Sustainability–Driver of a Radical Future
Oh, that Electric Vehicle! This car has single-handedly revived my joy in driving. Not only that—I gain a lot of personal satisfaction in passing by gas stations on our voyages through the Colorado mountains. But that’s just me—other people still love the vroom of a mighty gas-powered engine and contribute in different ways to the sustainability movement.
This third blog post in our series is about one element of purpose that has gone from individual to world-wide and corporate obsession over the past several years—sustainability.
In 2020, we all noticed the (possibly only) upside of COVID-19. Curtailing our activities like travel and consumption made a positive impact on the environment. Responsible companies noticed too—thus the myriad sustainability goals set by companies in every industry, from retail to oil and gas. Recently, Darragh and I sat down with one of SAP’s Sustainability champions, Tom Raftery. Here’s what we learned:
Let’s zoom out and start with the world. It gets bigger and smaller at the same time. There is a strong link among society, economy, and climate—you can no longer have one thing without the other. The smallness of the world is evident when we deal with COVID-19 related supply chain issues. Have you waited a long time for delivery of items? They could be hung up due to the lack of shipping containers, the overtaxed ports, or the shortage of truck drivers (this Forbes article describes it well). All these worldwide problems existed before COVID-19 but have been exacerbated by the pandemic.
The United Nations has been in the sustainability game for years—in fact they set 17 Sustainable Development Goals in 2015 that guide more than 178 countries today. As Tom says “We have no non-radical future. We either ignore the problems and deal with the radical weather-related disasters that result from it, or we radically change to avoid those problems.” Repercussions and fallout from tropical storms, droughts, wildfires, and floods of the past 2 years show us we can’t ignore it anymore.
And governments have not ignored it. Tom informed us that the EU recently mandated a reduction in emissions by 55% by 2030 against a 1990 baseline. If this seems easy, we must realize that in the last 30 years they have reduced 24%. And now in 8 years they have legally bound themselves to do another 31%. Nothing like this has ever been attempted before.
But it’s not impossible, and the moves continue. China has taken steps to announce commitments to reduce emissions per unit of GDP, and move away from fossil fuels. Their goal—gaining 1.2billion kilowatts from solar and wind for 2030.
Companies too, are announcing major goals and are reaching them. Disney aims to be net zero on emissions from their direct operations by 2030. Microsoft aims to be carbon negative by 2030 and share their progress here. We at SAP are well on the way to carbon neutrality by 2023. Even in carbon intensive industries like brewing there are examples like Brewdog who recently announced they have gone Carbon Negative (through process efficiency and offsetting carbon emitted through the brewing process).
And why would companies commit to these goals? Well, they’re good for business! Kevin Sneader from McKinsey recently updated his article on forecasted trends for 2021. He states “Climate change is an existential risk but it is also probably the biggest opportunity of our generation in terms of the scale and scope of investment needed to ensure the recovery is more green than brown.” Kevin doesn’t mention innovation, but Tom Raftery does as he explained to us:
Need drives innovation, and the need for sustainability is great. Let’s start with the basics–just measuring and reporting emissions will be mandatory, but it hasn’t been done before at this scale. It’s a great opportunity for innovation. Based on the aggressive goals set worldwide, massive amounts of innovation will be needed to reduce emissions and eliminate carbon from the atmosphere. And the continuing fall in the cost of renewables while fossil fuel becomes more expensive may be a catalyst for individual behaviors.
Finally, an increasing body of research points to multiple benefits for companies who purposefully and consciously manage their responsibilities to the planet and to society. Take Patagonia for example. They have inseparably linked purpose with profit – their recent clothing lines are made from recycled fishing nets and plastics from the ocean. They can charge a premium as a result. Society AND shareholders benefit. This is growing the pie.
Alex Edmans in Grow the Pie looks at multiple examples of innovation and excellence, carefully considered to deliver benefit for all of society. He shows how this translates into companies having a better bottom line. Not only that, they have better relationships with their investors, shareholders, and the communities in which they operate. Companies who support sustainability are more attractive to the workforce and can lower the cost of recruitment and retention. People want to work for a company they can be proud of!
And that takes us right back to the individual level. Maybe you don’t want to buy an EV right now. But what can you do as a human being to support sustainability? Tom Rippon (CEO of OnPurpose UK) points out that companies and individuals cannot think alone anymore. He points out the need to move from self-actualization or ego-systems, to self-transcendence or ecosystems – and urges us to think bigger to embrace that we’re part of a community. Here are three things you can do—think of your favorite BEV!
- Buy green – take personal action! Try to be aware of the carbon implications of all you buy (not always possible/easy) but buy and consume responsibly (this sends a demand signal for low carbon/sustainable products)
- Educate yourself and others – advocate for climate actions in your place of home, place of employment, and community and
- Vote – understand the climate policies of all your elected officials Consider the climate filter as you cast your vote and make others aware of your level of commitment to this issue.
Next up at the Maddox household is a solar array that will render the EV a “free ride.” Again, technology and innovation are providing a capability that was not available 10 years ago. As I tool around the Colorado Mountains in my electric vehicle, I can say I’m a convert to sustainability. What’s your next step?
Excellent blog Staci. Thank you for your passion in this mission critical path towards a sustainable future.
Thank you Bob! I believe we share that passion and am so glad to support sustainability efforts at SAP and everywhere.