Sustainable business in the 2020s
We have not only entered a new year, but a new decade as well. A decade in which sustainable business and capital will develop and grow in an unprecedented way. Throughout the 2010s, technology has proven to be the definite game-changer. This will continue in the 2020s, yet the perspective will be from society at large, as the shift to sustainable business and capital will no doubt be the most significant shift of the next decade.
It is absolutely vital that business and capital use technological means to make this shift to sustainability. The numbers tell us that business will fail in a world that is falling apart due to climate change, resource scarcity, lack of drinking water and growing inequality. Recent economic reports indicate that Canada will increasingly be shaped by the challenge of climate change.
Public concern about the impact of climate change is growing rapidly and rightfully so. The whole point of setting the UN’s Sustainable Development Goals for 2030 is that with this deadline in place, we will aim to achieve the goals in time to safeguard a functioning and lasting world and economy. Since we adopted the goals in 2015, there has been much preparation. The next ten years will have to be a period of action, rather than words. Currently, Canada ranks 20th globally amongst countries striving to hit the Sustainable Development Goals (SDGs). Despite progress with regards to healthcare, which is obviously crucial to the country and its economy, and gender equality, Canada faces great challenges in environmental-related goals like climate change and responsible consumption and production. Despite these challenges, this decade we’ll witness tremendous change and Canada in 2030 will not look like the Canada of today.
Business for good is good business
This to-do-list for Canada and the entire world, for that matter, is not only a must-do but also a want too. Business and capital should also want to achieve the Goals. The Sustainable Development Goals offer tremendous new market opportunities, $12 trillion by 2030 to be precise. The Goals also inspire new ways to relate to customers and employees, build company reputations, and trigger organizational agility. They also write the roadmap on how to become and stay relevant in the market and the economy.
Being at the forefront of sustainability during the next decade will mean being on the winning side of business. Canada has a lot to offer, with numerous companies and innovations that can bring the country to the forefront. There is a positive business case for sustainability too: business for good is, in fact, good business, like the title of my book The Trillion Dollar Shift states. So, what are the emerging trends for companies to build on throughout the 2020s in Canada?
The cleantech decade
At the start of this new decade, cleantech is Canada’s fastest-growing industry. The sector will grow tremendously and become a significant part of the country’s income - growing from $11.3 billion annually. Canada exports 52% of cleantech - 10% to the US and 42% to the rest of the world. Alongside the sector, and essential to the sector, is the growth of cleantech investments. In Canada, the cleantech investment sector is growing rapidly and that growth will accelerate. Companies like Arc tern Ventures, Canada’s largest cleantech venture fund, recently reached their $200 million in commitments. Canada is great at the early innovation stage. Yet in the 2020s it will be crucial for Canada to accelerate and scale up the commercial and growth stages too. This is possible and there is huge market potential to be gained in the world’s fastest-growing market. But it requires other skills, funds and investment strategies. It is a seize or die decade for Canada, since if commercializing and scale-up companies can’t get access to next stage capital, they’ll get it elsewhere or be bought by multinationals, but not to the benefit to Canada. If they do get that access, Canada will get a tremendous piece of the huge cleantech cake.
Technology for good
Technology is the biggest accelerator for sustainability in the 2020s, or at least it should be. Canada is aware of this - the Canadian tech community launched the ‘Tech for Good Declaration’ at the True North Conference mentioning the importance of Canadian Industries to innovate with a positive impact on society’s challenges.
In the next decade, every company in the country, as well as elsewhere, regardless of the sector, needs to go tech. Small and big data, robotics, AI, drones and other innovative technologies offer new pathways to sustainability as well as business opportunities. Technology creates a hyper transparent future since it is driving new possibilities and expectations for real-time tracking, measuring and decision making around the globe. Thus, these new technologies are crucial for transforming supply chains, products and services as well as the way companies communicate and interact with clients and stakeholders. We will need to rely on technological innovation to enable us to beat climate change by inventing and scaling electric vehicles in ways that haven’t been effectively addressed yet, like trucks, ships and airplanes. By inventing cheap as well as long-term storage solutions, accessible solar power, carbon capture and storage, and hydrogen solutions, the companies with technological solutions will thrive, and so will our planet.
Circular economy for real
The 2020s will compel a major shift toward a circular economy. For companies, incremental changes in the supply chain will no longer suffice. Supply chains will need to be redesigned and reinvented as technology enables the transformation and the new generations demand it. Anti-plastic sentiment is already higher than ever before and will translate into a major change.
And it is a crucial change, considering that inaction means there would be more plastics in the sea than fish by 2050. In the next decade, governmental policies and tax systems will have to change to support recycling rather than frustrating it and to put a, right, price on carbon and resources. Even without these changes, consumers will demand more recycled packaging and sustainable supply chains. Consumers will insist upon a no-waste policy which will necessitate a fresh perspective on how we do business and will require the bold move to a real circular economy.
Canada has a long way to go circular. Each Canadian currently produces 1.9 kilograms of non-recyclable waste every day, which is a higher number then, for instance, USA, Australia and China. Yet a significant number of Canadian companies are developing innovative solutions to increase the lifespan of products and divert from the landfill much of what we throw away. Reusing, repurposing, repairing will be 2020’s buzz words, but, more importantly, this is a huge market which is currently relatively untapped. This September, Canada will be hosting the World Circular Economy Forum 2020 and hopefully it will be one of the drivers behind an acceleration and scale-up of circular business models and their impact in Canada.
The decade of sustainability
The 2020s will be the decade of sustainability. It will mean adapt and thrive, or deny and die. It is literally the tip of the iceberg we see now. The future of all of us and thus of business relies on our joint ability to transform. Tackling the challenge means new opportunities for growth, innovation and resilience investments. And the potential for Canada is enormous. The country has entered the decade of sustainable growth.
Marga Hoek is a global thought-leader on sustainable business and the author of The Trillion Dollar Shift, a new book revealing the business opportunities provided by the UN’s Sustainable Development Goals. The Trillion Dollar Shift is published by Routledge, priced at £30.99 in hardback and free in e-book. For more information go to www.businessforgood.world