Everywhere you look there are articles, courses and seminars on the subject sustainability. Almost every business now has to have the word sustainability added to it. Sustainable manufacturing, sustainable agriculture, sustainable power and the list goes on. There are more sustainability consultants than you can shake a stick at but so much of this, important though it is, misses a vital point. The way to sustainability& net zero is profitability. The move to sustainability costs money and money comes from profits. If government really wants change then the incentive for business is an increase in profitability.
Any industry can reduce carbon footprint, reduce energy consumption and resource utilisation. There are many ways from solar and batteries through to process improvements, but they all cost. The same is true for sustainable or regenerative agriculture, there is a cost.
If we want to go down the path to a sustainable economy, let alone net zero, we first need to ensure that our businesses are profitable and not only that but sufficiently profitable to enable them to invest in the future. Matched funding, grants and soft loans are fine but at the end of the day they must be paid back. Either in the form of repaying loans, finding the matched funding or, in the case of grants, taxation. Where does taxation come from? Answer, taxation of profits and earnings.
If we really want to encourage businesses to invest in green technology and process improvement then we have to make it really attractive, and the way to do that is make green technology produce goods and services that are more profitable than those produced in unsustainable ways. Penalising such things as products with long supply chains requiring large amounts of energy and single use products are just two of the many things that government can do which cost nothing but have a huge effect. Seriously effective taxation policy such as allowing a tax write off of twice the cost of proven green technology in the year of purchase would be a huge incentive to invest.
From a consultancy point of view, the way to sustainability is not to begin with sustainable or net zero projects but to start with addressing the profitability of the business. Sustainable profit improvement projects are the way forward. Not sustainable projects that may be profitable. More effective ways of producing goods and services and increased margins increase profitability and release money to invest in a sustainable future. You note I say more effective ways and not necessarily more efficient or more productive. To be sustainable we must ne effectively profitable.
Every sustainability project must justify itself financially. It is no good having green businesses going out of business to support the planet. All this will do is drive work into the less sustainable sectors or overseas. In order to have a sustainable future all projects must put profitability and affordability first. It is the job of government to help make sustainable projects more profitable than non-sustainable ones.
If you would like are interested in effectively increasing profitability in your organisation please read the blog How To Effectively Increase Profits then please Contact us and we will be happy to help.