up from one-fifth in December 2020, 65%of these targets do not yet meet minimum procedural standards of robustness. At the same time, only 38%of companies claim to cover all Scope 3 (value chain) emissions. The report also states that the world is only 8.6% circular (two years ago, it was 9.1%). Yet, the Business & Sustainable Development Commission believes that achieving Climate Action and the Global Goals will create at least US$12 trillion in opportunities. ADOPTING SUSTAINABLE BUSINESS MODELS Relying on current unsustainable business practices carries inherent risk. The planet has finite resources, which endless growth and consumption are rapidly depleting, destroying the ecosystems necessary for species to survive and thrive. Current practices negatively impact oceans and forests, reducing biodiversity and preventing them from acting as carbon sinks. Business sustainability is the most effective way to ensure long-term success (Fedeli, MD 2019). There is a difference between a business that prioritises sustainability and one that is sustainable from the core. But all businesses can embrace the journey, taking advantage of the seven key opportunities: • Value creation • Risk management • Efficiency and reduced costs through reduced waste and resource use • Better product differentiation • Newmarkets • Enhanced brand and reputation • Opportunity for radical innovation using sustainable design thinking THE BUSINESS CASE In the post-Covid working environment, with increased sense of place and the economic climate, there are several compelling reasons why it is the right time for SMEs to explore and take steps towards their sustainable future. Innovation: New business opportunities can be realised through redesigning products and services to meet global challenges, environmental standards or social needs offers. Attracting talent: In particular, Gen Z workers are attracted to organisations with values that reflect their own and take a defined and strong position on social and environmental issues. Improving financial performance: Energy and water efficiency initiatives, recycling and waste reduction all offer opportunities to improve resource allocation, streamline operations and improve profitability. These initiatives also provide business opportunities to supply services. Transformations in value chains: Corporations and larger companies are increasingly under pressure to make their value chains more sustainable. Consequently, it makes sense for SMEs to move simultaneously with them, learning and iterating together. Value Creation: In an increasingly environmentally and socially conscious world, sustainable business practices can enhance brand value and ensure organisations are more resilient to shock. Michel Porter and Mark Kramer pioneered the idea of ’creating shared value’, arguing that businesses can generate economic value by identifying and addressing social problems that intersect with their company. Investment: Lenders and investors are looking for and expecting commitment to sustainable business practices. Sustainable business models vary, but there are a recognised set of patterns. For example, the produce-on-demand supply chain pattern modifies how resources are sourced, or target groups are reached. Companies that only produce a product when there is sufficient demand for it can avoid overstocking, prevent material waste, reduce warehouse costs, and cut unnecessary transportation emissions. To be sustainable means regeneration is the end goal. Should a resource be used, like a tree or water, it must be allowed to regenerate. While some circular business models may be sustainable, it is not an inherent quality. Genuine sustainable business models include regeneration and resilience, as well as scaling without increasing risks or diminishing returns. As a movement and a journey, sustainability is not simply measuring reporting, disclosing or complying with regulations— it is a way of doing business. Sustainability is a mindset embedded from the top and bottom of an organisation: it should be part of the business’s culture and, done correctly, drive critical decisions such as policymaking, investment and procurement, and create environmental and societal benefits for stakeholders. FIFTY FOUR DEGREES | 17 Claire Benson is Founder and Director of SDGChangemakers, data and tech-led sustainability consultants, who support SMEs and social entrepreneurs to improve the social, environmental and economic sustainability of their organisations and the communities they serve. Claire is also a member of the Entrepreneurs in Residence network in Lancaster University Management School, made up of more than 70 entrepreneurs from around the globe. Their activities include delivering Masterclass talks, breathing life into the theories with student classroom teaching, mentoring students, offering student projects within their businesses and taking part in academic research to further extend our understanding of business and entrepreneurship. Claire@sdgchangemakers.today
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