Business leaders and Kermit don’t have a lot in common, but they’ll likely utter the same refrain, “It’s not easy being green.”
That’s because acting on climate change is full of uncertainty. But acting to combat climate change is something businesses must do. The underlying reason for the lack of confidence is that while public opinion is settled on the issue, it is not settled on the solutions.
Last year, an Ipsos Mori poll found that 85% of British adults are concerned about climate change. So, there’s is no denying that the vast majority of people accept that climate change is happening. However, perceptions of how the issue manifests itself and how to tackle it do not have similarly emphatic agreement.
Bags of strife
Five years ago, in an early move against single use plastic, the 5p charge for plastic bags was introduced. It saw dramatic reductions in the use of plastic bags, sales of which plummeted by 90% over the next three or four years. But late in 2019 campaigners began calling for a complete ban or higher prices for bags for life because of a worrying increase in sales figures. It was estimated that an average of 54 bags per household were sold. So, just five years in, supermarkets are again under pressure from campaigners to do more.
As campaigners have identified, the problem is convenience. Absentmindedly forgetting to carry a bag with you carries little pain if spending 5p or 10p fixes the problem. So here, people, who we know are concerned about climate change, fall back on bad habits for convenience. People don’t do the environmentally right thing because it is inconvenient. Businesses do not have that luxury.
Do the right thing? What is the right thing?
The difficulty for businesses is that the right thing to do is not clear. There are obvious things like installing motion sensing lights in offices, removing disposable plastic cups and cutlery, etc. At the other end of the scale, grand commitments are also relatively easy. Executives who commit to being carbon neutral or even carbon negative in 10 years’ time, can do so comfortable in the knowledge that they probably won’t be around.
It’s the material and medium term actions that are problematic. For example, if you’re a food producer that relies on a particular raw ingredient, how do you act on climate? Do you substitute out that core ingredient? If you do, you’ll potentially wipe out the communities that grow that product. Not good.
Alternatively, could you work with that community to grow its produce in a more sustainable way? That’s better, but how are your food miles looking? And is your crop production sustainable because you use new plant varieties that are more drought and pest resistant? Sounds like you might be locking that community into purchasing expensive seeds in perpetuity. And what about protecting biodiversity? I could go on. The point is that there is no simple, ticks-all-the-boxes solution.
It’s the same across most sectors. Solutions to unsustainable business practices are imperfect and create their own issues.
It’s not necessarily good for business
Going green is not necessarily good for business. Sure there are surveys that say customers will pay more for goods from companies that are environmentally friendly. And if you believe those surveys, I’ve got some bad news for you: people often say one thing and do another. Shocking, I know.
Usually at this point case studies citing Patagonia and Unilever are thrust forward. Patagonia, great brand, great work, genuinely focused on sustainability. But… high prices, premium products, niche clientele, difficult to scale. Unilever, corporate stakeholder darling, great story to tell. But… short on growth, divesting business units and only just avoided a takeover a year or so ago.
Marks & Spencer is the counter case study. It went full tilt at sustainability in a real way with its Plan A programme. Shwopping, recycled uniforms, supply chain reviews. It went the whole hog. Since it launched that plan in 2007 its share price is down by about 70%. Going green doesn’t negate the need for good products, strategy and management.
None of this analysis excuses businesses from their responsibilities. It aims only to highlight the complexity of the situation. The challenge is easily defined but the solutions are not clear cut. Businesses must act nonetheless. It’s not easy being green.