Why businesses should rethink their environmental impact

In February 2020, Oren Cass published a study on American life. He looked at how many weeks a working man in America needs to work to earn enough to support a family for a year. The answer is 53 weeks. The study may have concentrated on America, but the result is pretty universal – we all feel the pressures.

My friend tells me how she gets up at 3a.m. in the morning to clear out her emails so that she can start work ready at 7a.m. When I mention this to other friends, they all have stories about needing to work and check their emails during their holidays. These are vivid examples of how we run out of resources even for ourselves.

Everyone has by now heard about sustainability and the environment. Sustainability is fundamentally about whether we can continue our way of life so that it is fulfilling, so that it is purposeful and meaningful. When this fails to be the case, it inevitably harms the environment.

What does this mean for a business owner or an entrepreneur?

My mum is 86-years-old and partially sighted as a result of glaucoma. She sings as part of a group called the VIP Singers of Visually Impaired People who enjoy a sing-along on Saturday mornings. It is a happy crowd, and I join them when I can. A few weeks ago, when our book, The Unstainable Truth, was published, we talked about the idea of slowing down. One of them who is a small business owner with her husband said they are always being pestered about growing bigger. They are successful in what they do and are often invited to speak at entrepreneur seminars and business leader meetings, but they always make one thing clear – they are not going to focus on expansion.

Decades of increasing competition to produce more profits have led to people thinking constantly in terms of getting bigger and doing things faster. This has led to too much carbon dioxide accumulating in our atmosphere and is pushing up temperatures around the world. This year, floods dominated the news in the UK and Europe; in China over 1.7 million people were displaced, and Texas had a power blackout for two weeks due to snow. The impact is clearly real and significant.

Why does this matter? This year is yet another record-breaking year for insurance losses. Every year in the past ten years has also been a record-breaking year. Climate changes are disrupting our economies even in rich countries. When a large part of Europe is flooded, businesses are all disrupted. With all these damages increasing and annually repeating, everything becomes more costly as we become increasingly uninsurable.

A study published this year estimated that we have a capacity of 440 giga-tonnes of CO₂ left to prevent warming from exceeding 1.5°C. This year the projection is 58 giga-tonnes of carbon emission – leaving us with 380 giga-tonnes left, enough for about six more years. To keep the worst from happening the consensus is that global temperature must not rise beyond 1.5°C.

The problem is whatever we do triggers carbon emissions. We may use renewable energy ourselves, but as long as fossil fuel is used to make up what renewables are unable to provide, this pushes someone, somewhere else to burn fossil fuel instead. In fact, the world economy pushing to recover the money it lost in 2020 forced China, where most of our goods are produced, to run out of coal and look for new methods of energy production. When we find ourselves restricted, our economic instinct to keep profits growing just makes things worse. When ASDA charters a container ship to keep our shelves full for Christmas, it is simply causing more emissions to be created and moving our global temperatures up a notch higher. Next years’ floods will become worse.

So, what should the small and medium business owner do? My friend in the singing group has it right. Economics may indicate to us when we are too small to survive quiet times in our business, but economics will always push us to be bigger, even when we are already big enough. It is our guts which tells us just how much we can take on before we lose the meaning and purpose our business gives us.

When we strive to become too large, we lose that sense of personal involvement, and the purpose that the business has built begins to change. We turn into rent collectors. It may be that we can grow our business into another Amazon, but if that was not initially our aim, then we should not do so.

Slowing down and doing less is also the best way to listen to our gut, and also to recapture that missing 53rd week.

Small and medium enterprises are the major employers in the UK and in many countries. They represent the heart of our community. When their owners are willing to slow down, all those who are part of our enterprises and in our community have a better chance to breathe. It is the best way to lighten our impact on the environment and help us to prevent the worst of the potential climate impacts.

Beyond this, we also have to recognise that we actually need to reduce our fossil fuel production.

David Ko and Richard Busellato are seasoned investment managers and authors of  The Unsustainable Truth. Together, they are co-founders of Rethinking Choices, a sustainability advocate which helps businesses and communities devise strategies which acknowledge a world with limited resources.

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