As environmental challenges intensify, companies find themselves at a crossroads between financial pressures and the urgent need for sustainability.
According to a global study of 5,000 CEOs by IBM, business leaders struggle to fund their sustainability efforts, with six in 10 admitting they make trade-offs between financial and sustainability results. In the UK specifically, only four in 10 leaders feel motivated to act on their sustainability promises, while 28% report difficulty building the business case for environmental projects, according to SAP research.
That is not to say that these challenges make sustainability efforts useless. As new technologies offer cost-effective solutions for green initiatives and consumer trends are shifting toward green products and services, there are strong incentives for companies to adapt and innovate.
Below are some key ideas and actions that will drive the shift towards sustainable practices in the UK in 2024.
Renewable energy
Renewable energy sources such as wind, solar and hydroelectricity are playing an increasingly central role in the UK's energy production. According to the UK government, in 2022, renewable energy accounted for 43% of the country's electricity generation, and the government has committed to increasing offshore wind capacity to 40 GW by 2030.
For businesses, this shift means opportunities to invest in renewable energy projects and clean energy sources that could deliver cost savings over time. Ben Fielden, CEO of cleantech startup Sunswap, believes mobile energy storage (or “batteries on wheels,” as he calls it) can play a key role here, particularly in industries such as logistics.
“Leveraging wheeled battery trailers not only reduces emissions but also improves operational flexibility and resilience,” Fielden said. “It is a promising avenue for companies seeking to meet sustainability goals while improving efficiency.
“It's exciting for an industry like logistics because margins are everything, so if you can convert trailers into renewable battery sources, it opens up possibilities for operators to adopt the technology.”
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Green Fuel Pledge
While demand for green and renewable energy sources in the UK is growing, cost remains a factor preventing wider adoption.
Andrew Symes is a climate technology scientist and CEO of OXCCU, an Oxford University spin-out exploring sustainable aviation fuels. He says technology plays a key role in reducing these costs, with £53 million ($68 million) in funding for SAF from the UK government in 2023 creating a new push for innovation.
“Green electricity prices and the affordability of low-cost, reliable electrolyzers greatly influence the cost of green hydrogen,” Symes said. “However, as the industry grows, both costs are decreasing.
“The key to expanding SAF is cost, and this is where new technologies play a crucial role in sustainable energy growth to drive air travel in the future.”
Carbon neutrality
Achieving carbon neutrality is a goal for many UK businesses, driven by both regulatory requirements and consumer demand for sustainable practices. Companies are adopting a range of strategies to reduce carbon emissions, from energy efficiency improvements and carbon offsetting to sustainable supply chain practices and green product innovation.
The UK government's commitment to achieving net zero emissions by 2050 has galvanized businesses into action, with many setting their own carbon neutrality targets.
Technological innovation brings environmental costs
However, Hilary Stephenson, managing director of design and development company Nexer Digital, says business leaders must fully understand their carbon footprint before they can set effective strategies to reduce it.
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“The digital industry currently accounts for around 4% of global emissions, surpassing that of the aviation industry…” Stephenson said. “Every choice we make has an impact on the environment, requiring action by businesses to make their digital footprint green.”
The growth of energy-intensive technologies such as blockchain and generative AI poses additional challenges for organizations trying to balance technological innovation with sustainability.
“The energy needed for AI and large language models can counteract positive environmental behaviors,” Stephenson said. “Companies should start by evaluating their digital infrastructure and identifying areas for improvement.
“Enterprises should also consider switching to cloud-native technologies if they have not already done so, as all major cloud providers have committed to net zero and water positivity.”
Recycling and waste management.
The Food Waste Reduction Roadmap, initiated by the Global Development Initiative and the Waste and Resources Action Programme, has been instrumental in getting producers to commit to halving food waste for 2030.
Meanwhile, the Plastic Packaging Tax, introduced in April 2022, imposes a tax on plastic packaging with less than 30% recycled content, incentivizing companies to use recycled materials and design products that are ultimately recyclable. of its useful life. Many companies are motivated to act by the upcoming ban on single-use plastics in Europe.
“With the EU set to introduce new rules aimed at reducing packaging pollution, focusing on ensuring all packaging is recyclable by 2035, this trend is partly driven by the need to comply with regulations,” said Laura Grant, marketing manager at eco packaging company, BlueSky Solutions. “However, it is also being driven by consumers themselves, who are increasingly aware of the environmental impact of packaging and support companies that commit to taking action to improve sustainability.”
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Sustainable companies gain customers
In fact, sustainability is increasingly a key factor in consumer decision-making: 2023 research by Elopak found that 75% of UK consumers consider companies' environmental commitments when making purchasing decisions. buys.
Sian Sutherland, co-founder of sustainability campaign group A Plastic Planet, says this requires both a change in the infrastructure and technology used in the supply chain and in mindset to adapt to consumer preferences.
“The data on this topic says it all: 60% of shoppers would like to switch to brands that use returnable packaging instead of single-use packaging,” Sutherland said. “Turning a blind eye would be nothing short of foolish for any company, given the benefits to both its bottom line and the environment.”
Business leadership and ESG objectives
For business leaders, understanding and integrating environmental, social and governance (ESG) objectives is key to balancing sustainability with digital transformation. And, as eco-conscious consumers subject companies to closer scrutiny, business leaders can no longer overlook sustainability goals.
“Companies that are able to foster a sustainability mindset not only align with global ethical standards but also improve resilience in the face of changing market demands,” said Paul Warburton, digital and marketing director at the services firm NSC Global professionals.
“Companies must establish robust sustainability criteria that should include defining clear objectives for environmental, social and economic impact and implementing monitoring and reporting mechanisms. This allows companies to ensure accountability and track and communicate their progress transparently.”
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Establish sustainability roles in SMEs
For some, however, this may be easier said than done, particularly as resource limitations can hinder organizations' ability to implement effective ESG initiatives.
“Small and medium-sized businesses may face challenges meeting sustainability expectations, which could create a gap between smaller and larger suppliers,” says Stephenson.
“To address this gap, SMEs should establish specific roles and processes dedicated to sustainability, ensuring they can meet the same standards as their larger counterparts.”
