Sustainability awareness is slowly gaining traction in the business world. Business sustainability consciousness refers to the recognition of the limits to growth imposed by finite planetary resources, as well as the consequences of unrestrained growth. As a result, it may lead to a higher evolution in which business sees its role as realising and serving self- and societal needs.
However, due to differences in internal and external business environments across sectors and geographies, this awareness has not reached all businesses to the same extent or level. Environmental factors such as the severity of environmental challenges as a result of emissions from certain sectors, regulatory pressures at national and international levels, high levels of consumer awareness and willingness to change, and, last but not least, the availability of technological or non-tech alternatives and their affordability may be attributed to high levels of consciousness on the part of a business.
Unmindful growth strategies and established businesses’ complacency, on the other hand, have a cost for those who dismiss the sustainability trend or remain ignorant. Tangible losses during a sector’s sustainability transition may include obsolete technological assets, a catch-up phase with all the risks that entails, such as market share loss now or in the near future, and difficulties in acquiring or adopting new technologies. And some businesses are already experiencing this.
In the automotive sector, the transition to sustainable mobility is inevitable. Amara Raja and Exide Batteries, market leaders in conventional lead acid battery technologies, have seen their market value slide as electric vehicle mobility is slowly becoming the norm. Both these companies are attempting to reorient their strategy and it remains to be seen how they will regain their position.
In the case of electric vehicles, Bajaj Auto tried to stifle a growing trend by filing a legal challenge in the Delhi high court, but their request for licences for CNG vehicles in Delhi was denied due to excessive air pollution in the city, leaving the field open for electric vehicles.
Further disruptions are predicted by McKinsey in a recent report on the aircraft industry, where the production of a large number of electric aircraft (eVTOLs – electric vertical takeoff and landing aircrafts) in short-distance travel segments by 2030 is expected to disrupt regular aircraft travel.
Coal companies are already under scrutiny. Because many coal companies are owned by national governments, regulatory pressures are low at the national level in comparison to the auto sector, and switching to renewable energy sources is seen as a long-term solution that may take time. However, environmental concerns are prevalent in this industry, and alternative technology, such as renewable energy sources, is already available. The willingness of consumers and businesses to adopt renewable energy sources is increasing.
To keep global warming to 1.5 degrees Celsius, the GCEL database (Global Coal Exit List) recommends phasing out 78 percent of coal energy by 2030. The List keeps track of companies planning coal plant expansions and works with financial institutions, investors, governments, and banks to limit or deny such companies financial support. Similarly, the LNG/gas industry is being chastised for its greenhouse gas emissions. While LNG is seen as a better alternative to coal, and some countries are investing in more LNG terminals, environmental watchdog groups such as the US EIA and the NRDC say its entire operations, including exploration, drilling, and production, produce unacceptable levels of emissions.
Environmental challenges in the textile industry are rather well known such as synthetic dyes, pollution of water bodies and water intensive fabrics such as cotton. Some promising signs are the emergence of technology platforms like Circulate by Microsoft that support the reuse of gently used garments. There is a perceptual barrier that eco-friendly textiles are a premium category in the eyes of the average consumer.
A few industries are becoming increasingly aware of the sustainability trend and are making a concerted effort to invest in it. Surprisingly, India, Indonesia, and China lead a global list of 30 countries in terms of concern and willingness to pay for sustainable packaging, according to a recent McKinsey report on the global packaging industry. The report also mentions that regulatory compliance for sustainable packaging is increasing around the world. Similarly, the trend in the energy and construction industries is toward renewable energy and energy efficient buildings, respectively.
Businesses will need to incorporate sustainability considerations into both their current and future business strategies. Individuals, organisations, and entire eco systems are all affected by sustainability issues. Ignoring it is not an option. Instead, businesses will benefit from reexamining their entire product or service life cycles, beginning with small initiatives such as resource conservation and progressing to larger issues such as renewables, extended producer responsibility, and the entire life cycle of products and services.