Over the last few years, there has been a relentless push for eco-friendly and sustainable alternatives for various products and services for companies in all sectors. However, with the ‘green agenda’ set to be a top priority for businesses and governments across the world – are we making any progress? Or is it just a PR exercise? Business Leader investigates.
In recent years, it has become increasingly common for businesses and governments to show they are engaging with the green agenda, and to rightly make steps towards a more sustainable future.
But In reality, what Impact are businesses having and what measures are they taking? Whilst many clearly are making a positive difference, is it still the case that some are using ‘greenwashing’ techniques – and saying they’re ‘green when they’re not – to boost their credibility?
Senior Director of Global Sustainability at World Kinect Energy Services, Therese Gjerde, comments: “Historically it has probably has been more about ‘pretending’ to do the right thing to ensure positive PR, than actually taking real action. However, a lot of companies have been called out for ‘greenwashing’ over the last couple of years. The reputational risk related to such media scrutiny is significant, and this has ensured that businesses make sure that they can stand behind what they are saying to a much larger degree.
“If they take it seriously enough it can always be debated. As consumer awareness is increasing, especially amongst millennial consumers, we are starting to see that the environmental impact of a product is becoming a decisive factor when a purchasing decision is being made. Buyers are open to switching brands in support of products they perceive as more sustainable. This is starting to impact businesses financially, and with that, I do believe the attitudes will have to change dramatically. Businesses need to take it seriously rather than seeing it as a PR and marketing objective.”
Craig Campion, Head of IT Asset Disposal at Stone Group, agrees that businesses are taking the issues seriously: “Sustainability is genuinely moving up the agenda for many organisations, identified in our recent survey of over 250 UK public and private sector organisations as a top priority for over a third (37%).
“However, many organisations are just guilty of paying lip service to sustainability, and in reality, don’t back up their promises with real action. They’re talking the talk through their marketing and PR, but not walking the walk.
“While there is a job to be done to raise awareness of the importance around sustainability, organisations should not be allowed to make empty promises.”
PR and marketing are key tools to any business, but with consumers becoming more aware of the wider world and sustainability, greenwashing could eventually lead to a company’s demise.
Simon Hombersley of Xampla comments: “Greenwashing is still a very prevalent issue, and there are numerous household names point scoring by bringing in surface-level initiatives and commitments that lack teeth. There are whole industries and sectors lagging behind. We live in a globalised world and each and every company has a part to play in driving the sustainability agenda forward. Businesses will be held accountable to unsustainable habits and failure to reinforce sound, sustainable, and ethical practices into business strategy will be a serious disadvantage further down the line.
“Businesses must respond and adapt if they are to operate within evolving regulations and conscious markets.”
However, with a focus on the triple bottom line and the emergence of sustainability groups, such as the B Corporation – real change is starting to happen – and if companies don’t get onboard now, they will suffer the consequences.
Martin Thatcher, Managing Director of Thatchers Cider says: “From our point of view it’s about doing what we believe to be the right thing. And if all companies take steps to do that – in whatever industry they work in and on whatever scale – then we will see more change. We believe it’s important for brands to tell people – their customers – what they’re doing.
“If customers trust in your brand, they want to know. Your customers can be your strongest ambassadors, but they can also be your harshest critics. If they think what your company is doing is greenwashing, they’ll soon call you out!”
CHALLENGES TO ACHIEVE CHANGE
A recent YouGov study sought to identify the barriers that could be preventing businesses from making further progress towards hitting sustainability targets.
Budget is the biggest hurdle, with many businesses seemingly not being able to afford to put the required measures in place. 29% admit COVID-19 has delayed their business’ sustainability goals, as they are more focused on financially getting through the pandemic, while 22% say Covid-19 has had an impact on the business, but their sustainability strategy and goals have continued as normal.
Aside from the financial challenges switching to become more sustainable creates – the obvious issue that has hampered the UK’s shift to becoming ‘green’ is the pandemic itself.
Professor Peter Hopkinson, University of Exeter Business School, comments: “The challenge for many is working out what to do, how to do and how to prioritise it. Given the pandemic, eyes may have been taken off the sustainability ball, as business survival and coping with the consequences of lockdown have understandably been top of the agenda.
“There is always potential for issues such as zero carbon, plastic waste and loss of biodiversity to be given more serious attention.
“The risk for those businesses who don’t take it seriously is they may find their customers, supply chain or wider society will force them to or risk being put out of business in the future.”
In 2019, the UK government became the first nation to declare that it would bring all greenhouse gas emissions to net zero by 2050 – meaning that all businesses would need to play their part. But are they ready?
Gjerde comments: “Despite some sectors leading the way to reduce their carbon footprint, we are still coming across so many businesses that simply aren’t ready for net-zero.
“The 2050 deadline is a lot closer than people think and it can take time to develop a realistic, achievable, strategy and even longer to implement it. Organisations must act now and start their sustainability journey. Net-zero targets could be brought forward, so ignoring the deadline may lead to penalties or larger pay-outs further down the line.
“There are also many direct impacts of climate change on businesses such as operational impacts of extreme weather, or even supply shortages that businesses should start to prepare for.
“Also, the risk of business disruption, penalties, and liabilities on historical carbon emissions are scenarios that are starting to become more and more realistic. And, ultimately, businesses that are not acting will be punished by investors, customers, and other stakeholders, and are facing the risk of bankruptcy.
“Businesses should start to see climate change as a business opportunity. Not only by reducing costs by improving their resource productivity, but also considering climate change as a core in innovation, by developing new products and solutions to meet our challenges and changes in consumer behaviour.”
WHAT CAN THE UK REALLY DO TO HELP?
It is clear that the tide is shifting towards businesses being more open and helping the country become more environmentally friendly, but one of the debates has been that if the USA, India, and China do not actively make a difference, then how can a small nation such as the UK really make a difference?
However, as one of the world’s leading economies and sustainability innovators, UK businesses will play a pivotal role in the future of the environment.
Andrew Griffiths, Director of Digital and Community at Planet Mark, comments: “The short answer is if the UK wants to be a true global leader then we’re not going to achieve that by sitting back and waiting to see what the USA, China, and India do before taking meaningful action. In a similar vein, the fact that SMEs represent such a huge proportion of the UK economy as a collective, the same is true of nations in the global economy.
“Imagine the reverse of this question – what if China, USA, and India DO act and the UK and other nations with smaller footprints don’t?
“The only way that we can meaningfully tackle the challenges presented by climate change is to pull together across all nations and segments of society to take action in coordinated and complementary ways without spending all of our time just trying to keep up with what we perceive to be the level of action that others are taking.”
And despite being dwarfed by China and the US economies, Britain has always taken a lead in the green revolution, a business will need to continue to do so to be a success on the international stage.
Ricky Knox, Co-founder and CEO of Tandem Bank, states: “The UK is the fifth-largest national economy in the world. It is also a major force in international diplomacy, one of the world’s leading military powers, the second highest international development donor, and it has a huge global cultural influence. The UK can, therefore, still play a big role in the global fight against climate change.
“Think, for instance, of Britain’s 2008 Climate Change Act, the world’s very first legally binding national commitment to cut greenhouse gas emissions. Or the fact that, in June 2019, the UK became the first major economy in the world to pass laws to end its contribution to global warming by 2050. It is paramount that UK businesses of all sizes unite in this fight – in true patriotic, Churchillian spirit – and evolve to respond to the challenges of our times and help the UK keep its primacy on the global stage.”
ARE BUSINESSES THE KEY TO A SUSTAINABLE FUTURE?
With the UK needing to continue to strive towards its Net Zero 2050 goals, and other sustainability targets, businesses will need to be beacons for others around the world to follow.
Hopkinson comments further: “We are in an era of incredible scientific and technological innovation and business has a crucial role to play in the commercialisation, marketing and delivery of game changing product, service, infrastructure and system level re-design. Legislation and regulation help to set the right framework conditions for change but it takes innovators and entrepreneurs to show the way.”
And it is these business leaders that are the key to a greener future. Griffiths said: “The United Nations Race to Zero campaign is the perfect metaphor for what will happen to businesses that don’t act. It is a race and there will be winners and losers. Uniquely, however, this is a race that if we don’t collectively run fast enough together, we all lose. This means we can’t act in competitive isolation but let’s not forget that there will be substantial benefits and advantages for those who lead the way.
“Those who do not take meaningful action will face increasingly rapid changes in public opinion, legislative requirements, environmental shifts, technological innovation and other pressures that will pull the rug out from under their ‘business as usual’ approach faster than they can adapt to it. We know what happens to businesses that fail to adapt. They go the way of Blockbuster, an example of a business that failed to innovate and adapt in the face of the inevitable.”
Capitalism and commercial success have never alwayss married up to eco-friendly business decisions – but that will need to change and the businesses who adapt to this the fastest look set to thrive long into a post-Covid future.
Hombersley comments: “Businesses are guided by consumers who are becoming increasingly conscious of sustainable business practices. There is a rapid generational shift in attitudes to business. Customers want to buy from companies who practice and promote positive values; and will boycott those that don’t. And the consumers of the future are those that have grown up surrounded by the environmental crisis, so we know it’s going to be a priority long into the future.
“If companies do not shift to a sustainable model, they will lose their ability to operate. And this will not only be driven by consumer behaviour, but increasingly businesses will be regulated, taxed, and threatened by voters who no longer find unsustainable business acceptable. The world operates in a capitalist system, but if capitalism is to survive the coming decades, it needs to evolve to fit the values of the societies in which it operates. Those values are changing, fast.”