SUSTAINABILITY
Implementing a circular economy model In March 2020, the European Commission adopted the Circular Economy Action Plan. It is one of the main building blocks of the European Green Deal, the new agenda for sustainable growth in the European Union (EU). The projected transition to a circular economy is designed to reduce pressure on natural resources and create sustainable growth and jobs. By 2030, the goal is for all companies to use a circular business model in their operations. When making the switch to a circular business model, you must first consider how you can redesign your business model, as well as your products and services. This is a big change that requires a complete change of mindset, so every team in the organisation should be involved in brainstorming, from procurement and marketing to HR and design. Questions to ask include: “How can you transform your business’ current negative environmental impact into a positive environmental impact?” and “How might your business be able to contribute to a regeneration environment?” Analyse the negative and positive impact your company has on ecosystems in accordance with the tools provided by the Circular Economy Action Plan, as well as information from the aforementioned OECD Guidelines , the EU Corporate Sustainability Reporting Directive, the EU Corporate Sustainability Due Diligence Directive and other legislative dependencies. Once your business’ existing impact has been identified, you can consider the measures you need to take to neutralise and reduce its negative aspects. A useful exercise at this juncture is to create a balance sheet. On one side, detail your organisation’s negative environmental contributions and the cost of these. Then, on the other side, write down the measures you’ll take to reduce these and how much these actions will cost. Examples of measures taken might include: cleaning the water you use and reusing it; collecting the chemicals used in a business process and reusing them; addressing the noise produced during the company’s processes; and planting trees and designating areas in agricultural fields for rewilding to support local wildlife. Supporting continuity and profitability If there is an adverse environmental impact that you really cannot balance, you can invest in a fund dedicated to the regeneration of biodiversity, such as the ASN Biodiversity Fund. These funds tend to invest in nature-positive activities, such as forestry planning, marine research, eco-tourism and certain types of fishing. Meanwhile, as materials and products are given a longer lifecycle, the implication is that less money will need to be spent on raw materials and associated costs. This should support the long-term continuity and profitability of a business. Moreover, many employees will be happier in the knowledge that they are working for a company that implements good business practices. The fewer negative impacts a company produces, the more attractive it is among investors, who now need to be transparent about their portfolio’s impact in environmental, social and corporate governance (ESG) terms.
By pursuing the path to a circular economy model, evolving corporate reporting processes become far easier to adhere to. Indeed, litigation about violating environmental licence requirements, environmental pollution, non-compliance with the Paris 2015 goals and greenwashing all stand to be consigned to history. Instead, a company’s business model can become central to its marketing appeal and social enterprises often find that the company’s message sells its products or services, removing the need to advertise their specifics. Examples include Dopper, a company that sells refillable water bottles to fight plastic pollution with the slogan “The bottle is the message”, and Tony’s Chocolonely, where the slogan “crazy about chocolate, serious about people” denotes the company’s focus on ensuring its supply chain and operations are 100 per cent free of exploitation. How can we change our approach to sustainability? Business schools, boardrooms and governments should talk about the aforementioned planetary boundaries. These relate to processes that regulate the stability and resilience of the Earth; there is a risk of generating large-scale environmental changes if they are transgressed. Business schools should encourage students to talk about business practices in relation to all nine planetary boundaries. Taking these into account when making business decisions will help bring about positive global environmental change. Engagingly positively with the natural world is the only way to be both environmentally responsible and financially profitable but businesses – and by extension, providers of business education – must act now.
BIOGRAPHY Tineke Lambooy is a professor of corporate law at Nyenrode Business University in the Netherlands. Her research and areas of interest encompass topics that include corporate social responsibility; corporate governance; the circular economy; business and biodiversity; investing in biodiversity; and the rights of nature
Ambition | MARCH/APRIL 2024 | 19
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