In a few words, green business is improving, but not nearly fast or widespread enough.
The State of Green Business 2022, by Joel Makower and the editors and analysts at GreenBiz Group, is out and the prognosis remains highly uncertain.
As Makower says, “We find ourselves in uncharted and unfamiliar territory. Again. The worlds we collectively inhabit — corporate sustainability, sustainable finance, the circular economy, climate tech — are all reaching inflection points, growing and changing faster than many could have imagined. Along the way, they’re roiling industries, companies, jobs, and career paths — mostly for the better but also in a be-careful-what-you-wish-for kind of way.”
It sounds a bit like gobbledygook, but there it is. Simply put, there are too many balls in the air. As Makower notes, the Covid pandemic era now coincides with the rise of most aspects of sustainable business: companies’ commitments to achieving net-zero greenhouse gas emissions; the increase of green bonds and sustainability-linked loans; the inexorable growth of renewable energy, alongside its declining price; the mainstreaming of electric vehicles; the rise of concern about biodiversity loss and its economic impact, and more.
Perhaps the past two years of pandemic life have focused organizational attention on how to deal with multiple crises and issues in business health and the environment. “Despite our self-imposed isolation, the klieg lights focused on companies’ environmental and social commitments and performance have grown increasingly brighter and hotter, in lockstep with the rise of concern about the scale, scope and pace of change. With the signs of a changing climate becoming ever more apparent — and costly — the business world is finally recognizing that sustainability is not merely a nice-to-do activity,” Makower says.
But the bottom line is that while the pace of change has increased, it’s far from what’s needed to address the challenges ahead.
Here are some points to consider from the report:
– This is an exciting and perilous time for companies, their stakeholders, and the world in general. The impacts of a changing climate are clear as storms, droughts, wildfires, heatwaves and other weather phenomena become more frequent and extreme.
– It’s not just the climate crisis. The increasing loss of biodiversity, and all of the economic activity it enables, is a major growing concern.
– In addition, the increasing economic inequality in the world seems an insoluble problem. Unconscionable numbers of people still lack adequate food, shelter, water, electricity and sanitation, while those with financial means are, as a rule, doing better and better.
– The rise of “net-zero” commitments by companies and countries was one of the major themes of 2021, along with the pushback from activists, regulators and investors that many of these claims weren’t backed by credible action or plans. “It’s not necessarily that companies aren’t serious about reaching these goals, say critics. It’s that they’re not serious about the speed at which they need to reach them.”
– The finance component of sustainable business is proving to be powerful.The world’s largest financial institutions are committing trillions of dollars to fund the transition to a net-zero world, though many of them also continue to back fossil fuel companies and projects. Still, the trajectory away from coal, oil and natural gas is clear — though, once again, the pace of change may be way too slow.
“All of this together — the perils and the promise — suggest that business — and, indeed, humankind — is undergoing an epochal transition. Those who view tomorrow’s world as a continuation of today’s are increasingly having those assumptions challenged. As we face these existential threats, there is an opportunity to renew and regenerate the structures upon which we rely for our health, wealth and security. Nearly everything, it seems, must be reinvented if we are to prosper into the future, indefinitely and for all.”
Can business get it done? It has too.