The Link Between Business Growth and Emissions: A Tale of Two Companies
Figures from DECC show that businesses were responsible for 15% of total UK greenhouse house gas emissions in 2011, with similar projections for 2012. This figure rapidly climbs when emissions related to power usage and upstream/downstream business activities are included.
The all-connected world that we currently inhabit creates a vast and varied playing field for businesses to expand, more than often increasing the usage of fossil fuels to forge new market paths. But there is still huge potential to stem this new leak of GHG emissions. The GHG protocol, the most widely used international accounting tool for measuring and quantifying GHG emissions, covers more than 15 activities within a business where emissions can occur – highlighting the potential for companies to exert their financial and intellectual muscle in squashing emissions growth.
Companies hold a responsibility to disclose and act upon their emissions amid growing pressures from society and environmentally aware consumers, compelling them to find some common ground between expansion and environmental awareness. So can companies successfully weave environmental action into their business plans, and is it enough to outstrip new emissions emerging from business growth? Below are two contrasting examples, one from UK retailer Marks and Spencer, and the other from the multinational fast food chain, McDonalds.
Marks and Spencer
Marks and Spencer are taking great strides towards responsible business. Launched in 2007, ‘Plan A’ was designed to address lower resources, social inequality and healthier lifestyles and so far 138 sustainability commitments have been achieved.
As of January 2012 all stores, offices, warehouses and delivery fleet in the UK became carbon neutral by the procurement of renewable energy to offset emissions. Also, zero waste is now being sent to landfill and, predictably, carbon emissions have been steadily falling since 2005, flying in the face of 5 years business growth.
The main precursor to this change was the vision of the management hierarchy to recognise the risk, and subtle potential, that Climate Change posed on the business. A proactive approach, fuelled by understanding, direction and awareness, lead to sustainable business models and a sustainable advisory board to aid the transition throughout the decade. Leading from the top has clearly paid dividends as, from the £40 million initially invested, £185 million has been produced through ‘Plan A’ with the majority being re-invested in the company.
For a brand with more than 1,200 UK restaurants and employing over 85,000 people globally, the scope for sustainable change is immense but, in reality, the lack of disclosure and action is startling. The corporate sustainability report yields not even a single piece of data on their emissions, let alone any mention of Climate Change.
Once you have waded through the greenwash, there is very little substance to their heralded claims of environmental responsibility. Concentration is devoted to tracking energy consumption within restaurants, implementing energy efficiency devices and creating a sustainable supply chain.
All the documented highlights are relatively small and taken from distinct sectors across their operation, not allowing any momentum of change to be built in one area. Without this direction and a lack of desire to confront environmental problems, significant inroads into emission reductions cannot occur. With extensive expansion plans afoot, the trend of emission increase is set to continue.
Vision and leadership
The challenge facing businesses in the fight for sustainability can be seen as the struggle to decouple their carbon footprint from business growth. It’s within the DNA of a business to grow, normally at the expense of the environment, but Marks and Spencer’s are proof it doesn’t always have to be the case when strong vision and leadership from the top of the management pyramid exist.
The current view that growth and decreased emissions can’t work together needs to be reassessed by business leaders around the country along with the feasibility of implementing solutions that, in the long run, will benefit both profits and limit the effect of Climate Change. Only then can business growth and the environment start to prosper in harmony.
by Nathan Shaw
Other Posts by Mark Whitman
Sustainable Business Forum