Even with the steep dip in greenhouse gas emissions during the COVID-19 lockdowns, last year saw record-breaking temperatures around the globe and another surge in climate-related disasters. Despite growing efforts from individuals, business and governments to allay the trends, true sustainability seems to remain a distant goal. However, this shortfall is not a cause solely for despair, but also represents a prime business opportunity for companies across industries and geographies. Some businesses can clearly see the financial incentives of genuinely participating in the generational transition to an entirely new way of powering the world. Harnessing change has always been a root source of wealth creation; with an existential need for innovation, a new phase of wealth creation stands before us: “the green rush.”
To better understand these dynamics and the scale of the opportunities available, our Center for the Future of Work partnered with MindForce Research to survey 1,000 C-suite and VP-level business leaders across North America and Europe in the midst of the pandemic. See interactive graphic below for a selection of detailed study responses. More broadly, the study’s main findings found the following:
- Europe outpaces the US in green measures. Businesses in Europe are more apt to increase sustainability spending than those in the US.
- Sustainability investments are linked to business gains. A majority of respondents globally expect such investments to increase sales and improve brand reputation, not merely satisfy regulations.
- Technology investment is key to combating climate change. A strong majority of study respondents list environmental sensors/Internet of Things (IoT) as important or very important to meeting their sustainability goals, with smart grids and artificial intelligence (AI) tied for second place.
- Emerging tech can catalyze current sustainability endeavors. Well-established sustainability approaches such as eco-friendly lighting and renewable energy are popular, but newer tech like AI and analytics could supercharge proven techniques — for example, by making energy audits easier and more valuable to conduct.
- ROI and senior-leader commitment are top concerns and will require a renewed look at sustainability strategies. As usual, these are cited as big sticking points for realizing sustainability goals.
- Underutilized sustainability initiatives that could result in quick wins are readily available. Low-budget but high-impact practices, such as reducing business travel expenses (post-pandemic) and buying refurbished electronics, could gain support needed for more sustainability investment. Indeed, the pandemic has been an inflection point for increased work from home (WFH).
Businesses should regard green initiatives not as “red” — a cost on the balance sheet — but as “green,” a money-making opportunity. There is already a surge of climate tech startups, and by 2030, the investment in green-business startups and corporate innovation is projected to grow to $3.4 trillion.
Technologies to help save the world?
If technology helped land us in the current predicament, it also may help us alleviate the damage. Businesses are incorporating the following cutting-edge technologies into their arsenals to fight climate change:
- Environmental sensors/IoT. By instrumenting ecosystems with sensors, businesses can enable always-on data feeds to accurately monitor environmental health, identify human impacts on natural resources, improve response times to fires and other emergencies, heighten traffic efficiency, help create more sustainable cities and more.
- Artificial intelligence. AI’s continuous learning capabilities and pattern recognition allow organizations to better understand the extent of emissions and environmental damage and model optimal change scenarios to pursue.
- Smart grids. Such grids, powered by renewable energy sources combined with smart devices that communicate real-time data, help reduce waste and dependence on fossil fuels, foster more efficient energy use and provide usage data that enables continuous improvement.
- Big data/analytics. The enhanced computation power of advanced analytics allows for diagnosis of vast ecosystems to assess health and optimize resource allocation.
- Blockchain. Blockchain allows organizations to cut paper-product consumption, thus lowering companies’ carbon footprints. The technology also is being used to track and report on supply chains’ level of environmental sustainability.
Synergies near at hand
When the cutting-edge technologies listed above are combined with widely used approaches to reducing the carbon footprint, they could turn tried-and-true approaches into game-changers that will curb climate change. For example:
- Eco-friendly lighting in facilities. Over 60% of respondents use eco-friendly lighting already. By adding IoT technology to the mix, businesses can further enhance their corporate carbon reduction — while lowering maintenance costs.
- Using renewable energy. Pairing investments in renewables with smart grid technologies alters the entire marketplace for energy production. The widespread adoption of renewable energy and smart grid technology by large corporate entities could make all companies “power companies.” New revenue streams emerge in such a scenario, along with new needs to manage and optimize power generating operations. The smart grid technology market is projected to grow from $20 billion to $61 billion between 2017 and 2023.
- Conducting regular energy audits. With commercial buildings in the US wasting nearly one-third of the energy they use, fixing this problem provides a great opportunity for sustainability at scale. Energy audits are widespread, with about half our survey respondents reporting they conduct them at their companies. Infusing AI into these audits changes a cumbersome and time-intensive process into a powerful tool for companies to continuously monitor their energy use to identify real-time opportunities for improvement — a good example of the convergence among IoT, AI and smart grids.
A few other quick wins for sustainable practice include:
- Encouraging WFH and less business travel. The pandemic turbocharged these trends, with Zoom meetings and virtual reality technology becoming the new norm virtually overnight. While we likely won’t return to the old normal, it remains to be seen the roles that remote work and teleconferencing (and related connectivity technologies) will play going forward. Companies can encourage WFH as a means of reducing the environmental impact of business operations.
- Switching to EV fleets. The “cool factor” of electric vehicles aside, their mundane commercial uses like shipping or public transportation stand to make a significant impact. In addition to lowering greenhouse gases, such a transformation could also impact the consumer market for EVs and usher in an entirely new ecosystem of electrified homes.
- Buying refurbished electronics. Despite the immense amount of waste generated by electronics, only 17% of respondents have implemented programs to buy refurbished electronics for their companies. In addition to the reduced environmental impact of buying refurbished goods, the practice is a proven job creator.
Charting a course
It’s easy to feel paralyzed by the sheer magnitude of the sustainability problem. The following recommendations should provide leaders with guidance and specific tasks to push past the inertia and maximize the value of innovations sparked by the green rush.
- Establish a stakeholder map. Green business transformation can impact stakeholders both internal and external, directly or indirectly. Mapping the relationships before implementation can facilitate stakeholder buy-in at all levels.
- Commit to dedicated space for sustainability. Businesses can establish credibility and consistency for their programs by dedicating specific resources in budget, full-time staff, time and portfolio considerations, and by committing to fully fund mitigation programs.
- Embrace the constraints of climate change. While some resistance to sweeping change is inevitable, it’s key to focus an organization’s energy on the creative problem-solving that sustainable practices require along with lowering carbon footprints.
- Let discovery drive growth. ln the face of ROI uncertainty, leaders should take a discovery-driven growth approach in which teams have the leeway to adapt business models in an agile manner, using feedback from experimentation and data.
- Reverse engineer your endpoint. Start with a bold vision of a radically improved sustainable future for the organization, and reverse-engineer the steps required to make that a reality. By doing so, the team can break free of limitations around current business models or service offerings to imagine what’s next.
To find out more about sustainability opportunities and business benefits, read our white paper “Green Rush: The Economic Imperative for Sustainability” or contact us at the Center for the Future of Work