Sustainability is becoming an increasingly fundamental issue for leaders in the business world. Climate change directly affects the lives of millions of people and the fate of all other species on the planet.
As a result, taking care of the world’s natural capital – the world’s availability of natural resources such as water, oxygen, and soil – has ought to become a focal point for Earth’s inhabitants.
It is no hidden fact that business cannot exist without incorporating sustainability practices. Sustainability practices help ensure the business’s long-term success. Doing business in an eco-friendly way also helps develop better relations with shareholders and stakeholders across the board.
There are a ton of difficulties caused by climate change impacting society today. Greenhouse gases, resource deficiency, warming global temperatures, and population growth have all intensified the burden on governments to take the necessary legal measures to ensure companies’ work towards fulfilling specific sustainability targets.
A Dutch court most recently ordered the oil giant Shell that it would have to cut its businesses’ carbon emissions faster. The court’s argument resided upon the fact that Shell’s business activities heavily contribute to increasing global temperatures. As a result, they are violating basic human rights.
Previous to the court’s order, Shell announced that they have plans to implement sustainability practices within its business. Shell had the target goal of becoming a net-zero emissions company by 2050. Yet, the court is ordering for them to step up.
This is just one of the most recent examples of businesses facing increasing legal pressure from governments to help protect Earth’s natural capital.
The World Has a Natural Capital Debt That Oughts to be Repaid
The world is not taking Earth’s most urgent needs with the urgency that the situation demands. Just as a nation or business has to repay its financial debts, it ought to repay the natural capital debt they owe to the world.
When a business, for instance, doesn’t have the funds to repay its loans, it’ll end up in bankruptcy. The same happens with Mother Earth. If we fail to repay Earth for the natural resources we’ve been overconsuming, we’ll all end up in bankruptcy.
Only that, in this case, bankruptcy doesn’t mean shutting down a business. Bankruptcy in terms of falling to pay the world’s natural capital debt means that the human species’ survival will be threatened.
Implementing sustainable business practices is no longer a question of whether it needs to be done. It’s a question of how and how fast it can be accomplished.
The business world will be the most affected by climate change. Businesses primarily depend on essential natural capital resources such as land, water, soil, fossil fuels, and stable climate conditions.
Food companies, for instance, won’t be able to properly raise cattle, plant crops, or predict harvest times if weather patterns are unstable. Fossil fuel companies won’t survive if they don’t make a fast enough pivot towards renewable energy production.
Making corporations more sustainable starts with being aware of the problem’s urgency. Understanding how significant it is to implement sustainability practices — both for the economy and the planet — is the first step.
Natural Capital and Business Sustainability Goes Hand in Hand
Sustainability involves fulfilling our present needs without risking the needs of future generations to satisfy their future needs. Business sustainability as a notion believes that the environment is an exhaustible resource.
Therefore, businesses need to conduct their operations in a way that is in harmony with Earth’s natural capital. Conserving them for future generation’s welfare and prosperity is key.
Most people associate business sustainability with climate change. Yet, business sustainability is also present in several other contexts involving economic growth and social responsibility. These contexts comprise the Earth’s carrying capacity, the sustainability of ecosystems, diversity, and inclusion, and so on.
Conducting business operations while conserving Earth’s natural capital is vital for businesses to thrive. It’s not only primordial due to the fact that consumers are demanding greener products and companies. It’s also about keeping the company’s best interest at heart.
A company that depends upon Earth’s natural resources must give the natural capital used the time to heal and encourage its recovery. Otherwise, the whole ecosystem could collapse.
When businesses abuse Earth’s natural capital, they are putting the environment at risk. They are also posing a social and economic liability to humankind’s survival.
Take a look at what’s happening in the Amazon Rainforest. The Brazilian government is encouraging the Amazon’s deforestation. The Amazon Rainforest regulates the Earth’s global temperatures and weather patterns. Therefore, by doing so, they are posing a threat to the entire Earth.
Overusing Earth’s limited natural capital can lead to biodiversity loss, droughts, global warming, floodings, and resource scarcity. These factors all heavily impact humanity’s capacity to sustain itself.
Business Sustainability Ties It All Together
Business sustainability refers to running operations without adversely affecting the environment and society. Through sustainability practices, companies can reduce their impact on Earth’s natural capital.
It’s about how a corporation manages its financial, social, and environmental actions. It’s no longer viable for a business to profit at the expense of the environment. By doing so, companies are neglecting their own self-interest.
It’s like chopping down a tree to get the most amount of fruits from it. It’s a short-term, irresponsible strategy. Why not collect the seeds and plant more trees instead?
It’ll enable the business to continue reaping its production benefits while sustaining future company leaders to do the same. As a result, both the company and the community benefit through the conservation of the ecosystem.
When businesses fail to accept responsibility for their actions, adverse effects can generate environmental degradation, inequality, social injustice, and resource scarcity. When sustainability practices are in place, organizations can ensure that their short-term selfish gains don’t turn into long-term irreversible damages to the environment.
Companies can successfully implement sustainability strategies by adopting what environmentalists refer to as natural capital accounting.
What is Natural Capital Accounting?
Natural capital accounting is a standardized approach for businesses to assess and value their direct and indirect influences on natural resources.
Natural capital accounting seeks to encourage businesses to measure and better supervise the flow and stock of the natural capital expense of their operations. It tries to promote better business decisions by measuring how enterprises interact with nature.
Why Business Can’t Exist Without Sustainability
According to research from McKinsey & Company, organizations with solid sustainability practices have reduced debt and equity costs. Why? Sustainability can help enhance financial performance and protect the greater good.
Expectations on business responsibility are on the rise and transparency is becoming the norm. Consumers, the media, and government entities are becoming increasingly more rigorous regarding how businesses interact with the planet.
Sustainability in business isn’t just favorable for the climate or society at large. It’s also beneficial for business growth in numerous ways. Here are just a few of the many advantages of adopting sustainability practices.
Business Sustainability Can Help Decrease Expenses
Companies can decrease their business costs by adopting green methods. For example, employing more efficient lighting or creatively recycling and reusing materials will help save money.
Greening your company may require an initial investment, but they pay off in the long run. The federal government in several states offers various tax credits and other forms of compensation to businesses adopting eco-friendly practices.
Business Sustainability Can Help Enhance a Company’s Reputation
Reputation management in business is about building a good image by aligning messages with actions. Consumers today, more than ever, value sustainability. Companies going green send the message that they care about more than just profits. Chobani, Patagonia, Karun, and others are reaping the effects of such strategies.
There are plenty of benefits to businesses becoming more sustainable. Reducing costs, innovating, improving reputation, and gaining new customers are just some of the benefits. Companies can thrive by making the right choices.
What is Good for the Planet, is Good for Business
Businesses that are guided by the right values and motives will be the ones outperforming and outlasting competitors. Innovation driven by the need to protect Earth’s natural capital better and better serve the community will receive the support of the people.
At Topic Insights, we believe that business is the greatest vehicle for change. Doing well by doing good is what will make values-based businesses stand out. For more actionable content sent straight to your inbox, we invite you to subscribe to our newsletter.