WIKI

The Past, Present and Future of Sustainable Business

How it all began, and the vision of a sustainable business future 

The role of business in building a sustainable future: how we got here

Today, “sustainable business” is a phrase at the forefront of modern business strategy, but this wasn’t always the case. It took us some time to arrive at the junction where business intersects with a greater environmental and social purpose.

Just a few short decades ago, sustainability had yet to become an intrinsic part of day-to-day business. Businesses focused primarily on shareholder value and initiatives, such as sustainability existed as part of a marketing strategy: climate action wasn’t discussed in a business context. In the 1980s and 90s, most of the world’s businesses didn’t yet consider their carbon footprint, let alone carbon offsets as a key part of their operation.

For businesses, sustainability was merely an auxiliary activity rather than an intrinsic part of the business plan. Basic initiatives such as on-site paper recycling or annual, symbolic small-scale tree planting were actions an organization might implement as a means of driving its “green efforts”, which were one small part of a wider corporate social responsibility (CSR) program. 

Today, the role of sustainability in business has matured. The broader global society is increasingly aware of the need to go beyond token activities to make a genuine commitment to helping combat climate change at scale.

The World Economic Forum has included climate change as one of the “top five long-term risks”  in its 2020 Global Risks Report. It linked the long-term threats of climate change to investment and growth opportunities, highlighting the need for greater environmental action efforts within the private sector.

This shift towards actively acknowledging the need for stronger climate action programs has been mirrored by the actions of industry leaders through their involvement in efforts such as tree planting; which help work towards the net zero emissions targets set by governments and international organizations. As a consequence, today’s corporate commitment to sustainability is no longer a one-off act of tokenism; instead, sustainability now exists at the heart of an increasing number of businesses’ overall strategies. 

The role of business in building a sustainable future: A fundamental shift in business

The adaptation of sustainability towards becoming an integral part of a company’s strategy is largely due to the fact that the role of business itself in society has changed. 

In the early 2000s, following the ratification of the Kyoto Protocol in 1997 to reduce carbon emissions, governments and businesses around the world became increasingly focused on sustainability. Businesses no longer exist solely to maximize profits and add value to shareholders; consumer interest and desire for green brands grew as sustainability became a household word. In light of these cultural shifts, companies began to evolve internally from implementing solely CSR programs to developing and implementing ESG (environmental, social, governance) programs as part of their core values and operations. 

The corporate implementation of ESG signaled to investors that environmental risks could be mitigated while the companies continued to generate long-term financial returns. Today, 80% of companies worldwide report on sustainability metrics.

One example of how the shift towards sustainability has become integral to business is evidenced in the 2019 Business RoundtableStatement on the purpose of a corporation.” Signed by 181 CEOs, the statement committed a vow to lead their companies for the benefit of all stakeholders, including communities. This, in essence, codified the modern standard for corporate responsibility. The statement reads: 

“Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth. While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.”

This is demonstrative of how, over the past several decades, a modern approach to business has evolved, and with it, a greater emphasis on corporate social responsibility and corporate sustainability. Corporations leveraged this move towards sustainability to improve their reputations and expand market opportunities. Over time, corporate focus on carbon reduction, ethical sourcing, energy conservation and land restoration through tree planting has intensified.

According to the consulting group McKinsey, “When companies fully leverage their scale to benefit society, the impact can be extraordinary.” The consulting company goes on to say, “Business also has an opportunity, and an obligation, to engage on the urgent needs of our planet, where waiting for governments and non-governmental organizations to act on their own through traditional means such as regulation and community engagement carries risk.

At Land Life Company, we recognize this shift towards the role of sustainability in business and we help some of the world’s largest companies meet these goals by developing, implementing and following through on large-scale reforestation projects around the world. Tree planting offers companies a way to have a positive impact on a global, lasting scale. We champion tree planting as a priority tactic for facilitating improved corporate social responsibility.

We live and breathe the commitment to sustainability and as the business landscape continues to grow in this direction, particularly in relation to net-zero emissions goals, we help companies develop bespoke, impactful, large-scale reforestation projects to meet these goals. To date, we have planted over 3.6 million trees globally on our mission to restore the 2 billion hectares of degraded land around the world.

Defining Corporate Social Responsibility (CSR)

As defined within the aforementioned “Statement on the purpose of a corporation”, the shift from profit-driven responsibility to greater responsibility to society and its players at large —   including employees and communities —  shifted along with it the corporate approach to social and climate-related issues.  

Focus on sustainability has moved from being a standalone corporate social responsibility (CSR) initiative to a strategy embedded into companies’ core business, meaning that sustainability sits at the heart of every decision a company makes. Clearly, this also means that CSR is now innate within every company. But what does it truly mean for a company to have a CSR program? What is the value add and impact that a CSR program can affect outside of the organization itself? 

To answer these questions, it’s important to first understand that CSR is a key, strategic management concept wherein companies integrate their social and environmental concerns into their business operations, in a way that takes into account their stakeholders —  who are not only those with a financial interest in the company, but also its employees, vendors, and the wider community. 

Hence, CSR helps corporations drive sustainable performance, meaning a harmony between their financial, environmental and social objectives. Sustainable performance balances these objectives within the delivery of a company’s business activities while maximizing value to shareholders.

Forces driving CSR

The issue of climate change first started to gain traction in the corporate space following the United Nations’ Paris Agreement in 2015, which set out a goal of limiting the rise in global temperatures to an average of 2 degrees above pre-industrial levels and to try to keep the increase below 1.5C. These targets were adopted almost ubiquitously by nations around the globe. Moreover, they also changed how corporations began to view their role in global efforts to curb climate change. 

Climate change initiatives have since ramped up, with many countries, including the UK, China, Sweden, France, South Korea, Japan and New Zealand taking on commitments towards achieving net-zero emissions by various future dates. 

With the commercial sector responsible for a large number of carbon emissions, sustainability targets —  which include net-zero emissions targets —  have been adopted by many companies looking to contribute to the global targets. 

Race to Zero, a global campaign launched by the UN, aims to unite support from businesses, cities and investors, to create a sustainable future that protects the environment while adding jobs and driving sustainable industry growth. 

Comparing CSR with ESG

Now that we’ve established what CSR is, let’s look at another phrase we touched on above, which is heard increasingly commonly in the business world today —  ESG. What does this actually mean and how does it relate to CSR and, more specifically, sustainability?

ESG stands for “environmental, social, and governance.” Its criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. When it comes to climate change, investors are heightening their scrutiny of organizations’ commitment to reducing carbon emissions. 

In fact, in its 2021 Letter to CEOs, prominent investment management company BlackRock highlighted the issues which will have durable value to stakeholders and trends that will drive business in the coming year and beyond.

In the letter, BlackRock CEO Larry Fink discusses “The Opportunity of the Net Zero Transition”, wherein he states that every company’s business model will be affected by the transition to a net-zero economy: 

“A successful transition – one that is just, equitable, and protects people’s livelihoods – will require both technological innovation and planning over decades. And it can only be accomplished with leadership, coordination, and support at every level of government, working in partnership with the private sector to maximize prosperity.”

Proof that a commitment to sustainability —  in particular, that which helps solve the problem of climate change —  should be front of mind for any company seeking investment in this modern age. With sustainability now increasingly embedded in each global organization’s proposition from the outset, the private sector acknowledges its wider-reaching responsibility to contribute sustainably to climate action. 

Business strategy and CSR

Helping mitigate the effects of climate change is now an increasingly important objective at the top of each company’s long-term strategic agenda, with key investors calling for the private sector to do its part. How companies prepare for the economic transition to net-zero will be directly affected by how investors prepare their portfolios accordingly. 

With greater investment in companies that adhere to climate science and make a commitment to driving actionable change to mitigate threats to the environment, we will continue to see efforts to curb climate change play a central role, embedded closely into the overall business strategy itself. 

The means by which companies operate will tie deeply into the work they do to ensure their carbon footprint becomes —  and remains —  neutral. At Land Life Company, we’ve witnessed firsthand the power of reforestation at scale to aid in long-term removal, or sequestration, of carbon dioxide from the atmosphere, helping to slow or reverse atmospheric CO2 and to mitigate or reverse global warming. 

As we continue to see strong climate change commitments from companies across sectors, we are glad that the market is catching up with what we’re doing here at Land Life Company. 

What does it mean to be a sustainable company?

Becoming a sustainable company means departing from sustainability as a CSR strategy and embedding sustainability into a company’s core business. Every action undertaken, whether to work with a specific vendor or devising methods of manufacturing, will be viewed through the lens of sustainability and how the actions of each choice contribute to climate change and associated solutions. 

This is where a carbon footprint calculator can be helpful. Greenhouse gas emissions are categorized into three groups or ‘Scopes’ by the most widely-used international accounting tool, the Greenhouse Gas (GHG) Protocol

Carbon footprints capture GHG emissions outputs on an annual basis. In order to determine its carbon footprint, a business must gather data from different sources including travel, logistics and operations in order to gain a full and accurate view of its total carbon footprint. 

When a company measures its carbon footprint using this Scope rubrik, the measurements will encompass a view into a company’s sum of Scope 1 direct and Scope 2 indirect emissions from its operations, in addition to all material Scope 3 emissions —  the indirect emissions from activities outside an organization’s own operations.

Upon completion of its carbon footprint calculation, a company can then decide the best course of action towards mitigating the detrimental effects of its carbon footprint. A number of actions are available for companies to consider, including large-scale reforestation projects that remove CO2 from the atmosphere and rebuild biodiversity, while also supporting the United Nations’ Sustainable Development Goals (SDGs)

The Benefits of CSR in a Sustainable Business

Ultimately, when discussing the benefits of CSR today, what we’re really talking about are meaningful changes taking place at the heart of an organization to integrate sustainability into the core of an organization’s operational mission. 

Forward-thinking businesses have known for some time now that being a sustainable business is essential to being a modern business. Many of these frontrunners exist in the tech space. Take Microsoft, for instance, which has made a commitment to becoming carbon negative by 2030.  To achieve this, it has issued an RFP seeking a million metric tons of carbon removal with the intention to harvest and share the best available science and market intelligence on carbon removal to make it easier for other companies to follow suit. 

Meanwhile, Google, which has been carbon neutral since 2007, has made a further promise to become carbon-free by 2030. To achieve this, the company is pursuing new carbon-free energy generation and storage technologies, setting an example that a decarbonized future is possible. In addition, the tech giant has made a public pledge to create the tools, build the platform and share the data required for everyone to conduct their business more sustainably. 

In both of these examples, Microsoft and Google demonstrate that they are paving the way for the big and bold solutions that are necessary to tackle climate change. Companies in other sectors, such as clothing brands Patagonia and Zalando, are also leading the way in walking the talk when it comes to sustainability, with both brands making commitments to carbon neutrality and taking action to achieve their carbon goals.

As you can see, the benefits of embedding CSR in sustainable business are many —  positive outcomes are environmental, social and economic in their impact. For example, actions to restore degraded land through tree planting not only have a positive impact on a company’s carbon footprint and help the efforts towards mitigating climate change, but also have the potential to revitalize local economies, strengthening entire communities. That’s interconnected, measurable change. 

Planting trees takes time, as will solving our current climate crisis; but, together we can all get there, by making a commitment to take one step at a time towards net zero. Find out how your organization can make an impact on climate action through reforestation projects at scale by getting in touch today.