A holistic approach involving a complete paradigm shift in green entrepreneurship is perhaps the best coping mechanism to address the man-made climate crisis.
In recent years, we have been working to embrace the idea of ”going green” in all aspects of our lives, be it entrepreneurship, policy advocacy or lifestyles around the world. But it is still in its infancy.
The frequency of environmental disasters (biodiversity loss, water crises, flash floods, forest fires, droughts, etc.) is high around the world, regardless of geographic location or national income.
The majority of companies contribute significantly to global warming through greenhouse gas (GHG) emissions in key sectors such as transportation, manufacturing, energy, construction, etc. Hence, companies need to think outside the box and transform their traditional entrepreneurial design activities into innovative green components.
To make matters worse, the pandemic and frightening updates about the presence of nanoplastics in the human body have left many of us traumatized and causing us to rethink our collective human behavior in pursuit of rapid business growth and the destructive weather events that are its by-product.
The extent of these adversities is so intense that they affect our physiological and mental health. Recent studies have also highlighted concerns regarding the psychological trauma, stress, and fear of uncertainty among Gen Z due to frequent natural disasters.
When it comes to business, they often follow economic rather than social interests and aim for windfall profits as the main objective in carrying out their entrepreneurial activities. Large-scale extraction of minerals, metals and fossil fuels is caused by business activities. This contributes significantly to environmental degradation and resource depletion.
Research shows that throughout this process, the extraction of natural resources has increased significantly and is expected to increase further in the future. The United Nations Environment Programme (UNEP) found that the consumer goods sector is one of the major sources of waste, especially due to the use of non-recyclable packaging, which has an additional negative impact.
The production and disposal of packaging materials by companies contributes significantly to global waste and contributes to the balance of ecosystems close to survival.
There is no denying that poor entrepreneurial strategies, oversupply mentality, and associated willful ignorance over the past few decades are to blame.
Moreover, apart from the demand side, i.e. the modern consumer, their contribution to the environmental crisis is generally invisible and little discussed. Rapid economic growth has brought about a prosperity of incomes, and e-commerce platforms have given the status-conscious modern consumer ample clout to purchase smart modern newspapers, consumer durables, a variety of storable food products, and so on.
Ironically, consumers lead busy lives that rarely analyze their consumption habits, creating waste every day from excessive purchases. Yet, globally, the average person produces around 0.74 kilograms of waste.
According to data from the World Bank and the United Nations Environment Programme, high-income countries generate around 34% of the world’s waste, or about 1.2 kilograms per person per day, while low-income countries generate significantly less, equivalent to around 0.55 kilograms per person per day.
Ultimately, this will put a lot of pressure on local governments responsible for waste collection and disposal, forcing them to explore efficient strategies and new landfill sites. According to the World Waste Management Outlook 2024, municipal solid waste generation is projected to increase from 2.1 billion tonnes in 2023 to 3.8 billion tonnes by 2050.
The lack of responsible consumerism is widely visible, including proper waste sorting and disposal, a willingness to recycle and upcycle, and a willingness to learn environmentally conscious consumer behaviour.We often focus on the supply chain and the sustainable practices associated with it.
In the current climate, it is crucial to develop a sustainable demand side chain, from the initial desire or need for a commodity to its disposal once it reaches the end user. It is also clear that companies and regulators are ignorant about the demand side and have little interest in the strategies and efforts required for education and awareness campaigns.
This missing link can be effectively identified and incorporated in restructuring the sustainability aspects of the supply chain under green entrepreneurship practices. Further efforts on the demand side will certainly help in achieving the goals of circular economy principles.
Frequent environmental disasters and related incidents are indicative of market failures that Adam Smith’s invisible hand cannot fix. Negative externalities have a systemic impact on everyone, regardless of their direct involvement or contribution to the production process.
Regulators must therefore show swift action to formulate stringent regulations to ensure that existing and new businesses adhere to green entrepreneurial practices as a national priority. Companies should be compelled to make their policies transparent and fully green by incorporating a social benefit component.
And throughout the process, social good goals can be addressed, which might include the sustainable use of local resources, the pursuit of energy efficiency, fair pricing, recyclable or reusable packaging, reducing the carbon print, ethical practices, inclusivity, and more.
The European Union is moving towards imposing a plastics tax where applicable in each country, and plans to introduce recycling and reuse options, long life cycles and repairability for all packaging by 2023.
Above all, revolutionary changes in the design foundations of new-age entrepreneurship are foreseeable, which may aid in the green entrepreneurship journey of companies.
We are not disappointed. There are signs of positive change as eco-friendly products and services are gaining popularity among certain consumer segments, and some companies are moving closer to becoming greener, but only a few are taking on the role of green business ambassadors globally.
Large corporations like Nestlé, Danone, Henkel, Adidas, Patagonia, and Beyond Meat have pledged to step forward into the future, but they are not effective in creating sustainable green business practices and creating a ripple effect for small and medium-sized enterprises.
Surprisingly, there is growing evidence that SMEs are playing a leading role in producing environmentally friendly products and generating green energy. General guidelines on green entrepreneurship, concept explanations, strategy and financial provisions, and other related support would be particularly beneficial for SMEs, helping to create a level playing field as larger companies dominate the market.
New technologies, digital tools and media can be game changers in spreading knowledge campaigns on green entrepreneurship and responsible consumerism to promote healthy habits. This is an integrated step by consumers, businesses and the economy that can transform entire structures aiming to reduce the negative impact on the environment.
Pinki Shah is a former Professor of Business Administration at University of Liberal Arts, Bangladesh (ULAB). She is a Currency Mentor (Volunteer) at ONE Hub & CCI, Ottawa, Canada.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of The Business Standard.
