Founder at Sesame Associates | World Bank GYCN Ambassador on Climate Change & nominated as a Young Global Leader by the World Economic Forum
Entrepreneurs have been one of the main causes of global warming for centuries. The industrial revolutions, which have caused carbon emissions throughout the last few centuries, were driven by entrepreneurs such as John D. Rockefeller and Henry Ford, who transformed millions of lives for the better but also pioneered industries that became driving forces behind climate change.
If entrepreneurs can transform industries for the worse of the environment, they can and should be the ones to fight climate change.
The Threat Of Climate Change
The harm caused by climate change due to high emissions greatly outweighs the profits gained through high emissions. The biggest challenge for climate activists is that many people do not see climate change as a serious threat or see it as a far-off event. If all the ice at the poles and on mountaintops were to melt, the sea level would rise by 216 feet (subscription required). This is enough to submerge 15 floors of a building.
As global warming increases, the harder it gets to reverse it (subscription required). There is an urgent need for the world to act immediately.
Why Entrepreneurs Should Fight Climate Change
An entrepreneur myself, as well as a World Bank Ambassador on climate change, I feel strongly about our role in the fight against climate change.
Of consumers who list sustainability as an important factor, 70% would pay a premium of about 35% on brands that embrace environmentally responsible practices. The Boston Consulting Group suggests that companies that embed sustainability into their business models and governance will have a lasting competitive advantage.
A sustainability strategy can bring down costs, decrease risks and improve overall financial performance (subscription required). The ability to tap into new markets and expand into existing markets is boosted when the company has a strong sustainability proposition.
Lastly, entrepreneurs can often attract more investment because 75% of investment firm executives think sustainability performance should be considered when making investment decisions. Global sustainability investments are now over $30 trillion.
With the benefits in mind, here are a few ways entrepreneurs can turn the tide against climate change:
Bring ideas into practice. Governments cannot alone take on the challenge of fighting climate change as their ability is restricted. Governments can bring in stricter regulations and introduce incentives in regard to environmental sustainability, but if businesses cooperate, it can make mitigating climate change much easier. Solar energy, wind power, electric cars, remote working tools and technologies to reduce emissions are present, and it is entrepreneurs who can bring these into reality.
Bring innovation to the fight against climate change. Startups are best positioned to innovate because they are smaller and have an open culture, unlike governments and large corporations, which require time to approve new initiatives. Entrepreneurs are already bringing a lot of innovation to climate action. Electric cars and the expansion of car and bike-sharing programs account for one area. Companies like Impossible Foods and Mosa Meat have brought innovation to the food sector through plant-based meat and lab-grown meat, respectively. The Google-backed vertical farming firm Bowery Farming is reportedly able to use 95% less water than traditional agriculture.
Fulfill consumer demands. There is increasing consumer demand for environmentally sustainable products, which I believe will continue into the future. According to Nielsen, 81% of global consumers strongly feel businesses should help improve the environment. Startups and entrepreneurs can tap into and even encourage the growth of this market by shifting to sustainably focused operations and products.
Create a demand for sustainability. Entrepreneurs are in a good position to demand sustainability from others. They can demand their supply chain to change. Apple has made a commitment, stating its products and its supply chain will become 100% carbon neutral by 2030. This is likely to force competition among the businesses in Apple’s supply chain to become more environmentally sustainable. If entrepreneurs and large corporations do this, they can have an impact on the fight against climate change.
Change habits and cultures. I believe entrepreneurs are in a position to change habits and cultural thinking. Henry Ford was the driving force behind cars with combustion engines. It took another entrepreneur, Elon Musk, to steer the automobile industry away from the combustion engine. At the time when Elon Musk co-founded Tesla, the electric car was not taken seriously. It was an uphill battle against established auto manufacturers. Today, Tesla not only has a bigger market capitalization than any other auto manufacturer, but it has also caused a revolution in the auto industry. Even the tech giant Apple is considering moving into the electric vehicle industry.
Why Entrepreneurs Are Needed To Mitigate Climate Change
Entrepreneurs can be a powerful force against climate change. They can do this by bringing ideas into practice, introducing innovation, fulfilling consumer demand, creating demand for sustainability, and changing habits and cultures. If entrepreneurs cannot do this, there are few others who can.
Talal Rafi is a World Bank Ambassador (GYCN) on climate change. The opinions expressed solely represent this position.
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