I never thought that I would see this day. You can imagine my glee that finally things have started turning around. I am sure you must have heard it already. Poor families across the nation have now started refusing alms and food contained in plastic.
Families in shanties are preferring to rough it out with their children in the cold weather rather than burn any wood or combustible material that is bad for the environment.
Labourers in multiple garment sites are returning their daily wage to protest discharge of untreated water in the local sewers … Most interestingly, garment factory workers struck work, refusing to wear work pyjamas that did not have environmentally-friendly raw material … And many more such examples …
If you've not caught on yet, and before you squeal out in climate-controlled pleasure, let me blow the bubble for you. Clearly, none of what is written above is true (yes, absolutely none of the above).
If you have this gnawing feeling of being shattered and want to blame these classes mentioned above for not prioritising the environment over their daily, selfish survival objectives, let me share with you that that is the exact spin of an agenda that developed nations are pushing on the developing and least developed nations.
It's rudimentary common-sense that a family at the fringes of destitution, fighting for survival and wondering where their next meal would come from, would clearly not be cringing at environmentally unsustainable actions of people and corporations around.
If it's true for a household, then it's true at a national level. Why would nations, where a majority are below or just at par with the poverty line, place the environment over immediate existential issues?
There is a way, of course. If one can assure the lesser developed sections that their environmentally supportive actions would be financed and supported in all possible measures by the richer/developed sections of society, then there is positive reinforcement within these disadvantaged communities that the call to environmental action will not maim them.
Please don't get me wrong here. I, with all earnestness, espouse environmental actions. I am a fanatic supporter of sustainability, because I know how prioritization of sustainability can advantage nations and corporations. Let me throw some scholarly evidence at you for a few parameters:
- Financial performance: A number of studies have shown that companies with strong sustainability practices tend to perform better financially. For example, a 2018 study published in the journal Sustainability found that companies with high sustainability ratings outperformed those with lower ratings in terms of stock price and financial performance. This is due to a number of factors, including improved operational efficiency, reduced costs, and increased brand value.
- Market capitalization: Companies that prioritize sustainability can also see an increase in their market capitalization, as investors become increasingly interested in sustainable investing. A 2019 study published in the Journal of Banking & Finance found that companies with strong sustainability practices tended to have higher market valuations compared to those without.
- Customer loyalty: Customers are becoming increasingly aware of the environmental and social impact of their purchasing decisions. As a result, companies that prioritize sustainability are more likely to attract and retain customers who are looking to support environmentally and socially responsible businesses. A 2020 study published in the Journal of Business Ethics found that companies with strong sustainability practices tended to have higher levels of customer loyalty.
- Attracting better talent: Companies that prioritize sustainability are also more likely to attract and retain top talent. This is because employees are increasingly looking for employers who align with their personal values and care about environmental and social issues. A 2019 study published in the Harvard Business Review found that employees are more likely to stay with companies that prioritize sustainability.
- Supplier support: Companies that prioritize sustainability are also more likely to have the support of their suppliers. This is because suppliers are becoming increasingly aware of the importance of sustainability, and are looking to partner with companies that share their values. A 2018 study published in the Journal of Supply Chain Management found that companies with strong sustainability practices tended to have better relationships with their suppliers.
But none of this will happen in the lesser developed sections of the global society and no worker will burn his unsustainable pyjamas until the richer nations, cash rich companies, and more advantaged families step up their act and open their purses to support the have-nots.
COP27 was a giant leap in this regard, with some minimal financial commitments from the developed world but more needs to be done.
Many key developing and underdeveloped nations have a significant youth majority in their population, and have the most innovative ideas flowing out. But the developed nations have experience on their side and know what actions will have the most positive sustainability impact. They know when to pull the trigger.
Neither can do without the other -- which reminds me of a classic discourse between James Bond (our developed nations) and Q (Bond's handler, our LDCs), which goes like this:
Q: Age is no guarantee of efficiency.
James Bond: And youth is no guarantee of innovation.
Q: Well, I'll hazard I can do more damage on my laptop sitting in my pyjamas before my first cup of Earl Grey tea than you can do in a year in the field.
James Bond: Oh, so why do you need me?
Q: Every now and then a trigger has to be pulled.
James Bond: Or not pulled. It's hard to know which in your pyjamas.
Dr Sandeep Ananthanarayanan, alumnus of IIM Calcutta and University of Buckingham, is the Group Strategy Director of Best Holdings, teaches Strategic Management at North South University and takes M&A sessions at IBA. He is also the QMSC Board member at Bureau of Indian Standards, Government of India.