Businesses must drive the transition in order to survive

Olivier Cohen de Timary

Founder and Director of Socialter magazine

The constant stream of scientific reports and warnings about the climate emergency, resource depletion, dwindling biodiversity and growing inequality remind us time and again that our economies will inevitably change direction. We’re moving into a new era that will be defined by adaptation and uncertainty. Businesses have a key role to play in this new landscape. The ones that will survive are the ones that fully embrace the ecological transition. First of all by understanding the full scope of the emergency and the vital part they can play to bring about a major shift.

Businesses have the resources, assets, infrastructure and platform to innovate and act on a large scale. Then they need a strategy, products and services designed to increase efficiency and minimise consumption at every stage – ultimately to do more with less.

This involves reinventing their value chains and models, and seeing constraints as opportunities. There are several ways business can shift the focus away from extracting resources and towards saving them in all activities.

These include the circular economy or the functional economy (switching from selling tyres to selling kilometres travelled, for instance) and low-tech approaches to innovation (simple technical solutions, which are sized for purpose, easy to repair and based on artisanal rather than industrial methods).

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These shifts offer businesses new opportunities to rise above the less virtuous competition by blazing new trails, meeting emerging expectations, earning greater trust and being more transparent with customers. Companies like Veja shoes or Patagonia clothing have shown that basing their business on shrinking their environmental footprint and increasing their positive impact on society doesn’t stop them from being profitable. It actually does the opposite.

Of course, we can’t expect businesses to bring about this momentous change by themselves. Indeed, leaving the market to self-regulate has failed to address the “long-term emergency”. So policymakers, backed by civil society, need to set this new direction in motion. That means encouraging more virtuous behaviour but, more importantly, helping businesses and markets to create value in, and transfer value to, the “right” places. Just imagine what would happen if companies could book every tonne of resources they save as assets on their balance sheet. The ones that minimise their use of resources most would create colossal value.