Business, Policy, and Economics for the Future: A Sustainable Approach

A fortnight ago you read about the IPCC report’s finger-pointing, 7 days later you glanced over the future of energy sourcing…now we will have you contemplate sustainable strategies for business, policy, and the general economics of the future! What exactly does sustainability mean? Simply put, a business is sustainable if it minimizes its adverse impacts on the environment and incorporates environmentally-friendly operating principles while managing to return a net profit, so as to keep things going. So, what will allow a business to continuously return a net profit in such a manner? One answer is by making products that last long. In the current times, consumerism has taken on a fickle mask causing people to regularly replace their gadgetry and personal hardware – according to a 2011 survey by the International Monetary Fund (IMF), people in the UK get a new phone every 22 months, only beaten to ‘top’ spot by the US of A… similar trends exist for TV sets, cars, and other accessories. Such a trend has been in part perpetrated by mobile contract operators who tend to offer handset upgrades at the end of a contract’s tenure. There is little sign of this being on the turn; however recent viral concepts such as Phonebloks (from Kickstarter) have shown that there is substantial consumer demand for electronic products that are more sustainable, with companies such as Motorola showing great interest and supposedly developing a very similar concept phone of their own. Stemming from that thought, another answer may well be to implement infrastructure that encourage consumers to embrace environmentally-sustainable concepts. For instance, constructing buildings using more steel than concrete, incorporating solar cells and mini wind-turbines into their designs, developing materials that absorb and trap CO2 to lay pavements with – these are all examples of how sustainability has been introduced into various communities around the world. Note, however, the word ‘introduced’. For any semblance of sustainability, ideas have to be implemented on a large-enough scale to make a difference, which is where economics and policy can play their part in making things happen. To simplify the economics to an almost-sacrilegious level, if policy makers were to rule that all future construction in a town/city would have to conform to particular standards and designs incorporating sustainability, the demand for the appropriate products and raw materials would increase, making business profitable for suppliers, while demand for sustainable construction would also rise, at the very least maintaining profit margins for constructors. This change can also be brought about by greater consumer awareness. At the recent 20th Anniversary event by Global Action Plan, a UK-based charity focusing on encouraging environmentally-conscious behavior, Chris Rapley noted that if CO2 were orange and noxious, people would very likely be a lot more concerned about it and the mitigation issue might already have been addressed by now. This implies that: because one does not consciously get directly affected by increased CO2 levels in our daily lives, one feels less inclined to take any steps against it. As a result, businesses which already attempt to be sustainable and promote it to their customers, somehow find their efforts not being reciprocated in terms of interest from the market. Thus, the challenge is to motivate people to worry about climate change and sustainability by showing them how it will affect their lives. On the other hand, there are businesses and sectors of the economy that are decidedly unsustainable, such as petrochemical companies and their associated industries. How can they make a difference? On paper, one possible strategy is to focus on biofuels development, but that would require a substantial write-off in terms of capital and an unhealthy level of fresh expenditure to merely adapt their business to biofuels, after which there would be the costs and problems associated with securing land suitable for cultivating biofuel crops, and so on. It may well be that they would have to completely shift their focus and redevelop their brands. There are yet many more issues to be discussed in such a fashion. How would future conurbations, megalopolises, and even ‘smart’ cities be planned and designed? Will a ranking on the Dow Jones Sustainability Index become the single most important statistic for a business to predict its future? Should policymakers be obliged to be climate-aware and incorporate sustainability into policies? Well, we are no experts but we are certainly keen to hear some of them discuss exactly these issues this Saturday in College. Want to hear more conclusive and insightful discussions about sustainable business, policy and economics of the future? Come along to the London Climate Forum at Imperial College London on 9th November for a panel discussion on this subject and a host of other exciting talks and exhibitions.

Visit www.londonclimateforum.org for more details as well as to grab tickets!