How Entrepreneurs Can Fight Climate Change and Build a Profitable Business at the Same Time
In the last eighteen months, tech entrepreneurs have been transformed from aspirational role models to the objects of public criticism. A series of scandals have, rightly, led to growing scrutiny of an industry that was once seemingly untouchable. To build trust today, founders must prove that they are not part of the problem; that they can make a profit, but also create positive change.
Climate change is an obvious place to start. In March 2019, thousands of children walked out of their schools to demand climate action. Greta Thunberg, 16, summed up the thinking behind the protest in a speech at Davos: “I want you to act as if you were in a crisis…as if the house were on fire. Because it is.” And she is right -- already, the economic and health costs of pollution and climate change are profound and potentially irreversible.
Entrepreneurs across all sectors must play their part in global efforts to reduce emissions by 45 percent by 2030, to avoid the catastrophic consequences of climate change.
But how do you scale sustainability? And how do you make it more than a cosmetic, tick-box CSR effort?
Businesses can’t thrive in a world where people don’t.
As the world’s problems grow and it becomes clear that they’re too big for governments to tackle on their own, the private sector must pitch in to help create the infrastructure to support and scale sustainability.
This is most obvious in my own sector, mobility. A recent McKinsey report warned that under a 'business as usual' approach, in which demand for transportation swells with growing populations, mobility-related emissions could rise exponentially -- which is no good for the people exposed to the life-limiting air pollution this will generate.
There is hope though. In the next few years, I believe that profit with purpose will become the new norm. Younger consumers are already driving this trend, buying into businesses that are doing good and turning their backs on those that don't. Already, 39 percent of millennials believe the goal of businesses should be to improve society, and this will only rise in the future. By 2020, millennials will make up 40 percent of all consumers -- so the onus is on business leaders to stand up and take note.
As the world changes, resources dwindle and consumer attitudes evolve, sustainability makes good business sense. Being green no longer has to mean unprofitable -- in fact, sustainability may well become the 21st century model for enviable growth.
Listen to the zeitgeist.
If that wasn’t enough of an incentive, these consumer trends are also creeping into the boardroom and AGMs. In recent years, climate-focused investors have forced major concessions from trillion-dollar fund managers and fossil-fuel multinationals around the disclosure of climate risks.
Many investors have woken up to the pitfalls of a short-term, profit-at-all-costs approach to business. As natural resources dwindle, such a model only has a short runway. This understanding is fueling the exponential growth of more sustainable investments -- the global green bond market, for instance, is expected to reach $200 billion in 2019, up from only $44 billion in 2015.
The effect is spreading throughout industries. Sustainable investor advocacy network Ceres recently called for US mobility companies to take decisive action to reduce carbon emissions and prove that they are on "the right side of the climate equation”. And it's not just investors and consumers applying pressure -- in mid-April, more than 4,000 Amazon employees published a letter calling on executives to take serious action on climate change.
Change behaviors, one at a time.
It’s tempting to believe that environmentally-friendly ideas -- the ones that require real shifts in behavior -- will never catch on because consumers are too stuck in their ways.
Sparking behavioral change is never easy, but it’s entirely possible. You just have to start small, and focus on one change at a time.
We’ve had our work cut out changing the habits of consumers who have been driving the same way their whole lives. Over time, we have succeeded -- in France alone, 40 percent of 18 to 35-year-olds are now regular carpoolers. Our takeaway? Drastic behavioral change works well when you encourage it incrementally.
It’s also important to show consumers the benefit of their positive choices. Recently, BlaBlaCar decided to publish the carbon savings generated by our community -- 1.6 million tonnes of CO2 in just one year of carpooling. The independent research meant we were able to show consumers the disproportionate impact of a simple behavioral change, reinforcing sustainable decisions and further incentivizing the shift away from driving alone.
As more and more consumers become used to sharing their food, pets, cars and apartments, others, in turn, become more receptive to embracing positive change.
Sustainable consumption -- which doesn’t curtail business growth or consumer choice -- soon becomes the norm.
The entrepreneur’s responsibility
It is an entrepreneur's duty to build a profitable business. But our responsibility does not stop there.
Our businesses do not exist in a vacuum. As global citizens, it is also our duty to engage with the challenge of climate change at a meaningful level, not just as a cursory CSR exercise.
If, as in Thunberg’s analysis, the “burning house” is the planet -- and there is no emergency exit -- there really is no other choice.