According to the most recent U.N Sustainable Development Goals Report, more than 90% of the 250 largest companies in the world now issue reports on sustainability.
It’s official — sustainability is now mainstream in businesses. After the 2021 United Nations Climate Change Conference (COP 26), governments and organizations around the world mobilized toward the shared goal of carbon neutrality by 2050 and keeping global warming below +1.5 °C.
Despite some setbacks, COP26 sent a clear message to corporations — only those who commit to sustainability will reap its rewards. While this isn’t news to businesses, it did a great job at driving home the point.
According to the most recent U.N Sustainable Development Goals Report, more than 90% of the 250 largest companies in the world now issue reports on sustainability. But it’s not just the major players that are turning green — businesses of all sizes, across different industries, are doubling down on sustainability efforts.
ESG is at the forefront
What is ESG? Standing for Environmental, Social, and Governance, it’s a set of criteria that helps investors determine which companies are socially responsible. In 2005, a report found that non-financial issues greatly impacted the finances of companies and they’ve been paying more attention to ESG since then. Today, ESG stands at the forefront of most businesses’ agendas.
Investors and employees demand companies be socially responsible. Particularly, investors prefer to put their money on companies that invest in ESG as the stock of said companies tends to be more stable. This is because ESG has a long-term effect on a company’s longevity.
One trend directly tied to the prominence of ESG in today’s industries is the rise of chief sustainability officers (CSOs). Previously, CSOs were only focused on environmental issues but since sustainability now means more than just the environment, CSOs have started to gain more power. Since 2011, the number of CSOs in the Fortune 500 companies has increased by over 228%. CSOs became the head of corporate sustainability and they were the ones to ask about how a company approaches ESG issues.
As of 2021, only 60% of companies are implementing corporate sustainability strategies despite 90% of CEOs understanding its importance. However, that discrepancy is likely to shrink as the number and rank of CSOs continue to rise.
Does your company have an ESG strategy?
- Not sure
Greenwashing is still rampant
More and more companies are sincere in their sustainability initiatives, but there are still many that try to reap the benefits of going green without putting in the equivalent effort. Greenwashing is when an organization builds a “green company” image without actually doing anything substantial for sustainability. A report from the Changing Markets Foundation revealed that as much as 60% of fashion brands in the UK and Europe are guilty of greenwashing.
Companies who deliberately greenwash use fluffy words in their marketing materials. They throw around buzz words like there’s no tomorrow but fail to discuss anything specific. They may also use evocative imagery such as blooming flowers and animals to make consumers associate their brand with eco-friendliness.
Although it can be a deliberate attempt at deception, greenwashing can also be done unintentionally. Companies with good intentions may end up overstating their sustainability efforts by mistake. They may also sell “green” products not knowing the manufacturing process of these products and their components is harmful to the environment.
It’s likely that greenwashing will never go away, but it surely can be curbed. Being caught red-handed is obviously harmful to a brand’s reputation, and with greater scrutiny placed on green marketing across industries — greenwashing will be extremely discouraging. Provided, of course, that people remain vigilant.
The leading industries
There are countless industries worldwide and while most of them are pivoting towards a sustainable future, not all are doing it with a similar urgency and intensity as these ones.
Given how important the transportation industry is, it faces tremendous pressure to become more sustainable. Society demands the transportation industry to change for the better, given the magnitude of its impact on the environment. In 2016, the transportation industry was accountable for 24% of all greenhouse gas emissions worldwide. This figure was increasing until the pandemic in 2020, but it’s expected to rise again as the demand for transport recovers.
The primary focus of the transportation industry and all its components - land, air, and sea — is the use of cleaner fuel. This is evident in the increasing popularity of electric vessels. But battery technology isn’t the be-all and end-all of cleaner fuel. The industry is also exploring other, more efficient alternatives such as hydrogen fuel cells.
Just as vital as transportation, the agriculture industry is also a major contributor to greenhouse gasses. Agriculture was responsible for 18% of greenhouse gas emissions worldwide in 2016. A large chunk of the industry’s emissions come from the use of certain fertilizers and pesticides.
To address this, the industry is utilizing various technologies to increase efficiency. Internet of Things sensors assists farmers in tracking plant growth — allowing them to rely on more accurate data regarding the condition of crops and the optimal amount of resources to use.
Vertical farming innovation is also revolutionizing the industry. More and more farms, especially ones near urban areas, are adopting vertical farming. This helps them in reducing resource consumption and minimizing, if not eliminating, the use of pesticides.
Every other industry relies on energy, making it imperative for the industry to go green. The cost of generating solar power has plummeted in recent years, dropping by a whopping 80% since 2010, making it more accessible to everyone. However, the industry still has plenty of room for improvement. As existing green technologies mature and new ones emerge, the energy industry will continue to lead the way in sustainability.
Sustainability looks a bit different for each industry — but they are underlined by the same goal: business growth that is efficient with regards to the environmental, social, economical, and human aspects. There is still a lot you can learn about sustainability across industries but the discussion above should give you a good glimpse.