Science tells us it is ‘extremely likely’ that more than half of the observed temperature increases from the 1950’s until now are the result of anthropogenic activity, and that this is mostly the result of rising greenhouse gas concentrations in the atmosphere caused by burning fossil fuels and engaging in industrial activities that emit ‘greenhouse’ gases. Measured over the last 200 years, atmospheric greenhouse gases have increased by a factor of 800. 

The debate is not about whether humans are causing climate change, but rather about what the long-term effects on the planet and society will be. Greenhouse gases act as a blanket around the earth, preventing radiated heat from the sun escaping back into space. Yearly average temperatures, viewed over time, have been rising. As a result, up to 75% of the land-based environment and 66% of the oceans have been ‘severely altered.’

‘Global warming’ refers to the long-term trend of observed rising global temperature increases. However, this trend is also accompanied by greater fluctuations in temperature, meaning that at a regional level certain places may experience uncharacteristic ‘cold snaps,’ Temperature instability is also associated with greater weather instability, leading to greater incidences of severe weather events, such as hurricanes, floods, and fires. For this reason, ‘climate change’ is considered a more accurate descriptor than ‘global warming.’

‘Sustainable development’ is defined by the United Nations as ‘development that meets the needs of the present generation, without compromising the ability of future generations to meet their needs.’ It comprises three considerations – economic growth, environmental preservation, and equitable treatment of people. Pursuit of any of these goals must be undertaken without compromising the others. The ‘green economy,’ then, is the pursuit of economic activities in ways that reduce pollution and waste, and reduce greenhouse gases, while being ‘socially inclusive.’

Doomsday scenarios have a long history. In 1798, Thomas Malthus predicted that liner expansion in agricultural output was driving an exponential explosion in population that would ultimately lead to mass starvation and civilizational collapse. ‘Climate alarmists’ may be said to be only the latest doomsday prophets in a lineage that goes back to warnings of Armageddon and the ‘end of the world’ that are thousands of years old. In 2019, Democratic U.S. House of Representatives member, Alexandria Ocasio-Cortez stated, “The world is gonna end in 12 years if we don’t address climate change.”

However, climate change is far from the only concern that the world faces. While ‘extreme weather’ is identified as the most threatening source of global businesses risk, ‘infectious diseases’ has been identified as having the greatest impact on the world’s economy. COVID, for example, has crippled numerous industries. Fully aware of the many challenges the world faces in building a better future for us all, the United Nations has tabled 17 ‘Sustainable Development Goals’ (SDGs). These encompass not only Climate Action (SDG 13), but aim to redress issues related to hunger (SDG1), poverty (SDG2), health (SDG 3), education, (SDG4), to name the first few. All of these make up the ‘sustainability agenda’ that the world’s business communities have a moral imperative and marketing incentive to embrace.

The short answer is improved profitability. Most companies see sustainability compliance as a cost, which may be true in the short term, but the longer-term benefits are irrefutable. Firstly, the marketplace is shifting to a preference for sustainably produced products – products which embrace recycling, low carbon and ethical sourcing. This is not a mere fad that may be pandered to by niche providers. Rather, it is the future and businesses which do not enter this space in the high market-growth phase can expect to be locked out of any significant future market share.

Secondly, as the world adjusts to the ‘new normal’ of climate change, all businesses will be faced with ‘physical risks’ to business continuity caused by, say, disruptions to shipping and supply chains. There are also ‘transition risks’ associated with regulatory demands for ‘green compliance,’ shifting energy sources, carbon taxes, litigation, investment in new ‘green technologies,’ forced capital depreciation of ‘stranded assets,’ shifting consumer sentiment, as well as industry stigmatization, among other factors. Physical and transition risks, together, are the heavy costs companies will inevitably face should they neglect to transition to a sustainable business model, while pursuit of new market opportunities for sustainable products and services present firms with excellent growth potential.

The Australian Greens Party policy platform is founded on four key principles, one of which is ‘social justice,’ and another of which is ‘ecological sustainability.’ This emphasis is perhaps no surprise coming from a political party with ‘Green’ in its name. The left-of-centre Australian Labor Party is currently promising to “work with business to invest in manufacturing and renewables to create more Australian jobs.” Not to be outdone, the right-of-centre Australian Liberal Party assert: “We are on track to reach net zero emissions by 2050 and we have a clear plan to achieve it, focused on technologies and not taxes.”

What the Australian political debate displays is not so much a disagreement on the necessity of embracing sustainability, but on how to do so effectively. At issue is striking the right balance between the sometime conflicting goals of growing the economy, protecting the environment, and delivering social equity, and on how best to achieve that balance. The one matter that has been settled is that Australia, regardless of who is in government, is committed to the ‘Paris Agreement’ and its promise to reach net zero emissions by 2050. Given that certainty, Federal, State and Local Governments alike continue to move confidently in demanding ever-increasing alignment from industry and the community in meeting sustainability targets.

Every sector of the economy is being affected by climate change, and none will escape from the need to become sustainable. Of course, the nature and degree of the impacts will vary. The sector most directly impacted is Electric Utilities. Fossil fuel-based energy generation is being compelled to transition to renewable sources – solar, wind, hydropower, and bioenergy. Others majorly affected include: Oil & Gas Exploration and Production, Iron & Steel Producers, Construction Materials, Mining, Airlines, and Chemicals. While businesses other than these may take comfort in not being directly affected, the fact remains that few businesses operate without a dependence somewhere along their operational value-chain on those industries that are affected.  

Take the humble café and Australia’s coffee culture as an example. Melbourne is said to be the ‘coffee capital’ of the world. 75% of Australians drink at least one cup a day, and on average spend $1,000 annually on coffee; contributing $7.7 billion to the Australian economy. Despite this seemingly solid market, coffee consumption is under threat. The top five sources of coffee beans are Brazil, Vietnam, Colombia, Indonesia, and Honduras. These need to be transported from afar, and transportation costs are set to rise along with energy costs. About one-third of the earth is forested, but forests are being razed at the rate 35 football fields of area, every minute. Mostly, this is to make way for farmland, much of which is to expand coffee production. And while ethical coffee houses tout the ‘fair trade’ label, signifying the coffee farmers are receiving a fair wage in exchange for their produce, major climate events and political unrest have driven a large number of coffee farmers out of business. In 2019, the average cost of a cup of coffee was $4; over the coming year it is forecast to rise to $7. Coffee houses that do not adapt can expect hardship ahead.

As businesses become more sustainable, how are we to acknowledge that achievement? Government regulators want to know that companies are doing their bit, and so too the consumer market. This is where ‘accreditation’ comes in. For good or bad this is handled by a range of third-party providers who offer accreditation services for a fee. Businesses engage a provider who comes in to assess the firm and/or its products or services, and provides a ‘sustainability rating.’ Think of food claims such as “95% fat free,” or a dishwasher energy rating: “✯✯✯✯”. While such labels are easily recognized by the broader community, interpretations vary, but the point remains that accreditations lend weight to company aspirations of responsible global citizenship.

The construction industry, for example, is populated by a wide range of regulatory frameworks. Internationally, there may be as many as 600 of them, of which BREEAM, developed in the U,K. by the Building Research Establishment, and LEED, developed by the Green Building Council in the U.S., are best known. In Australia, Green Star is widely acknowledged as the leading building accreditor, along with NABERS. NatHERS, however, is a legislated system, as is BASIX, in NSW. These along with a raft of other frameworks permeated the building industry. Each serves to cover a cross-section of building sectors – residential, non-residential, new buildings, building operations, precincts, and infrastructure. Similarly, they also focus on various aspects of building performance – energy, carbon, health & wellbeing, materials, waste, water, transport, biodiversity, and social sustainability. Navigating the accreditation regime is onerous but ultimately necessary.

Large corporate concerns have a vested interest in developing and maintaining a brand image infused with social responsibility. There is a scramble to be seen to out-do competitors in terms of ethical performance. Increasingly, consumers want ‘principled products.’ Joining the well-known four ‘Ps’ of marketing – product, price, place, promotion – is a new fifth ‘P’ – people. The plight of the Uighur minority in Western China, for example, has entered public consciousness, and as a result there is pressure to boycott products manufactured under coercive labour conditions. This includes Chinese raw cotton and tomato ketchup. Large companies can afford the intelligence gathering and public relations consultants needed to both manage the complexities of global supply-chain sourcing, as well as media spin when reputations come under threat.  

Smaller firms have no such recourse; they cannot afford tenured consultants. This is where we can help. With experience in identifying and advising on the most-impactful key change factors that will shift a small to medium-sized company’s business model to one that is more profitable, more sustainable, in a manageable time period, and at reasonable cost, we can audit exactly what is needed and advise on how to go about it. This can be done relatively quickly with minimal disruption. While smaller sustainability consultancies usually specialize in offering one specific service or other, we can offer you a comprehensive complete-package assessment and transition plan. Few firms do what we can do.

We are a consultancy. Just like any professional advisor – doctor, lawyer, accountant – we work in our clients’ best interests to do what they cannot do on their own. Our purview is sustainability. In short, we help businesses identify what it is they need to do to become more sustainable, and importantly, do so in a way that positively impacts the bottom line. We help firms’ future-proof their operations against the impacts of climate change, and market and regulatory demands to act in accordance with social development goals. 

Our services are offered at three levels of engagement. Firstly, we provide ‘off the shelf’ audits that assess your businesses compliance and ‘at risk’ status in respect of the industry in which it operates. Secondly, we can work with you to diagnose specific sustainability related issues that hamper business performance, and from there recommend practical solutions. Thirdly, once you are satisfied that your business has to make certain operational transitions, we can work with you to facilitate those needed changes.