What Is Business Sustainability and Why Is It So Important?
There was a time when sustainability efforts in business were seen as going above and beyond. But that’s no longer the case. Today, such endeavors are imperative for the well-being of people and our planet. Customers, investors, and job seekers alike are taking notice, too.
A survey by Schneider Electric—a global specialist in energy management and automation solutions for efficiency and sustainability—found about 89% of respondents have taken steps to transform their business to respond to the climate crisis, but only 7% of those have completely overhauled their business in order to be climate-friendly.
“We cannot keep doing business as usual and hope to make the impact that we need on climate change, and so we need to reconsider how business can and should look different.”
Amy Haddon
Vice President of Global Sustainability Communications, Schneider Electric
Schneider Electric’s Vice President of Global Sustainability Communications, Amy Haddon, is a renewable energy expert certified in both climate change and sustainability. She joined us for a Haworth Connect webinar to help answer the questions of, “What is business sustainability?” and, “Why is it so important?” Amy explained some of the latest climate-related business trends and discussed what companies are doing to achieve their sustainability goals.
A Make-or-Break Decade
Awareness of humans’ role in climate change began more than a century ago. The United Nations (UN) made it a priority 30 years ago as the impacts of climate change began to take hold. In the fall, the 2021 UN Climate Change Conference, known as COP26, released its most recent report, calling this the make-or-break decade for limiting temperature rise to 1.5°C.
Rising temperatures are having a significant impact on oceans, which are absorbing excess heat, causing them to expand and raise sea levels. The higher water surface temperature creates greater evaporation, which becomes precipitation, resulting in more extreme forms of weather, such as hurricanes. Climate change is also creating droughts, which are increasing water scarcity and expected to spur the next environmental crisis.
“The result is that climate change, unchecked, could result in massive ecosystem collapse and extinction. And so, we've got to take this seriously and move quickly, as businesses to help to mitigate those threats. Climate change is truly the defining issue of our time, and that's why we see this increasing interest and urgency around sustainability and climate action.”
A Key Part of the Solution
“Business is a key part of the solution to climate change,” Amy said. About a quarter of Fortune 500 companies have made commitments to help reduce climate change by 2030. Many companies have also signed on to the UN Global Compact to support the sustainable development goals and an overall sustainable future for our entire planet.
The Securities and Exchange Commission has announced plans to adopt a rule that would require publicly held companies to track and disclose their climate risks, both physical and transitional, as well as their emissions in total.
“The proposed rule will go through some amendments before it's actually published later this year. But it really serves as a notice to companies that, if you're not already tracking and disclosing emissions and climate risks, the time is coming for you to do so,” Amy said. “Even if you're a private company, it's likely that your upstream suppliers or downstream customers might be publicly held companies and will be responsible for tracking and disclosing emissions that your company is generating.”
There are other pressures on companies to move forward on climate action. For example, job seekers are really starting to demand sustainability, especially those in younger generations. During the current talent war, employers with sustainability built into their businesses will have a competitive advantage in attracting and retaining talent.
“For the vast majority of companies, their sustainability actions to date have been ones they have undertaken voluntarily. They see them not only as the right things to do, but in most cases, these actions also pay,” Amy said. “Having a more efficient operation means that you save money, as well. And so, they're responding to those pressures, but they're not doing so merely out of the goodness of anyone's heart. It makes the business more resilient, and it improves the bottom line.”