In late September this year, hundreds of people gathered in New York for Climate Week. First held in 2009 through a series of small panel discussions, the event has bloomed into a week-long series of high-profile events, networking and spectacle. It was even dubbed “Burning Man for Climate Geeks” by the New York Times.
With El Nino setting Australia up for a scorching summer and the US and Europe just leaving the hottest summer on record – it’s becoming apparent that we can’t afford to see the same polarisation around sustainability that we are seeing in politics, both in Australia and abroad.
Businesses still seem to view sustainability and profitability as mutually exclusive. They either make sustainability a business focus, or they choose to focus on profitability. However, it is not a binary decision. Businesses can both drive profitability and reap sustainability by focusing on innovation, the use of data and cutting edge solutions.
The concept of sustainability and revenue, growth and profits going hand in hand is not a new one. Ten years ago, the Boston Consulting Group the World Economic Forum research underlined that sustainable business practices in the developing world helped businesses consistently generate above-average growth rates and profit margins.
For agriculture, sustainability can also run alongside profits and growth:
Cost Reduction and Efficiency
Energy efficiency, waste reduction, and resource conservation play a pivotal role in lowering operational expenses. Take red meat processing, for example. Using technology to streamline operations to be faster and work with unchilled carcasses reduces chiller utilisation, which directly translates to energy cost savings.
Similarly, feedlots can optimise their operations by precisely determining when an animal has reached the ideal conditions for processing. This not only reduces the need for excessive feed and water for that particular animal but also contributes to overall waste reduction.
Crucially, sustainable practices drive businesses to identify and eliminate inefficiencies within their operations. Data plays a central role in achieving this. The more data a company gathers and integrates into its machinery, the greater the potential for analysis, enabling the pinpointing and elimination of inefficiencies. This data-driven approach empowers companies to make informed decisions that enhance sustainability while simultaneously bolstering profitability; a tangible boost to a company’s bottom line.
Access to Capital
Recently, the ASX highlighted a notable shift in the priorities of investors, with sustainability considerations taking on increased significance in their decision-making processes. This transformation is particularly pronounced as a younger generation of investors begins to shape the investment landscape. A commitment to sustainability would not only align with the values of a socially and environmentally conscious investor base but also put companies at a distinct advantage in this tight capital market.
In a similar vein, venture capitalists want to see more, and better ESG reporting from startups as a third of them struggle to identify suitable ESG investment opportunities. As sustainability reporting becomes more widespread, companies with well-defined and intrinsic practices may be more attractive to investors, as they will be able to provide clearer insights into ESG performance and highlight that sustainability is not just confined to one section of the business, but rather runs through the veins of the whole enterprise.
Customers should not shoulder the responsibility of sustainability
As companies look more closely at seamlessly combining sustainability and profitability, they must recognise that driving sustainability benefits should not fall on their customers. Instead, companies should focus on their own solutions providers and ask how they are helping from both a business and sustainability standpoint. Companies should not have to pursue a solution, product or process that makes them more sustainable, but rather sustainability needs to be inherently built throughout the solutions supply chain.
Machinery manufacturers, in particular, bear responsibility for ensuring that the machinery they create is ‘smart’ in the context of being able to connect to larger systems that have a holistic view of processes that maximise efficiency and sustainability. Moreover, they have a responsibility to ensure that anything they create is practical and easy to use, otherwise, the barriers to adoption for a business are simply too high.
The evolving landscape of sustainability in business demands a profound shift in thinking. The notion that sustainability is merely a cost burden is increasingly outdated. Instead, it emerges as a source of competitive advantage, facilitating access to capital and driving cost reduction through heightened efficiency.
By Remo Carbone, CEO of MEQ
This article was first published by Eco Voice