Updated: Aug 7
The Urgent Need to Address Climate Change and Its Consequences
We have long overlooked the planet and its valuable resources. Since the beginning of the Industrial Revolution, the level of carbon dioxide in the atmosphere has surged from 280 parts per million to a staggering 412, as reported by NASA. This significant increase has profoundly impacted the average global temperature, causing it to rise by 1°C. Consequently, we are witnessing the alarming consequences of this change, such as the rising sea levels resulting from the melting of billions of tonnes of polar ice.
The situation will deteriorate if we do not take immediate and drastic measures in the coming decades. We must address not only the environmental aspects but also the social and governance factors associated with climate change. By implementing comprehensive strategies encompassing all these dimensions, we can work towards a sustainable future for our planet and ensure the well-being of current and future generations.
However, the current emphasis is on individual actions to mitigate climate change. While it is indeed essential for everyone to reduce their carbon footprints, we must not lose sight of the true culprits - corporations and governments. They possess the authority and influence to make significant changes for the betterment of our planet, and now more than ever, they are under scrutiny. They must lead by example and promote sustainable growth.
A Global Movement for Change: Greta Thunberg and the Power of New Generations
“The real danger is when politicians and CEOs are making it look like real action is happening, when in fact almost nothing is being done, apart from clever accounting and creative PR.”- Greta Thunberg
In August 2018, Swedish teenager Greta Thunberg started skipping school to camp outside parliament holding a sign saying 'School Strike for Climate.' Over the next year and a half, she became a global phenomenon leading a four-million-strong movement. She's also addressed various heads of state, met the Pope, and sparred with US President Donald Trump. In December 2019, the Time magazine named her Person of the Year.
Yet regardless of how you might feel about the movement, it has become too large to ignore. A new generation is entering the job market. Along with the changing priorities of consumers, this has had a substantial impact on business culture. New motivations and personal values are entering the corporate environment, and companies are coming under greater scrutiny for their sustainability practices.
It's time to start investing not only in your business, but also in the planet and its people.
Corporate Social Responsibility and the Triple Bottom Line: Profit, People, and Planet
Traditionally, businesses have primarily focused on profitability, often neglecting long-term sustainability. However, with the rise of ethical investing and a growing emphasis on environmental and social issues, the well-being of people and the planet now plays a crucial role in business relationships. As a result, businesses face increasing pressure to choose their partnerships wisely and avoid working with suppliers who do not meet the standards of corporate social responsibility (CSR). Employees are also becoming more mindful of the companies they work for, seeking to be part of the solution rather than contributing to the problem. Similarly, customers are now more conscious of the businesses they support, with over two-thirds of global consumers willing to pay more for sustainable goods and services.
CSR policies prioritising people's and the planet's well-being are no longer mere luxuries; they have become essential drivers of business value. Moreover, with the environmentalism movement gaining momentum, these policies will only grow in importance. Fortunately, technological advancements have made it easier for businesses, especially those with extensive supply chains, to invest in sustainability. This is particularly beneficial as traditional supplier management processes can be challenging to govern in such cases.
Procurement: The Key to Sustainable Business Relationships
Choosing and maintaining the right third-party relationships is crucial in today's competitive and globalised market. However, the majority of the carbon footprint involved in building and delivering a product or service comes from the supply chain itself. A supplier can be the weakest link even if internal sustainability practices are up to par. Just as people judge each other based on the company they keep, customers also judge businesses by those they work with.
Supply chains are constantly growing, making it difficult for larger businesses to maintain visibility into them. When something goes wrong along the supply chain, the company selling the product or service is usually the first to be blamed. Recent examples include the Europe-wide horse meat scandal, where supermarkets unknowingly sold beef products containing undeclared horse meat, and cases in the fashion sector where high-end brands sold garments manufactured by child labour in developing countries. In electronics, batteries often have rare-earth materials sourced from countries with poor environmental sustainability and working conditions. The list goes on.
With so much at stake, conducting background checks on suppliers can be time-consuming, especially when dealing with hundreds of suppliers. However, it is essential to make informed decisions and prioritise green initiatives. Corporate social responsibility (CSR) is meaningless if it does not extend to procurement practices. Therefore, companies that want to remain sustainable and create long-term value must find solutions to streamline vendor management and mitigate the associated risks.
Profitability and Environmental Responsibility: A Profitable Path Forward"
Business leaders are primarily concerned with profit. However, what's good for the environment is also beneficial for profitability. This correlation will become more evident over time. Instead of solely focusing on the traditional bottom line, organisations must fulfil their responsibility and invest in people and the planet. By doing so, companies can enhance their profits as a sustainable business attracts customers and retains employees.
Moreover, corporations have an ethical and legal obligation to contribute to environmental protection. With new regulations emerging to address global temperature and carbon dioxide levels, there is increasing pressure on larger businesses to lead by example. Organisations should embrace this pressure as an opportunity to innovate and establish sustainable supplier relationships. In doing so, they can incentivise other companies to adopt greener practices and become desirable suppliers.
Ultimately, prioritising environmental sustainability showcases innovation, adaptability, sustainability, and responsibility. These attributes are crucial to employees, customers, stakeholders, and suppliers. By incorporating these values into the procurement process, businesses can create long-term value in an era where the future of our planet is uncertain.