Author: David W. Jia
Site of publication: Medium
Type of publication: Article
Date of publication: August 2022
Entrepreneurs build, expand, and manage businesses, hire and train employees, serve customers, raise funds, form connections and partnerships, navigate complex networks and regulatory webs, and devise sound investment strategies. Successful business entrepreneurs anticipate trends and challenges and devise strategies to capitalize on them. Without a doubt, one of the most pressing issues of today is climate change.
Climate Change is one of the major concerns of our era, and addressing it successfully requires a worldwide effort. Since the 2015 Paris agreement, in which countries globally agreed to pursue efforts to keep the increase in global average temperature below 2 °C above pre-industrial levels, climate change has become a central focus of national policies and corporate values, as well as a central concern for global citizens. Moreover, it is a cross-generational issue that affects not only the world of today but also the world of a century from now.
Entrepreneurs, their businesses, and their innovations have been life-changing. However, it is hard to deny that rapid industrialization as a result of some of these innovations is one of the primary contributors to climate change over the last century.
Why should entrepreneurs care about climate change?
It is not an obligatory task for entrepreneurs to take action on climate change. However, there are profitable implications and market incentives that may draw entrepreneurs’ attention to the issue.
Seventy percent of consumers who name sustainability as an essential consideration are willing to pay a 35% premium for environmentally responsible products. According to the Boston Consulting Group, businesses that include sustainability in their business models and governance will maintain a competitive advantage over time.
A sustainability strategy can reduce expenses, mitigate risks, and improve financial performance. When a company has a strong sustainability premise, its potential to penetrate new markets and expand in existing ones is enhanced.
The shift in focus toward climate change
The world is confronted with a serious global climate challenge that will require innovation and fresh insights to resolve. Thus, now is the time for the entrepreneurial spirit to emerge.
Part 3 of the BNP Paribas Global Entrepreneur Report 2020 on sustainability reveals that entrepreneurs, particularly European entrepreneurs, view climate change as a top priority among the 17 Sustainable Development Goals of the United Nations.
A sustainability strategy can reduce expenses, mitigate risks, and improve financial performance. When a company has a strong sustainability premise, its potential to penetrate new markets and expand in existing ones is enhanced
Effectively combating climate change will necessitate societal and economic transformations. Energy will have to rely less and less on fossil fuels, transportation will become electric, and real estate will become greener and less energy-intensive. In the next 10 to 20 years, an almost uncountable number of industries will undergo radical transformations in response to climate change.
Develop an interest in sustainability
Entrepreneurs can effectively demand sustainability from others. They can demand a change in their supplier chain. For example, Apple has pledged that its products and supply chain will be 100 percent carbon neutral by 2030. This is likely to encourage competition among Apple’s suppliers to become more ecologically responsible. Entrepreneurs and major organizations can have an impact on the fight against climate change if they take this action.
Put concepts into practice
Governments cannot tackle the task of combating climate change on their own due to their limited capacity; however, they can impose stronger restrictions and offer incentives for environmental sustainability.
If businesses collaborate, it will be considerably simpler to mitigate climate change. Solar energy, wind power, electric cars, remote working tools, and emission-reduction technologies exist, and entrepreneurs may make them a reality.
Startups are in the ideal position to innovate since they are tiny and have an open culture, in contrast to governments and major organizations that require time to approve new initiatives. Already, entrepreneurs contribute to climate action. One area is electric vehicles and the expansion of car- and bike-sharing systems.
With plant-based meat and lab-grown meat, respectively, companies such as Impossible Foods, Mosa Meat, and others have introduced innovation to the food industry. Bowery Farming, a Google-backed vertical farming company, supposedly uses 95% less water than conventional agriculture.
Break the habit
Entrepreneurs are capable of providing new perspectives and ideas to the world. Henry Ford was instrumental in the development of automobiles with combustion engines. Elon Musk, another entrepreneur in the same industry, shifted away from the internal combustion engine.
When Musk co-founded Tesla, electric vehicles were not taken seriously. Against established car makers, it was an uphill battle. Today, not only does Tesla have the largest market capitalization of any automaker, but it has also revolutionized the auto business. Even IT titan Apple is contemplating entering the electric vehicle industry.
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