World Environment Day was celebrated recently on 5th June amidst much fanfare with the usual pledges by governments and corporate firms. Usual buzz words in the business and economic space, like climate change, global warming, greenhouse emissions, net-zero carbon, etc. were extensively discussed.
However, at the
ground level, the magnitude of the climate change problem has reached huge
proportions as exemplified by the heatwave across many countries, including in my
own country India. Heatwaves have led to various destructive patterns like
destruction of crops, scarcity of water, etc. The intense heatwave across India
has led to such a huge surge in power demand, that the government has been
forced to import additional coal to meet the demand!
Food scarcity
already exacerbated by the Ukraine war has been further intensified with the
heatwaves severely affecting food crop yields across the world. India, one of
the world’s largest wheat producers, has been forced to ban wheat exports as
crop yields have been affected due to the recent heat wave.
Green activists
are having a field day now with their targets being mainly governments and
corporates. Business firms globally, are under scrutiny and pressure from
critical stakeholders like government agencies, financiers, and the public to focus
on reducing their “Carbon Footprint” or in other words focus on their “GREEN
EBIDTA”. Undoubtedly, corporates and governments have a large role to play in
this endeavor. Top global firms like BP, Shell, etc. have taken a pledge to
move to zero carbon emissions by 2040.
However, in
this fight against climate change, it's time to target the segment which is most affected
and whose consumption and behavioral patterns play a key role in the actions of
corporates and governments – people like you and me – consumers, mass public-
who pay the taxes finally !! After all, if we all demand carbon-free goods,
corporates will take heed. If we vote for public leaders who are serious about
climate change, then we can get the right policies being implemented. If we buy
shares, despite paying a premium, of firms that are serious about
sustainability then publicly traded firms will be forced to pay attention. Fossil
fuel companies like BP, Shell, Exxon, etc. were forced to modify their business
strategies as they feared a backlash from the investors’ community as well as
damage to their brand image.
Consumers, however,
can also play a major role, in this fight by paying heed to their personal
lifestyles also and the carbon footprint left by their consumption patterns. It’s
time that the public also starts measuring their “Carbon Footprint” and make their lifestyles “Greener”!!!
An interesting article was published, in Economic Times, on the same topic by Arijit Burman titled “Is your Is your EBITDA black, grey, blue or green?”. In this article, the author emphasizes the need for the public to pay heed to their consumption patterns and throws perspectives at the carbon footprints left behind by our day-to-day consumption patterns.
The recent World Economic Forum at Davos had climate change as one of the major topics of discussion. An article on the World Economic Forum platform published by Maciej Kolaczkowski titled “What can consumers do to help solve the climate change crisis” states some interesting facts-
- Consumers are responsible for 60-70% of global emissions. After all, consumption by consumers will lead to corporates making products leaving a carbon footprint!
- Majority of the household carbon footprint comes from transportation, housing, and food choices.
- High-income households naturally consume more and hence higher carbon footprint. More money you have, more is your luxury consumption as compared to your basic needs consumption.
- Luxury consumption, as reflected by increased demand for goods and services, leads to a higher carbon footprint.
- Education plays a vital role in optimizing the carbon footprint of households. Probably many people are still unaware of the trails of their consumption patterns and need to be shown a mirror of their actions.
What can consumers and mass public do to control the increased carbon footprint?
Like corporates, consumers too will have to take
carbon footprint reduction targets and modify their lifestyles. Some major
areas can be:
Use public transport systems: Globally most of the major cities have very efficient public transport systems like London, Singapore, New Delhi, etc. Local authorities want people to travel more by public transport systems and lesser by private vehicles as it achieves the double purpose of a lesser carbon footprint as well as reducing pressure on the roads. In Singapore, due to high local taxes, it is very expensive to own a private vehicle, and hence people prefer to use the public transport system. In fact, I ‘am personally looking forward to the full-fledged rollout of the metro system in my city of Mumbai!
Reduce luxury spending and consumption: This recommendation may sound odd given that it looks to be against the capitalist theories especially as the world is facing recessionary trends. Today if people spend as per their needs its sustainable, however an excess of spending above basic needs leads to additional consumption which in turn leads to additional usage of natural resources.
Clothing usage patterns are an interesting example. Fashion trends keep on changing and consumers are inclined to buy more in keeping up with the trends. The additional spending however lies unutilized after some time but has left behind a carbon footprint that is irreversible.
An interesting graphic I saw recently in the Times of India, indicates that having a well-defined wardrobe means reducing new clothes purchases by 75%! Having a sustainable wardrobe means ditching fast fashion, embracing slow fashion, and importantly being a part of a clothes exchange ecosystem.
The global problem of climate change that we are
facing needs to be addressed on a war footing, as the world did with the Covid
pandemic. Today corporates have started reporting the share of their earnings
that is from sustainable resources- “Green EBIDTA”.
Consumers like you and I also need to shoulder
responsibility and play our part and not leave the fight only to governments
and corporates. Hence it's time that everyone like you and me measure our “Personal
Green EBIDTA”!
Invite critical views !!
References:
1) “Is your Is your EBITDA black, grey, blue or green?”
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