Covid-19 changes and climate: doesn’t need to be a black swan

Covid-19 changes and climate: doesn’t need to be a black swan

Covid-19 changes and climate. Heading towards sustainability.
Navigating our way towards sustainability

By Johanna Kloot and Leanne Kemp

The tragic spread of Covid-19 is ticking all the boxes for a black swan event and its impact will most likely change the way the world does business in the future. Covid-19 changes and climate are currently weaved in many discussions.

The deep economic shock of the virus — including unprecedented restrictions on travel and trade — are yet to play out fully. In time, as businesses, financial institutions and governments bounce back from the crisis, what will be the lessons learned? The growing need to manage for downturns by planning for worst-case scenarios. The need to remain open to innovation, as a catalyst for growth on the other side. Whether for start-ups or well-established enterprises, the need for leaders to keep communication channels open and handle crises with a calm determination.

Climate change meets the second criteria from above, insofar as the repercussions of global warming will be felt for generations. However, the case for sustainable processes has been well made for many years. There’s no surprise factor. The good news is that this message is cutting through and steps are being taken to mitigate the impact. Businesses are realising that going green actually saves money through efficiency gains, being the easiest way to improve profits. In times of reduced cash flows, the importance of keeping jobs and businesses solvent can’t be overstated either.

Given the pressures of running a business, sustainable resource use and carbon footprint reduction might not always have been a top priority — but the associated cost savings and moral integrity are pushing them up the agenda. There are less tangible benefits too, such as increased sales from brand trust and by demonstrating credentials as a good social corporate citizen. Improving workplace culture with the transition to sustainability can also grow staff loyalty, which reduces the cost of staff turnover and attracts high-quality candidates.

Customer influence

Increasingly, businesses around the world are responding to their customers’ clear instructions that green means yes. In fact, an online survey of nearly 30,000 people by Accenture, conducted across 35 countries, found that two-thirds of people have a keen nose for goods and services that share their own life values — including the need to protect the planet.

Customers vote with their wallets — and they listen to their kids, who are increasingly ‘woke’ to sustainable practices. For example, if a supermarket is using too much plastic or clocking up too many food miles, then it risks losing out to competitors who prioritise these issues.

More than 80% of customers hold companies and brands with an eco agenda in higher regard than those without, according to an international survey by thinktank Engine. Millennials demand green, carefully researching where their spend is invested. The world got savvy too. Greenwashing is no longer tolerated as a marketing exercise. Truth and Transparency in company operations are no longer opt-in.

These two Ts have become so important to the bottom line that a whole industry has emerged to help businesses and their supply chains get a grip on the economic, social and environmental benefits of truth and transparency. For example, technology companies GreenKPI and Everledger.

Automating sustainable practices

GreenKPI, an Australian sustainability software company, fosters a clean, green and equitable global supply change where businesses are profitable, the planet is healthy and people are sustainable consumers.

The company combines three functions to advance sustainability: practical guidance with assignable sustainability actions to improve efficiencies and productivity; analytics on impact through resource use measurement and management; and automated sustainability reports that capture actions, efficiency gains and reductions in resources and costs. Through their solutions, GreenKPI delivers reduced operating costs, increased brand trust and reputation, a more engaged and loyal workforce, and a strengthened basis for a more sustainable world.

Ever more knowledge

Everledger has grown rapidly in recent years in response to this demand for sustainable, verifiable sourcing by clients in the jewellery, wine, battery recycling and apparel industries.

The Everledger platform enables buyers and sellers of high-value assets to trade with confidence. Their enterprise-grade blockchain platform provides a secure record of an asset’s origin and journey by surfacing the asset’s lifetime story. For example, diamond mining companies and retailers can evidence ethical and sustainable practices to consumers who want to know beyond doubt that their precious stone is conflict-free. Likewise, wine producers and collectors can gain ever more clarity about the provenance of each bottle, in the face of mass counterfeiting worldwide.

Everledger is also working closely with leading trade bodies such as the World Economic Forum and OECD to help ensure that technologies such as blockchain progress within an ethical code that will benefit the highest number of people worldwide. There is growing momentum coming from tech-for-good and social entrepreneurs to show that the advantages of an environmentally and socially-responsible business are, in fact, economical.

Think how products that reduce reliance on natural resources (e.g. rainwater tanks, solar hot water systems) also save money and relieve pressure on the environment. Products that are made from recycled material (e.g. office supplies made from recycled plastic, furniture made from recycled rubber) also answer the call from consumers for reduced waste, and are therefore socially and environmentally accountable.

Innovation from within

Often, the best way to start a sustainable strategy or refresh an existing one is to hold a risk and opportunity identification session. Items for discussion could include: how to mitigate the combined risks of resource availability; current trends in consumer choices; financial institutional requirements; and political pressures for regulatory changes.

Ideas for new opportunities can come from looking at how others are pivoting. For example, one of the largest non-utility producers of renewable energy in the US is a company that has little to do with power — it’s a warehousing company that realised it could generate extra revenue by leasing out the roofs of its facilities for solar panels.

Another route in for CEOs is to galvanise the bright sparks across the company, who may already be having brilliant ideas in their coffee break. In signally their intent to transition to sustainability, bosses can inspire staff to come up with plans and even incentivise them to think like start-up entrepreneurs. It is often the case that employees know the operational practicalities better at the floor level than those in the boardroom.

Of course, the world first needs to move on from Covid-19. As supply chains come to terms with what just happened, there is a real opportunity for businesses to take a lead on sustainability. Examine the business through the lens of GreenKPI’s — act, measure, analyse, monitor, share on your product, process and purpose. This approach can help to make a business more sustainable and also resilient against the next black swan event.

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Why is sustainability important for business?

Sustainability in business is important to gain a competitive advantage. Lower costs through efficiency gains and higher sales with improved brand trust equals increased profits. Plus there is the bonus of doing the right things for society and the environment.