Sustainability is a more urgent concern than ever, as we are seeing the effects of climate change happening more frequently. As a society, a lot of our environmental impact relates to commerce, so it’s only natural that any meaningful approach to sustainability is through a green economy.
To understand where we’re going, we first must understand where we’ve been. Currently, our economies have evolved to incentivise overconsumption and pollute our natural environment. To solve these problems, growth in prosperity should be driven by infrastructure and economic activities that encourage development without degrading the environment. These are the basic tenets of a green economy.
This new economic model for our planet will transform the way both businesses and consumers behave. To get to a green economy, there has to be new practices put in place.
Pillars of a green economy
The goal of a green economy is economic growth through sustainable development. In turn, it benefits society through a greener planet and the creation of jobs. Here are some major ways to achieve a green economy:
Develop Clean Energy
There are plenty of alternatives to fossil fuels when it comes to generating energy. The challenge in the case of solar, however, is that a cleaner energy grid also needs to account for when the sun doesn’t shine (like at night). Unlike on-demand power from burning fossil fuel, on a clean energy grid there’s either a deficit or a surplus. The good news is there’s many possible, innovative solutions. For instance, Finland has “sand batteries,” a low-cost energy storage solution to store heat in the winter and help balance energy demands.
Another innovative storage system is Carbon Capture & Storage (CCS), which can capture and compress carbon at its source before it can harm the atmosphere. It’s then either converted into another product like fuel, or moved into permanent storage. If done at scale, the cost of converting captured carbon into synthetic fuel could drop from its current US$600/ton of carbon to less than US$100/ton.
To encourage more investment in clean energy, some governments have implemented the feed-in tariff (FIT). This policy promotes investment in renewable energy sources by providing a guaranteed, above-market price for producers over long-term contracts (ie. 15 to 20 years). FITs are common around the world, most notably in the US, Germany, and Japan, as well as developing countries like Kenya.
Another way to ensure the development of more green energy resources is through impact investment. It’s investment with the intention of generating positive social and environmental impact alongside a financial return. This textbook definition of a win-win makes impact investing a great choice for future business leaders. If you want to make a big impact this way, there are careers related to finance (ie. green fund manager) with a focus on sustainability.
Business schools like ESSEC are well-positioned to groom future business leaders to address climate change and other environmental challenges. Students in the Global Bachelor of Business Administration (Global BBA) program tackle courses like Responsible Leadership, which explores the environmental impacts of companies, with concepts like the Triple Bottom Line (people, planet, profits) where profit can happen by investing in human capital and lower-emissions manufacturing. At the graduate level, their Msc in Sustainability Transformation teaches students to develop investment strategies by harnessing a practical understanding of the environmental, social, and governance (ESG) ecosystem.
Create Local Economies
“Buying local” is fast becoming a popular environmental movement because it makes the supply chain much shorter, thus consuming less fossil fuels. It also creates local job opportunities. Plus, buying locally can help address major global issues like food insecurity, such as through urban and vertical farming. This allows us to utilise unused spaces in cities, like rooftops, which experts say could help us meet between 10-20% of the world’s future food needs.
Out of 582 million entrepreneurs globally, there’s a growing movement of social entrepreneurs dedicated to their local communities. Social entrepreneurs can promote a range of solutions for sustainable development through non-profit, for-profit, and hybrid enterprises. Whether it’s projects like urban farming in developed countries or providing education in developing ones, social entrepreneurs are in a good position to make a positive impact.
A great example is Barefoot College, which started in 1972 in India as a college for the rural poor. It teaches women (who tend to stay in their villages, compared to men who would seek opportunities in big cities) to build and maintain solar electricity systems for their villages. Barefoot’s graduates, known as Solar Mamas, have since solar-electrified thousands of villages, eliminating the need for kerosene and candles. The savings allows the villages to create for-profit social enterprises, the profits of which can be reinvested into their own communities. Their successful social enterprise model is now running in nearly 100 countries.
Making an impact with social entrepreneurship requires the tools and knowledge to start and run a successful business. To begin your journey, you can enrol in a business school like ESSEC, which has a strong commitment to social and environmental concerns. For starters, all incoming students for the Global BBA program will have compulsory education on climate issues, taught through both lectures and hands-on group projects.
Circular economy
To truly be a green economy, it must also be strongly linked with the circular economy. It’s a model of production and consumption which involves recycling and reusing materials and products for as long as possible. More than merely recycling, if we get the circular economy right, it could reduce global CO2 emissions by 45%. This ecosystem also creates jobs and generates economic activity, while easing some environmental pressures.
Global brands are starting to embrace the circular economy in inventive ways. For example, Burger King is trialling reusable packaging in the UK together with Loop, a reusable packaging programme. Customers pay a small deposit for the containers, and get their deposits back when they return them to a Loop recycling bin.
Another example is Adidas’ UltraBoost DNA Loop shoes. They’re made from one material – 100% recyclable thermoplastic polyurethane (TPU) – using high heat. They call it a sneaker that is “Made to be Remade”. Once you’re done with them, you return them to Adidas to be reborn into another generation of sneakers.
As more and more companies look to adopt closed-loop business models, we’re seeing a new type of CEO: the Chief Circular Economy Officer. The key to this role is understanding material flow in both directions. Unsurprisingly, this role favours someone with supply chain management expertise. A CCEO should also be able to tap into different skill sets, from procurement and compliance to product innovation and insurance/risk expertise.
These are all the basics of a business education, with many schools rising to meet the challenges of a circular economy. At the graduate level, ESSEC’s new Global Circle Economy Chair aims to train future Chief Circular Economy Officers to implement practical solutions to environmental challenges. Their Global BBA students learn concepts like Stakeholder Theory, which explores how organisational management aligns with business ethics and corporate policies that directly impact employees, suppliers, local communities, and the entire planet.
Responsible Consumption & Production
Surveys prove that consumers are willing to pay a premium for greener products, and businesses want to earn that premium. However, more often than not, sustainable goods are many times more expensive than mass-market products. Just head to the organic aisle in any grocery store, and you’ll easily pay double what you’d normally pay for bread, tomatoes or cereal.
Studies show that many consumers are willing to pay anything from 10-30% more for a sustainability markup, but the real cost of going green is a grey area. Yet, eco-friendly products still fly off the shelves. The secret?
The green marketer. The emergence of eco-conscious consumers who are increasingly concerned with environmental and social factors has led to green marketing becoming a paramount component of corporate public relations. This sounds great, but it’s also a double-edged sword. Brands that offer unsubstantiated claims of being “green” can damage their reputation. In fact, this phenomenon has become so common that there’s even a portmanteau for it: greenwashing. The textbook example of which happened in 2015 when Volkswagen admitted to cheating during an emissions test.
Therefore, marketing green products isn’t as simple as slapping a “100% recyclable” sticker on something. That’s because truly impactful green marketing requires a delicate balancing act; one that requires in-depth consumer education and knowledge of sustainable practices.
Aspiring green marketers can enrol in business programs with a focus on sustainability, like ESSEC’s Global BBA program which prepares students to take on the unique challenges of this in-demand role. Its curriculum teaches traditional business principles like supply chain management and economics, in parallel with climate studies and ethics.
Becoming a Part of the Green Economy
While traditional economic growth is measured by numbers, a green economy goes beyond; it measures growth in terms of the health of its people and the planet. You simply can’t put a price on that.
Innovations in green technology are happening at a staggering pace. However, what’s truly exciting is that it’ll be up to the business leaders of tomorrow to actually turn that into a real, green economy. This means that our collective, sustainable future won’t just be shaped by scientists and engineers. We’ll need skilled green investors, economists, managers, and marketers to make it all happen. And a fundamental business education has never been more essential to power this social change.
Whether you plan to be a social entrepreneur, green marketer or impact investor, ESSEC’s Global BBA program can provide you with a solid business foundation to cement your role within the green economy. With campuses in Singapore, France, and Morocco, you have the opportunity to learn from global leaders both in and out of the classroom. Check out ESSEC’s website for more details on the program, which is ranked #1 BBA in France by Le Point (2021), L’Etudiant (2021), Parcoursup (2021) and Challenges (2022).
