{"id":2637,"date":"2022-04-04T01:04:12","date_gmt":"2022-04-04T05:04:12","guid":{"rendered":"https:\/\/advertisingweek.com\/aw360\/2022\/04\/04\/sustainability-is-not-a-cost-its-an-opportunity\/"},"modified":"2022-04-04T01:04:12","modified_gmt":"2022-04-04T05:04:12","slug":"sustainability-is-not-a-cost-its-an-opportunity","status":"publish","type":"post","link":"https:\/\/advertisingweek.com\/aw360\/news\/sustainability-is-not-a-cost-its-an-opportunity\/2637\/","title":{"rendered":"Sustainability Is Not a Cost, It\u2019s an Opportunity"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>By Martin Johnston, Founder and Managing Director at Earth Strategies<\/em><\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">The natural world is a masterful blueprint for balance, with everything in alignment. This is as true for the solar system as it is for ecosystems and social systems.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">But human behaviour, business theory and infrastructure development haven\u2019t had the benefit of millennia of evolution to find that balance. And in today\u2019s world, the way we do business is most certainly not in alignment.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Research from Deloitte has <a href=\"https:\/\/www2.deloitte.com\/global\/en\/pages\/risk\/articles\/2021-climate-check-business-views-on-environmental-sustainability.html\" aria-label=\"shown, click to rad on deloitte\">shown<\/a> that more than 80% of executives are concerned about climate change but the pandemic and economic downturn have stalled ambitious actions.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">As ambitions are tempered, the direct threat of climate change becomes more and more palpable. Roughly 1 in 3 executives say their organisations can already feel the operational impact of climate change, while more than a quarter face a scarcity of resources due to unsustainable business practices.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">What emerges is a paradox.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Senior decision-makers recognise that climate change is both a human problem and a business problem \u2014 yet fail to substantially change the way that organisations function and operate.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">This imbalance in the way we do business has a direct impact on our planet\u2019s equilibrium.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s time to reimagine sustainability \u2014 not as a cost but as an opportunity. To make money, save money and most importantly, give your business permission to exist.<\/p>\n\n\n\n\n<h2 class=\"wp-block-heading\">Can We Quantify the Whole Value Chain?<\/h2>\n<p class=\"wp-block-paragraph\">By now, most of us recognise that brands have a big impact on the environment. But at what cost?<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">A new wave of economic thinking has evolved that puts a monetary price on the value of our natural world. The idea of putting a monetary price on nature is simply wrong but measuring the risk to our natural ecosystem is a completely different thing altogether.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">According to the world\u2019s largest reinsurance company, Swiss Re, <a href=\"https:\/\/www.theguardian.com\/environment\/2020\/oct\/12\/fifth-of-nations-at-risk-of-ecosystem-collapse-analysis-finds\" aria-label=\"more than half, click to read on the guardian\">more than half<\/a> of global GDP \u2013 approximately $42tn (\u00a332tn) \u2014 depends on high-functioning biodiversity.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">In other words, the natural world that sustains human life is a trillion-dollar asset class.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">The cooling effects of forests, the flood prevention characteristics of wetlands and the food production abilities of oceans can all be understood as services with a defined financial value.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">This is equally true for animals. Research from The IMF <a href=\"https:\/\/www.imf.org\/external\/pubs\/ft\/fandd\/2020\/12\/how-african-elephants-fight-climate-change-ralph-chami.htm\" aria-label=\"shows, click to read on IMF\">shows<\/a> that the value of an elephant\u2019s contribution to its ecosystem can be quantified at $1.75m per elephant.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">However, the value of a bee is even more significant. Without them, you wouldn\u2019t be sitting here reading this article.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">This raises an even more existential question. If human society wouldn\u2019t exist without bees, then how can we even begin to quantify their value?<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">This question inevitably leads to a profound conclusion: bees are priceless.<\/p>\n\n\n\n\n<h2 class=\"wp-block-heading\">Value Is so Much More Than Money<\/h2>\n<p class=\"wp-block-paragraph\">Harvard Business School has <a href=\"https:\/\/www.hbs.edu\/impact-weighted-accounts\/Pages\/default.aspx\" aria-label=\"attempted, click to read on HBS\">attempted<\/a> to put a dollar value on the impact that business has on the planet.<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">The researchers calculated the median environmental impact as a percentage of an organization\u2019s revenues, referred to as \u201cenvironmental intensity\u201d.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">This figure is close to 2% and above 10% in 11 out of 68 industries, suggesting a significant level of \u201chidden liabilities\u201d and potential for value erosion if environmental impacts are priced.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">This thinking moves the need forward and can make tangible improvements to the way businesses operate but it still doesn\u2019t represent real value.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">This is monetary value but value is so much more than money.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Yes, we need to prove commercial benefits, cost savings and gains but some things just cannot be measured in monetary terms.<\/p>\n\n\n\n\n<h2 class=\"wp-block-heading\">A Balanced System Thrives; A Broken System Doesn&rsquo;t<\/h2>\n<p class=\"wp-block-paragraph\">For decades, businesses have been looking at operations through a singular lens of shareholder value. Naturally, shareholders have been defined as those who have an actual financial interest in an organisation\u2019s success.<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">However, those who have a financial interest in the success of a company make up a very small percentage of the engagement needed for the business to succeed.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">This concept of shareholder value has come at a cost and now the world is out of balance. To rebalance business and society, brands must opt-in to a different system, one that isn\u2019t defined by financial value but rather brand value as a wider concept.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">In this framework, a brand activates value beyond its products and services so that it encompasses the entire business model. This is how a company ensures that business needs are in balance with its surroundings.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Making the shift to this wider interpretation of a brand is not only imperative for the planet but also inextricably linked to a company\u2019s continued existence.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Doing so requires a change in how we view sustainability. It\u2019s not a short-term cost. It\u2019s an opportunity to advance and transform business, to make or save money and to give your business permission to exist.<\/p>\n\n\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Only then can we restore the balance between our planet and our society.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Martin Johnston, Founder and Managing Director at Earth Strategies The natural world is a masterful blueprint for balance, with everything in alignment. This is as true for the solar [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":2638,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","editor_notices":[],"footnotes":""},"categories":[1],"tags":[4],"topics":[2],"class_list":["post-2637","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-culture","topics-editorial"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Sustainability Is Not a Cost, It\u2019s an Opportunity | AW360<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/advertisingweek.com\/aw360\/news\/sustainability-is-not-a-cost-its-an-opportunity\/2637\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sustainability Is Not a Cost, It\u2019s an Opportunity\" \/>\n<meta property=\"og:description\" content=\"By Martin Johnston, Founder and Managing Director at Earth Strategies The natural world is a masterful blueprint for balance, with everything in alignment. 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