A Really Green Deal: Why Company Leadership is Needed Now
The COVID19 pandemic has rocked, destabilized, and sent the proverbial boat tumbling. Businesses, governments, and nations across the world are reeling under its pervasive impact.
No amount of Facebook ads, political clout, or lip service can change the statistics that are coming out of countries every single day. The pandemic initially forced countries and businesses to take "unprecedented" measures, albeit reactively. They have been asking their employees to work from home, which deemed impossible in the past. Both public and private organizations have set up a robust digital infrastructure in place in record time. And in many countries, they are increasing investment in medical infrastructure, which previously didn't receive any level of urgency.
In the context of the global pandemic, all these measures are nothing but logical, if not outright necessary. We have to ask ourselves: Why does it always take a crisis, in this case, a global pandemic, to change the status quo?
Making the Turn
As the COVID19 pandemic gives way to a new normal, it compels businesses to start thinking about how they can become more proactive and lead the way into the new future; to become more resilient against future crises. In the post-COVID 19 era, the socially and environmentally responsible behavior and actions of the private sector will allow demonstrating leadership, the opportunity to acquire a competitive edge, and open up new markets for businesses. There is much work needed in the realm of sustainability; why can't your business show the way?
Green Deal initiatives, as discussed in many countries, are an essential and proactive step towards sustainability. They aren't merely sets of regulations or incentives but also look towards the private sector to contribute. Here is how a Green Deal introduces new opportunities for businesses to explore and present them to act proactively. Let's unpack it.
What Does the Green Deal Mean Around the World?
The European Commission first presented the European Green Deal plan in December 2019. The idea behind the Green Deal is to make the EU climate neutral by 2050 while turning the climate and environmental changes in Europe into opportunities.
As the Executive Vice President of the European Commission puts it, "We are in a climate and environmental emergency. The European Green Deal is an opportunity to improve the health and well-being of our people by transforming our economic model. Our plan sets out how to cut emissions, restore the health of our natural environment, protect our wildlife, create new economic opportunities, and improve the quality of life of our citizens." EU member states felt the pandemic's hardship as other countries, yet the European Green Deal is not off the table. If anything, COVID-19 opened up the opportunity to address "short-term economic needs with long-term sustainability goals."
Build Back UK is another Coronavirus-specific concerted effort by the UK Government to introduce sustainable and long-lasting changes in the economy. The exhaustive plan covers securing the health of the citizens, investing in public services, restructuring public & private finance, strengthening the social thread, and embracing the Green Deal's tenets.
In the United States, parts of the Democratic Party also have a proposed package called the Green New Deal; Rep. Alexandria Ocasio-Cortez launched and sponsored it in early 2019. It is a comprehensive plan that encompasses the transition of the energy systems into more "green" sources, the building of new eco-friendly infrastructure, the creation of high-wage jobs in the "green" economy, and several other initiatives.
South Korea, another major economy, also pledged in April 2020 to reduce its emissions to net-zero by 2050. While the country already has a Low Carbon and Green Growth policy in place since 2008, its impact has not been significant. In the wake of the coronavirus, job creation and short-term economic relief have now become the priority. Additionally, long-term commitments are currently in question. It remains to be seen if the South Korean government can pull it off this time or instead stick with business as usual and benefit large conglomerates with LNG preference over renewable energy sources to replace fossil-fueled energy.
The Opportunities for Business
Regardless of government initiatives in the country where your company is operating, if 4 out of 5 of your customers demand a change, it is only wise to implement it. According to a recent global survey by Nielsen, "81% of global respondents feel strongly that companies should help improve the environment." The overwhelming response transcends the lines between genders and generations. It should be the most significant reason for companies to take sustainability seriously unless they intend to lose their customers' trust, and ultimately, their buying power.
UPS, for instance, has been building a smart logistics network for years. It has invested in better routing software to drive the greenest mile and switched from diesel trucks to electric vehicles. The reduced emissions keep the customers happy and loyal. Meanwhile, the company also saves in the bracket of $400 million by implementing sustainable solutions.
Gain the Edge Before It's a Norm
Green Deal initiatives may turn into a law that your company must follow in specific countries. They will drive the post-pandemic recovery response, too. Even in countries where such policy measures aren't yet in place, sustainability measures will become a competitive advantage for companies. Position yourself as a proactive organization capable of being an industry leader.
Unite, Rally, Responsible
If sustainability wasn't already a core strategic driver, the COVID19 crisis has brought social and environmental impact into the boardroom. ESG-themed investing is up and rising; committed businesses outperform their peers in share value as well as with people. The pandemic has bent our idea of business-as-usual. And it has shown that companies with a committed purpose to be part of the solution and not the problem, have united and rallied their employees, customers, and communities. That is what the Green New deal is all about: responsible leadership.
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