Over the Overdraft
You go to the cash machine and decide to look at your balance. Oh dear. Overdrawn again. You make a mental note. Must stop spending. More than that, must try to pay back the debt and save up so you don’t end up overdrawn again.
Research by Rockstrom et al indicates that, as a planet, we’re already in our environmental overdraft. Biodiversity is being depleted at such a rate that the earth can’t replenish it. The amount of carbon emissions are more than the atmosphere can sustain without the climate changing. If we want to continue to survive and thrive on this planet we need to start to repay our environmental debts. Furthermore, we need to invest in the environment so we can begin to rebuild natural capital.
To do this, it isn’t enough for business to aim to reduce their environmental impacts to zero. They need to strive to do more. They need to have an actively positive effect on the environment.
The problem is compounded by the fact that many businesses will not have the drive or resources to reduce their impacts. In the UK, 99.9% of the private sector is made up of small businesses. They may not be able to make the upfront investment needed to reduce their impacts, let alone have the ambition to make an actively positive impact on their environment.
Businesses that have a sustainability strategy tend to have positive targets for their community activities. No business would be satisfied with creating no harm or having zero impact on their community. They aim to have a positive impact. They want to leave their community better then when they found it. But very few businesses aim to have a positive effect on the environment- to leave it better then they found it.
Leading businesses such as Kingfisher and Interface have decided that it’s not enough for them to commit to reducing the environmental impacts of their business to zero. They want to go beyond this and begin to pay back their environmental debt. But what does this really mean? You can’t put oil back in the ground.
Different companies have approached this in various ways. For the likes of Interface, it means going beyond the boundaries of their business and using their influence on their customers and the supply chain to help them to reduce their impacts. For Kingfisher and O2 it means selling products that help their customers to use less energy and live better lives.
These strategies will deliver clear benefits for the planet in terms of a reduction in carbon emissions but what will it mean for the company itself?
The mandate for radical innovation- Business-as-usual won’t enable them to achieve the audacious goal of making a positive environmental impact. Incremental innovation is necessary but won’t be sufficient and a more radical approach will be needed. If they manage to create successful innovations they will reap the benefits of access to new markets as well as attaining a leadership position.
New relationships with customers- Companies can’t achieve their goals by working alone. They will have to work more closely with their customers to gain a greater understanding of them - not just their purchasing behaviour but their lifestyles in general. In some cases, they will need to work alongside customers to create solutions which will reduce their environmental impact.
Leadership- Taking a public, leadership position will benefit companies both internally and externally. A goal which demands radical change will help to create a culture of experimentation and innovation internally. Externally, it creates a buzz and helps position the company as brave, business leaders with an eye on the future.
Paying off our environmental overdraft won’t be easy, but it is necessary. Business needs to have a positive impact on our environment to build up our environmental capital. It’s the only way to stay in business, as organisations, as individuals and as a planet.
If you are a Forum member or partner, you can find out more about how Kingfisher are hoping to achieve a “Net Positive Impact” at our webinar on 28th January. Nick Folland, Group Corporate Affairs Director at Kingfisher will be explaining what being a “Net Positive” business means for Kingfisher and the challenges they face in taking this new approach. To register for the webinar, please contact Kester Byass.
 SMEs accounted for 99.9 per cent of all private sector businesses in the UK http://www.fsb.org.uk/stats