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Municpal Solutions

The State of Green Business, 2017

July 2, 2020
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Adapted from the 2017
State of Green Business report.
 Download here.

By: Joel Makower

It’s hard to imagine a
time more hopeful and horrifying for sustainable business.

On the one hand are
great achievements and milestones. The Paris Agreement on climate change was
ratified last year, faster than any United Nations pact in history, a powerful
confirmation of the importance the nations of the world attach to combating
climate change.

Companies continued to
ratchet up their commitments and achievements on renewable energy, greenhouse
gas emissions, sustainable supply chains, water and land stewardship, the
circular economy and other aspects of a sustainable enterprise.

Technology continued
its inexorable march, accelerating sustainability solutions in energy,
buildings, transportation, food and just about everywhere else.

And yet.

The indicators
continue to be troubling. Global atmospheric concentrations of carbon dioxide
are unprecedented compared with the past 800,000 years, according to the
U.S. Environmental Protection Agency (PDF)
, even after accounting
for natural fluctuations. Global temperatures continue to rise, and the 10
warmest years on record worldwide have all occurred since 1998. Other metrics —
on coastal flooding, heat-related deaths, wildfires, polar sea ice, biodiversity
and more — continue to go in the wrong direction.

The indicators continue to be troubling. The
cost to companies and economies continues to rise, too.

The cost to companies
and economies continues to rise, too. According to a
report 
 last year from the OECD, air pollution will cause
6 million to 9 million premature deaths annually and cost 1 percent of global
GDP by 2060. Meanwhile, more than 650 million people are living without access
to an “improved” source of drinking water, according to The State of the
World’s Water 2016
. Diarrhoeal diseases caused by unsafe water and
poor sanitation are themselves the second biggest child killer — 315,000 young
lives extinguished annually worldwide. Many of these illnesses and premature
deaths represent future customers and employees.

In most regions of the
world, market consequences from climate change are projected to be
net-negative, says another OECD
report
. The macroeconomic costs from selected market impacts alone
amount to between 1.0 and 3.3 percent of annual Gross Domestic Product by 2060.
That year may sound a ways off, but it’s roughly the same time interval as the
one between the end of the Vietnam War, in 1975, and today.

And that doesn’t
factor in the economic consequences of the loss of natural capital, from crop
pollination and pest control to biodiversity and flood protection, which companies
rely on both directly and indirectly. All of which could further roil markets
and the companies that operate therein.

Muddied waters

The Paris Agreement
provided hope that nearly 200 nations would work in concert toward mitigating
many of those impacts. But the 2016 U.S. presidential election — and, to a
lesser degree, the U.K.’s vote last year to leave the European Union — muddied
the waters, promising to slow progress, perhaps significantly. As this report
is being published, barely two weeks into the administration of President
Donald Trump, much about future climate action and environmental protection
remains unknown.

Companies and markets dislike uncertainty, and
the coming year or two may see head-snapping policy shifts.

Companies and markets
dislike uncertainty, of course, so the coming year or two may see head-snapping
policy shifts as the public and private sector grapple with two seemingly
unstoppable forces: the political momentum of an increasingly nationalist and
protectionist world, and the wrath of a changing climate on a civilization
ill-prepared to cope. Which force will dominate is anyone’s guess.

And yet.

Corporate innovation,
boosted by technology’s rampant pace, is enabling radical new levels of
efficiency in materials, energy, water and other resources. The Internet of
Things — the interconnected world of tens of billions of objects that can talk
to one another, and to us, and make real-time optimization decisions — is
enabling buildings, vehicles, power grids, factories and many other things to
do far more with fewer resources. Corporate clean power continues to ramp, with
prices ever dropping and efficiency steadily growing. Cities and regions are
accelerating their quest to become greener and more resilient, luring
corporations to relocate there amid transit hubs and culture centers. All of
which provide a powerful bulwark against those seeking to slow or reverse
progress in sustainability.

And the leading edge
of companies are embracing “net-positive” strategies, where buildings,
factories and supply chains create more beneficial impacts than negative ones.
Interface, the Atlanta-based carpet company and a trendsetter in sustainable
business, unleashed a new
set of visionary goals
 last year, which included creating
factories that function like the ecosystem they replace, providing such things
as water storage and purification, carbon sequestration, nitrogen cycling,
temperature cooling and wildlife habitat. The carpet company is starting this
audacious journey with a single factory in Australia.

Net-positive buildings
are beginning to sprout — a trend that seemed merely fanciful just a few short
years ago. Today, the notion of buildings and campuses that generate more power
than they use, or sequester more carbon than they emit, is within reach.
Meanwhile, net-positive companies are on the near-term horizon.

The trend is as remarkable as it is inescapable:
companies shifting from inadvertently negative impacts to deliberately positive
ones.

The trend is as
remarkable as it is inescapable: companies shifting from inadvertently negative
impacts to deliberately positive ones.

Net-net, will the
positives outweigh the negatives — in factories, economies, politics and all
the rest — and do so at the scale and speed needed to address the planet’s
greatest challenges? How much will proactive businesses counteract
heel-dragging governments? Will market forces or ideologues rule the day?

These are among the
questions to which we’ll be seeking answers during 2017, and likely beyond.