Inaction On Climate Change: A Choice Businesses No Longer Can Afford To Make
This month's cover story for the Harvard Business Review is a seven-part series called Mobilizing On Climate. The first installment, written by Andrew Winston of Winston-Eco Strategies, lays out clearly why current government efforts are simply not enough when it comes to slowing the catastrophic affects of climate change. Although the entire article is worth your time, here are a few key highlights that are worth thinking about and acting upon.
1. "Stakeholder-first" thinking doesn't work anymore.
Winston writes that "if we allow climate change to destroy the plant and animal ecosystems we rely on, there will be no replacements." Our current economic system is borrowing from our future every day by using up irreplaceable resources and creating byproducts that harm the ecosystems we rely on. The day is coming, and sooner than we think, where choosing not to wisely invest in our environmental future will result in massive economic loss.
2. Consumers + employees are demanding better.
If businesses will not take significant action to address climate issues, they risk losing the loyalty of the customers and employees they depend on. Winston cites a study from market research firm IRI showing that 50% of consumer packaged goods growth from 2013 to 2018 came from sustainability-marketed products. And employee protests demanding climate change action at Google, Microsoft, and Amazon have gotten the ear of their leaders.
3. Businesses have significant clout in pushing for more regulation.
Businesses have always had significant power in influencing politics, though most of this power has been used to avoid regulation. But to Winston's point outlined above, if businesses want to turn the tide of climate change to avoid irreparable harm, they need to be more vocal about raising the bar. Businesses that have already made significant strides towards sustainability will thrive in a regulatory environment that rewards those efforts, and it puts needed pressure on other businesses to do the same.
4. Businesses need to recognize their stakeholder influence.
Although businesses often cite stakeholder relations as a reason not to pursue a new sustainability strategy, with the right approach, they can effectively persuade and include their stakeholders in a joint sustainability approach. Assisting suppliers in pursuing more sustainable production methods, creating easy ways for consumers to use their products or services in an environmentally-responsible way, and rewarding employees for being an active part of company-wide sustainability goals are a few ways Winston suggests that businesses can wield their influence.
5. The way we invest in and operate businesses is undergoing a major shift.
Adapting to shifting regulations and demands is not enough. For some businesses, a complete shift in business model will be required. Businesses that operate in industries like plastics and fossil fuels need to be thinking NOW about how they can shift their investments, research, and operating power towards something more sustainable (like recycled goods or clean energy). This description of the circular economy from the Ellen MacArthur Foundation shows what businesses need to be striving for at every level of their organization.
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