursuing options including regenerative agriculture. These types of farming practices have a three-fold sustainability benefit helping to increase biodiversity, mitigate climate concerns and improve food security issues.

Water

Water offers a cross-cutting solution to many climate challenges. It is a complex issue but there are many strategies available for resilient water management. Water resilience can be achieved locally, with the key being to bridge the gap between the public and private sector. Both the production of potable water and the treatment of wastewater are critical to aspects of both public and private sector activities and must be considered equally by both.

The private sector plays an important role in the goal of reducing carbon footprint through changes to packaging, transportation and waste of water. With the rise of the circular economy, water is on the list of resources to become circular, as several companies are already looking towards strategies for packaged H2O and other water intensive products.

Plastic

Panel discussing the role of plastic in mitigating carbon emissions at COP25. Photo by Katelyn Boisvert

Plastic is an issue quickly gaining momentum in many countries, cities and businesses. Speakers at COP25 discussed how the plastics issue may be ten years behind the climate crisis, but it also potentially easier to solve. One of the speakers described waste as a “design error”. For companies it is important to understand your products and the waste they produce to be able to address the plastic issue effectively.

Many solutions have been proposed, from bio-based products to banning plastic products, however each of these alternatives needs to be carefully considered depending on the situation to ensure that it is the most sustainable alternative. Some bio-based products are not decomposable, and may potentially have higher emissions. This leads back to the importance of addressing the waste issue at the initial design stage and having a better understanding of where we actually need to use plastic versus other material options.


Reduce, Reuse, Re… Circulate?

The buzzword at COP25 in Madrid was Circular Economy. From business to water to land use, everyone was talking about the concept of developing a more circular economy, and this is right at the heart of corporate sustainability.

One of many panel conversations on circular economy at COP25. Photo by Katelyn Boisvert.

Currently, most products are disposed of after use. The culture surrounding products is make-use-dispose, but circular economy is working to change that model. Many people assume that circular economy is the same as recycling, but instead it takes it a step further, working to reuse or repurpose materials to keep them in the economy and preserve resources for other uses. 

So many potentially valuable products, such as electronics, are thrown away on a regular basis. One of the speakers at a panel I attended joked about how the future mining operations of the world won’t be in the ground, but in the drawers and attics of people’s homes. 

45% of emissions are a result of how we make, use and handle our products; how we grow our food; and how we manage our land. This shows that these sector economies need to change in order to become more sustainable.

There are two main ways that companies can work to improve circularity in their business and reduce emissions:

1. Product Design 

Circular Economy of O’Right Shampoo Products. Diagram from O’Right 2018 CSR Report.

Many companies are starting a movement to prevent emissions at the source by reevaluating the design of their products in order to be more sustainable and circular. At an event I attended at COP25, IKEA discussed how they are re-evaluating their entire product line to align their products with their climate goals. 

Another company which presented at Investment COP, O’right, based in Taiwan, is creating shampoo completely out of used coffee products. The bottles are fully biodegradable and each has a coffee seed in the bottom, encouraging consumers to grow a new coffee plant from their bottle— a perfect image of the idea of circular economy. 

2. Customers

The carbon footprint of a shampoo product is 90% the use of the product—the hot water and/or the use of a hairdryer. While the use of a product after you buy it is not often considered in the footprint of the product itself, this is an important step towards moving towards a more circular lifestyle and economy. 

As circular initiatives continue to grow, they could offer a new edge of competitiveness for sustainable businesses. Currently, many circular economy programs focus on recycling programs. However, new and innovative pilot programs, such as programs for appliance re-manufacturing, will be the future of circular economy.

Circular economy is gaining momentum, but there is still a long way to progress. In the beginning of 2019, the Platform for Accelerating the Circular Economy (PACE) published a Circularity Gap Report highlighting leadership and actions needed to bridge this gap.

Overall, circular economy plays a key role in improving the sustainability of a company. The power of a company’s supply chain and their connection with consumers can be used to drive change in the private sector and beyond.


COP25: Time for (Business) Action

One of many official COP25 signs seen at the conference, highlighting the “Time for Action” slogan. Photo by Katelyn Boisvert

While the decisions made at COP25 fell short of its goal to be a COP of action, many conversations and commitments were made outside of the negotiation rooms. Reports on the negotiations throughout COP25 make the past two weeks sound like an endless stalemate, when in reality, walking through the halls of the IFEMA Convention Center in Madrid was a journey filled with vibrant activity and those passionate about climate action. 

Me, visiting the IETA Business Pavilion at COP25 in Madrid

As a member of the Emory delegation to COP25, I attended side events, explored pavilions, and met with individuals committed to taking the next steps on climate. In particular, I spent the week following the role of businesses and corporate action in the climate conversation. 

With many policies and government actions at a standstill, businesses are stepping forward to do their part. Many side events that I attended had a business presence, even those that were not focused on business action. This shows how integral the private sector is in all conversations related to climate change and sustainable development. 

COP25 offered a multi-sectoral dialogue on the business world with leaders in government and non-profit sectors also contributing to the conversation about the wants and needs of business. I learned a lot about how businesses can be involved, important next steps, and the challenges preventing more ambitious action. It was inspiring to see the steps that corporations are taking to tackle climate change, and their goals for a more sustainable future. 

It is increasingly becoming clear that the private sector cannot ignore climate risk, just as much as the climate crisis cannot ignore the private sector. The private sector accounts for 60% of the world’s GDP, 80% of capital flows and 90% of jobs. This offers an incredible opportunity to create new jobs, finance sustainability efforts, and develop goods and services to become more climate resilient. 

Business leaders at COP25 discuss business ambition for 1.5°C pledge. Photo from We Mean Business

Yes, sustainable business doesn’t solve the problem on its own. There are still many very real issues with business dependence on fossil fuels, greenwashing and unsustainable investments, but there are also companies that are taking real steps towards addressing climate change. At COP25 the number of signatures on the Business Ambition for 1.5°C pledge more than doubled from 87 to 177 companies committed to ambitious climate action. 

It won’t solve the climate crisis but whatever we do solve is more than we had yesterday. So as much as the negotiations at COP25 were stuck in inaction, we cannot afford to confine the business world to the same fate. We must celebrate the small victories that occur in the private sector and support engagement and ambitious action for the future.

In the words of Barack Obama,  “If you’re walking down the right path and you’re willing to keep walking, eventually you’ll make progress.” For me, COP25 was an opportunity to see the paths that businesses are walking and I was encouraged to see the number of companies walking down the path for climate. 


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