As we can all observe, contemporary times are calling for a sustainable future. Ever since the first industrial revolution, we have witnessed how the industrial sector has a massive influence over people’s lifestyles and the environment. Coal and fossil fuels which were an integral part of the first industrial revolution (1700s) were not only able to restore 75 million death caused due to the Black Plague in 1300s but lead to a population explosion resulting in 1 billion in 1800s which doubled again in 1926. Obsessed with growth and development of human kind, we completely neglected its effect on the environment until now. Hence, in order to look forward to a sustainable future the change must be initiated by the industrial sector.
The reason it has to begin with the industrial sector and not with the consumers is because the market is not inclined towards the consumer’s convenience when it comes to sustainable products. According to a research conducted by Getty Images among 10,000 people worldwide, 81% identified themselves as eco-friendly. 84% of the UK consumers claimed environment friendly products are important to them yet 68% of them were unable to name any environmentally friendly brand. The study conducted by Nielsen in 60 countries with 30,000 people as respondents showed that almost two-thirds of the respondents were willing to pay 10%-25% more for sustainable products and services. In this particular study, sustainability is seen in terms of all 3 dimensions – social equality, environmental friendliness and proper working conditions. Hence, in countries where inequality and poor working environment was not adverse respondents opting to pay more for the sustainable products were much lower. A study by Mahindra Group in India known as “Alternativism” stated that 89% of the respondents believed that climate change can be battled more effectively if companies provide with more eco-friendly solutions and 88% of them do not find sustainable products within their budget or effective enough and hence are unable to switch into a more eco-friendly lifestyle. In the words of Anand Mahindra (Chariman of Mahindra Group):
“We think that Climate Change is this century’s biggest business opportunity. Our basic philosophy is that a business must create shared value by doing good and doing well at the same time. We intend to create shared value by committing to the battle against climate change and by embracing the business opportunities that arise from it. It is time for action.”
Industry experts also agree with Mr. Mahindra’a words. According to The European Business Review, Accenture estimates that if circular economy is implemented it can generate a valuation of $4.5 trillion globally, We Mean Business coalition has analysed that on proper implementation of the Paris Agreement the energy sector alone can generate $13.5 trillion of economic activity by 2030 and, Business and Sustainable Development Commission has found that on implementation of UN Sustainable Goals $12 trillion market opportunities will open up by 2030 and the commission stated that the real market value may be 2-3 times more.
The question boils down to – Then why are more start-ups not going green? Some of the reasons are:
- Sustainable Entrepreneurship requires additional laboratory and research equipments other than the usual requirements which lead to high operating costs. This makes it harder for start ups to forward with their eco-friendly ideas.
- The general perception of the community is that climate change is a humongous problem that needs to be dealt by governments and large companies. Small companies or start ups cannot solve the problem rapidly.
- There is a conception that government policies pose as a hindrance while going green. This differs from country to country. In India, industries need to wait for a long period of time and incur heavy costs to obtain certifications related to environmental issues.
- The concept of profits blending with sustainability is still unrealistic to many as the rewards are not gained instantaneously. It is a long term investment.
While the above are a few of the problems faced by start ups, the switch to an all rounder sustainable approach for established businesses can be equally hard as well. Having said that, our only goal can be to move forward given that we have all the essentials required to start more sustainable businesses – a problem that needs to be solved, demand of the commodities that contribute to the solution and a blooming future of the industry.
AllBirds Sweet Foam is a footwear company that has negative carbon footprint. The company makes sandals made of Sweetfoam which is manufactured from sugar cane. It not only has zero emissions as opposed to the big carbon footprint of the shoe manufacturing industry worldwide but it also takes carbon out of the atmosphere. The company caught Leonardo DiCaprio’s attention and was able to secure his investment. The company was featured in Time (2018) as one of the world’s 10 smartest sustainable products. Another company featured in the same edition of Time was Chakr Shield Ink. An Indian start up that manufactures ink from particulate matter captured from diesel engines. Dell has begun buying their products to print text on boxes. Even though sustainable businesses still seem out of the norm, investors and consumers (both B2B and B2C) are on a look out for them.
The pressure of sustainable development is pretty serious when it comes to India. According to the World Business Council for Sustainable Development (WBCSD):
“India is at the centre of this transformation. Already home to one-sixth of the world’s population, it will be the most populous country by 2030 and it is widely understood that India will play a leading role in determining the relative success or failure of the Sustainable Development Goals (SDGs). It is a rapidly growing economy, with a huge domestic market and an important role in global supply chains. Currently a USD$ 2.72 trillion economy, the government has set the target of the country to become a USD$ 5 trillion economy in GDP terms by 2024.”
The climate change is a looming threat to humanity. However, due to lack of awareness and initiatives to educate people on the importance of sustainability most people opt for convenient practices which are detrimental to the planet. The barrier of eco-friendly products being expensive does not allow the majority of the population in developing countries to opt for sustainable alternatives. Green start-ups that can address these problems and reach out to the masses can contribute immensely to help people switch to a greener lifestyle.
Follow Us @
