Why in-house environmental management is not enough

Wnyone who surfs the Internet today through the homepages of companies will notice that very many companies today refer to sustainability. This is a new trend that has emerged in the last 15 to 20 years. Because 20 years ago, sustainability and especially the part that relates to the environment was mainly seen as a cost factor. Today, many companies realize that operational sustainability strengthens customer loyalty, retains capable employees and is a condition for long-term profitability.

Practical constraints dominate everyday life

The internal view offers a more differentiated picture. Constraints often make implementation difficult, short-term cost and risk considerations mean that projects cannot be implemented, a lack of and incorrect information from the supply chain prevent better environmental performance and even lead to reputational risks. Engineering capacities are scarce and cost pressure often leads to settling for the second best solution. Thus, the potential for optimization in companies is still great and offers opportunities to distinguish oneself today. At the same time, it is understandable that companies first and foremost want to manufacture a good quality product and must be profitable in the process.

A sober assessment of the sustainability of companies therefore shows both light and shade. Overall, however, the impression is that very many companies are making serious efforts to do justice to the issue of sustainability, and individual companies are doing a great job of it.

CO2 reduction as a Herculean task

However, this situation contrasts very strongly with an objective assessment of the state of our planet. Issues such as climate change, water scarcity, resource depletion and loss of biodiversity show a clear need for action. The easiest way to quantify this statement is by looking at climate change: If the global temperature increase is to remain below 2°C, we in the industrialized countries must reduce our emissions of CO2 by at least 85% by 2050 - a truly Herculean task.

Three misconceptions

At the same time, we hear from the traditional business associations that it is not possible to do more "without endangering the economy". An unsatisfactory situation - after all, this would mean slaughtering the calf in order to get the cow's milk. This tricky situation is essentially caused by three misconceptions.

1. The economy is the big sole polluter
2. Companies could forego profit in favour of the environment
3. Today's economy is the only possible

Not a question of guilt, but a question of will

The statement that the economy is the sole cause and must therefore take measures is wrong. More than two thirds of our energy consumption is caused by transport and housing - i.e. by private consumers. But it is equally wrong to pass the buck to customers and say that they determine the products through their demand. It is also wrong to say that the "lemon in the economy has been squeezed and that it is therefore not possible to set more ambitious targets". First, as shown above, this statement is not true, and second, the example of energy consumption shows that it is the wrong lemon. For example, today the only sector with still increasing emissions of climate gases is transport: this lemon could well be squeezed more. The switch to more efficient vehicles, electromobility, combined mobility and virtual mobility, i.e. the replacement of travel by video conferencing, offer reduction potentials for the future totalling more than 60% - while maintaining mobility and, in some cases, significantly improving the quality of life.

The influence of pricing policy

Equally problematic is the expectation that companies should forego profit for the sake of the environment. It is the task of a company to optimise costs in order to be able to offer products cheaply on the market. It is therefore consistent with the economic basis that production goods that are cheap tend to be wasted, while those that are expensive are used sparingly. If labour is expensive but material is cheap, it is in line with economic logic to replace labour with material.

This connection can also be demonstrated in the case of climate change. CO2, the most important climate gas, still has a price that is far too low compared to the foreseeable consequences. It therefore costs too little to emit it. From a purely economic point of view, there is therefore no sufficient reason for companies to save CO2.

Somewhat exaggeratedly, one could say that demanding that companies behave in a non-profit-oriented manner is like forbidding the priest to preach. Of course there is the moral aspect, and companies should live up to the mandate to behave optimally within the bounds of what is possible. But it will not be enough to solve the challenges ahead solely through the voluntary good conduct of companies. It is not in their nature and it is not in line with their customers, who also tend to maximize their benefits and buy as cheaply as possible.

Waste is not foreseen in the conventional economic system

Closely related to this is the third misconception. If one were to develop a business or a society on a "greenfield" site, it would never occur to one to think of a society that would jeopardize its long-term survival because of short-term benefits. One would probably try to organize in such a way that long-term use and protection are in balance.

However, our economic system was not created on a greenfield site, but developed from a scarcity economy in which resources were so scarce that there was hardly any need to worry about waste. Only what could not be recycled at all was thrown away - and that was not much. Damage - if it occurred - was local and it was hardly conceivable that man could interfere with nature to such an extent as to cause an entire ecosystem to collapse. Only coal and later oil discoveries enabled a dramatic acceleration of material turnover and caused the - pleasant and unpleasant - side effects of our economy.

What is decisive, however, is that in this way of thinking, for understandable reasons, "disposal" in the broadest sense had hardly any cost implications: waste - of whatever kind - was dumped wherever it was practical. Companies optimized their operations accordingly: Profitability goes hand in hand with great waste of resources and large quantities of waste of all kinds. The conclusion is simple and sobering at the same time. Our consumption of resources is an understandable development. But it is just as clear that it is not necessarily the only situation. The crucial question is how to adapt our economic system in such a way that the side effects are minimised.

Today, as the formerly unexpected side effects become apparent, companies face a difficult challenge: to become completely resource efficient would probably jeopardize their profitability; but not to do so would jeopardize their long-term profitability to at least the same extent.

There are solutions...

From the point of view of swisscleantech, there is only one solution to this: companies that want to operate profitably in the long term must commit to new rules today. Sustainable and resource-efficient business must become profitable.

From the point of view of business, these new rules must meet four criteria: The adjustment must be approached in the long term, but implementation must begin quickly. They must provide companies with planning security and it should be possible to implement them as unbureaucratically as possible. In addition, they should be designed in such a way that they enable fair competition on the international stage as well. Admittedly, achieving these goals is not easy. But they are achievable. The prerequisite is that companies get involved in the discussion. Many large internationally active companies have now recognized this. At a lecture at Imperial College of London this spring, Unilever's CEO Paul Polman stressed that the current responses to climate change are not enough. They threaten the economy. Therefore, he said, climate change must be tackled systematically if the global economy is to continue to grow at all.

...not without politics

IKEA is aiming in a similar direction with its "people & planet positive" strategy: companies must commit to the environment beyond their own sphere of influence. This is why large and small companies are involved in the climate campaign (www.klimakampagne. ch) of swisscleantech, which calls for a committed Swiss climate policy. For SMEs in particular, such a platform is a feasible way to help shape the political future.

But political engagement must go further. "The right rules lead to more sustainable solutions for our customers," explains Wolfgang Schwarzenbacher, CEO of Cofely. But there is a lot of political legwork to be done. "This simply cannot be done by an SME," Schwarzenbacher stresses. "That's why I'm involved with swisscleantech, because this association represents sustainably oriented companies in politics."