How to overcome ESG challenges on the path to net zero?

The journey to Net Zero emissions demands a paradigm shift where profit and sustainability are allies, not adversaries

In today’s era marked by environmental awareness and a huge sense of responsibility, corporations worldwide confront a crucial challenge ̶ finding an equilibrium between business growth and sustainability objectives. However, within the journey toward achieving Net Zero emissions, lies a promising way forward: that the two goals can co-exist. This necessitates a company to develop a robust Environmental, Social, and Governance (ESG) framework driven by innovation and resolute corporate commitment that will offer it a competitive advantage and increase employee and customer loyalty.  

The sustainability paradox 

No discussion on ESG is complete without addressing the larger paradox between economic development and sustainability consideration. The paradox is not about development vs. climate change; it is about allocating resources fairly between low contributors to climate change and addressing the sustainability commitments of major contributors. A crucial factor is capital allocation – directing resources to drive this transformation. Businesses respond to consumer demands and adapt to ensure their offerings resonate. Profit takes a backseat to survival as the primary goal. Once survival is assured, alignment toward sustainability follows. 

Balancing sustainability costs and benefits 

In the realm of environmental responsibility, companies grapple with the challenge of integrating sustainable practices across the value chain without inflating operational costs. These practices encompass reducing carbon footprints, sustainable sourcing, waste minimization, and responsible resource management. 

Considering fossil fuels already constitute nearly 80% of global energy consumption hence while transitioning to green energy, businesses must incorporate these factors from the planning stage, aligning outcomes with evolving demands and opportunities. 

Market disruptions and changing consumer values: Prioritising sustainability

Market upheavals and climate change concerns prompt consumers to reevaluate values and lifestyles. Individuals are increasingly mindful of environmental impacts, from product purchases to lifestyle choices.  

While governments, regulators, and companies play roles in steering the world toward sustainability, consumer demand remains the driving force for change. The rapid growth of electric cars exemplifies this. In 2022, global electric car sales exceeded 10 million, with electric vehicles accounting for 14% of new car purchases. A small portion of this growth is attributed to government incentives, the rest from consumer demand. 

Companies must embrace a new approach, placing consumers at the center of change and involving them in planning sustainable systems. Governments prioritize climate-conscious policies; however, the industry’s responsibility lies in execution through partnerships with governments, civil society, and citizens. 

Sustainable Innovation as a Driver 

To navigate the ESG landscape effectively, companies must adopt sustainable innovation. This involves creating products and processes that fulfil profit objectives while aligning with environmental and social responsibilities. A shift from gradualism to a bold approach rooted in sustainability and innovation is essential. 

At UFlex, for example, we recognize that the real issue with the global flow of polymers that are spit. We recognize that the real issue with the global flow of polymers that are spit out by large-scale manufacturers is that waste collection and sorting systems are underdeveloped.  This leads to the inevitable scenario where some plastic waste will end up on the curbs of city streets, parks, and mountain reserves, and as marine waste.

Jeevaraj Pillai
Chief Sustainability Officer
UFLex Limited

One way to change this is by changing human habits and behaviors, but that is an insurmountable task. Thus, we went in the opposite direction to solve this flow issue through source reduction, source substitution, and biodegradability. We made our solution human-proof: The world’s first fully biodegradable laminate that converts into biomass upon degradation. 

The Way Forward: Profit and Sustainability as Allies 

The journey to Net Zero emissions demands a paradigm shift where profit and sustainability are allies, not adversaries. By leveraging consumer demand, embracing rapid innovation, and fostering partnerships, industries can overcome challenges and pave the way to a sustainable future. This reshapes the narrative, affirming that sustainability and profitability can coexist on the path to a greener, more prosperous world. 

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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