N Sunil Kumar, Head of Sustainable Banking, Performance and Development and Head of RBS Foundation India
Since humans started trading, dealing with the weather has been paramount for conducting business. Apprehensions over climate change are taking this engagement with weather to a new level, and businesses will need to adapt to the growing regulatory, environmental and consumer demands to carry out business that is salubrious to climate and friendly to the environment.
Climate change will hurt economies, destabilise populations, deepen resource insufficiency and radically impact the cost of doing business. So, for both humanitarian and business reasons, it is imperative that businesses of all sizes must act. Simultaneously, it is imminent that more belligerent climate policies be imposed by governments at national and international levels; so from a business perspective, dealing with climate change is an imperative for three good reasons.
The first is to adapt by recognising the risks and to take measures to secure assets and facilities to altered conditions adaptation. Secondly, to contribute to mitigation by doing business that is less damaging to the climate, and finally, to turn the situation into an opportunity by differentiating their products as climate ‘clean’. It is however, a matter of time before climate clean products will emerge as the standard products that consumers demand.
In October last year, the Intergovernmental Panel on Climate Change (IPCC) report mentioned that it is still possible to peg the global temperature rise at 1.5°C; some sections of the research body fears that we may have breached this already. This was the echelon demarcated in the Paris Climate Agreement as the brink beyond which the world would experience calamitous and irrevocable climatic shocks and pressures. But to maintain the temperatures at 1.5°C would entail exceptional climate action, setting the planet on track to decrease emanations by 45 percent from 2010 levels by 2030 and hit zero emissions by 2050.
Smart businesses, globally, aren’t waiting. Prominent companies around the world have started benefitting from the opportunities. In the current climate scenario, businesses that can innovate and make the most of low-carbon transition will usher in a sustainable future. This actuality makes sustainable development and climate change two sides of the same coin.
Trade is the world’s most dominant economic force, and it is accountable for the bulk of spending, wealth creation and investment. Where trade goes, everything else follows. Ground-breaking initiatives from business are part of the universal shift that will open the floodgates to across-the-board opportunities that can battle climate change and change the lives of people across the world.
There are many ways to take on climate change. Companies should try to calculate, reduce and counterbalance their carbon footprint. Carbon footprint refers to the total sum of greenhouse gasses that a human being, business or product releases either directly or indirectly, and can be calculated to find strategies that help decrease them. Companies should also use renewable energy. There are constantly more businesses using clean energy. Using renewable energy is the best alternative because they not a net addition to the carbon stock in the atmosphere; moreover, renewables have actually emerged as cheaper energy source.
On the brighter side, greener products are coming up in several industries. The construction and infrastructure sectors are developing products and services that cater to cleaner cities, such as renewable integration, electric-vehicle charging infrastructure, smart metering, smart grids, and high-performance building technologies. In the B2C sectors, new segments are making inroads as people are eager to pay for greener products. Groceries are promoted as sustainable and the organic-food sector has seen considerable growth in recent years. This is a testimony of the surfacing of a major legion of customers, for whom ecological consciousness is a factor in where and what they buy.
One approach is to implement a “design to sustainability” approach, in which new products are premeditated to curtail waste and to be broken down for reuse or recycling. Another is to redefine corporate strategy to ally business interests with climate-change alleviation and adaptation. Averting a humanitarian and environmental crisis is motivation enough to act with exigency, but there is also a business case for doing so. Going green offers companies an excellent storytelling perspective to be used in marketing inventiveness to make sure their brands are meaningful and germane to consumers because they align around shared values.
Businesses must act to tackle climate change for business, humanitarian and planetary benefits. Companies should measure their emissions, make a climate action plan and support policies that advance climate change mitigation. Failing to do even this bit would not only hurt businesses but also our future in the long run.
The writer is, Head of Sustainable Banking, Performance and Development and Head of RBS Foundation India.