Saturday Essay: How Can Businesses Become More Environmentally Friendly?Atul Bhakta, CEO of One World Express considers how can businesses become more environmentally friendly?
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Living as we are through an age of unprecedented change, it is encouraging to take stock of the ways in which things are improving. For instance, over the last decade businesses have invested vast time and resources into adopting “green” initiatives” into their long-term strategies.
The ethical benefits of this are clear. However, it must be noted that businesses of scale are unlikely to be doing this as a purely philanthropic endeavour. Indeed, there is a strong business case for being more environmentally conscious; and being more visible in doing so than competitors. A study conducted by Nielsen in 2014 revealed that a majority (55%) of consumers are willing to pay a premium for products by companies who claim a commitment to “positive social and environmental impact”. This majority is likely to have grown in the intervening years as public awareness of various ecological issues.
One issue businesses will face in the short-term is how they can make substantive changes that will cut through to an increasingly well-informed consumer and business landscape.
The idea of a ‘sustainable’ product as a luxury good is worth some consideration. In recent years the debate on the environment has shifted clearly away from personal responsibility to the broader macro structures. Indeed, a Getty Images study conducted in 2020 highlighted nearly seven in ten (69%) of consumers feel they are already doing everything they can to reduce their environmental impact. What’s more, the same study found that 81% of consumers now expect a business to reflect their environmental initiatives in their marketing materials. Such figures suggest that efforts to reduce carbon emissions are now expected to be collaborative, with individuals and businesses sharing responsibility for the environment.
Positively, businesses seem to be responding to this trend. Television advertising sweeps and supermarket shelves are now dominated with clear declarations of sustainable practices. The influence of ethical consumption on both customers and potential B2B partners has made packaging and marketing a valuable instrument in attracting demand. For instance, many businesses have already reviewed their packaging and decided to make the investment in R&D and branding to overhaul how their product in the retail space.
For some, this has meant switching from hard plastics to recyclable materials, while other have introduced reusable packaging supplemented with lower cost and lower-impact recyclable ‘refillable’ products, offering a price incentive for customers to make the switch. The latter in particular is a bold business decision which has seen broad success. As such, it is interesting to consider how businesses within this can expand on these ideas to adjust their operations and supply process of the business to further reduce their contribution to emissions and environmental harms.
This is an encouraging context for authentic and substantial change. However, businesses must ensure that their initiatives to reduce environmental harms in the production and delivery of their product are precisely that; authentic. While there are clear benefits for a holistic approach when attracting customers, consumers will increasingly apply greater scrutiny to the minutiae of the businesses they choose to support.
A meaningful difference
It would be impossible to suggest a ‘one size fits all’ approach for businesses, nor what a realistic target for reducing harms would look like. Every company varies in factors such as their capacity to invest, long term capital security and the markets in which they generate revenue. Each of these are influential in determining the efficacy of any strategic environmental policy, and so it follows that business leaders must take the initiative to determine for themselves where their business can adapt.
Setting realistic targets will be important. While decision-makers will be well-placed to audit their internal operations and identify potential areas of improvement, external parties along the supply chain could ultimately hinder efforts.
As such, businesses should conduct a comprehensive inspection of their shipping and freight arrangements to better understand where they can improve in these areas; requesting emissions data from such partners would be the most effective method of achieving this.
From here, companies will be able to identify weaknesses and strategise appropriately – for example, firms could seek to invest in the reduction of CO2 emissions or plastic waste, but the business and environment will mutually benefit if decisions are taken from a position of clarity.
This may involve seeking external advice or consultancy where necessary. An environmental or management consulted will be able to conduct a thorough review of an organisation’s needs and make suggestions for gradual and sustainable change to supply chains and operations. What’s more, they will ensure that such changes do not hinder the businesses’ productivity.
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While largely limited to the public eye, the logistical transportation sector represents a tremendous proportion of the carbon emissions produced by the UK. In 2019, the UK moved 5 billion tonne kilometres – the measure of the distance travelled by of a tonne of freight – in and out of the country.
Of course, this is a function which many businesses could not exist without, and that much of our consumer landscape depends on. Careful consideration must be applied to how the scales can be tipped to support this sector, while pushing towards one which produces less ecological harms.
Addressing the issue of fuel used to facilitate shipping vehicles seems to be a sensible place to start. Newsreel footage of freight lorries queueing back for miles in ‘Brexit chaos’ will live long in public – and consumer – memory as a symbol of the precise unnecessary waste which is driving consumers to adopt more holistic purchasing choices. This should prompt businesses to consider switching to more efficient, greener fuels. Firms with more appetite to invest may even look to overhauling their supply lines altogether, replacing air with ship freight for international trade and depending on trains instead of lorries for domestic logistical plans.
Some may be understandably hesitant about committing to this. After an unprecedented period of belt-tightening among the uncertainty of the pandemic and a fundamental change in how our borders work, firms will naturally look towards the safest option. The logistics sector has proven through the Covid-19 pandemic that it is well-placed to allocate resources dynamically to meet radical changes in consumer behaviour and business requirements.
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It will also be the case, then, that economies of scale can begin to form around more sustainable shipping processes over time as they gain popularity. Firms with the most to invest will reap the rewards in the short-term through the visible credibility of their initiatives. Meanwhile, smaller firms will be able to follow their lead as production of greener fuels become cheaper, while sustainable domestic and international shipping processes will become more efficient.
Of course, the process of adapting the global logistical infrastructure network will take time, particularly as economies are only just starting to recover from COVID-19. However, with countries returning to a semblance of normality and revitalised confidence, businesses would be well-advised to revisit their long-term strategies and make smart investments based on the inevitable trend towards sustainable consumerism.
Increasingly, businesses which can demonstrate a credibly softer impact on the planet will be seen favourably by customers. Of course, no business will respond to this challenge in the same way – nor should they. However, with the support of a flexible and near-infinitely scalable logistics network, this should be seen as an exciting opportunity to research and invest in the kind of ideas which will secure businesses for the long run. The customer intent is already in place, as is the capacity to meet it – now decision-makers must seize the initiative.
Atul Bhakta is the CEO of One World Express, a position he has held for over 20 years. He also holds senior titles for other retail companies, underlining his vast experience and expertise in the world of eCommerce, trade and business management.