Many are wondering who might replace the US as global leaders in the fight against climate change and sustainable practices within business. The real question, though, is do people care enough to keep the movement going?
Though it might surprise you, there’s evidence that China could be the key to Australia’s own progress within green industries. Though they are currently the largest emitter of greenhouse gases in the world – having surpassed the US in 2006 – China in fact stands apart in their dual strategy of using government policy and market innovation to ensure the development of a greener economy and more sustainable practices.
As of 2015, China has committed to cutting its emissions per unit of GDP by 60 to 65 per cent from 2005 levels. They also have plans to increase its installed capacity in wind power and solar power by double. It will also increase its use of natural gas, which is expected to make up more than 10 per cent of its primary energy consumption by 2020.
Why? Because the nation, which experiences toxic levels of air pollution due to its coal-based energy sector, has recognised the need to not only diversify industry, but ensure that its economic growth develops sustainable practices into a post-industrial future.
“China’s effort to align its domestic growth agenda and global climate change agenda is a leading example of how a fundamental shift is needed to grow the economy differently,” says Changhua Wu, representative for China at the Climate Group.
It’s an approach that might not necessarily comply to global climate agreements, but it does speak to an inward-looking perspective that recognises the importance of public policy as a driver for free market innovation.
Another example of this is China’s Ministry of Environmental Protection’s (MEP) 2008 “Green Securities Scheme,” where companies in sectors including thermal power, steel, cement and aluminium require MEP approval before they can apply to the securities regulator to sell shares.
What can Australian companies do better to foster green industry?
A global report from 2014 says that 55 per cent of consumers across 60 countries are willing to pay higher prices for goods from environmentally conscious companies. And across the world, the key factors accelerating the global green business boom – changing consumer preferences, government regulation and environmental necessity – suggest industries across the spectrum need to take this crucial opportunity to diversify and innovate within the green space.
But how to translate good intentions into real innovation?
According to research body Future Business Council, Australian Government must continue to play a key role in growth across multiple industries – a factor that businesses can only influence so much. The good news, however, is that workforce innovation can have a significant impact on success.
Corporations known for their strong corporate social responsibility, including Westpac, BHP Billiton and Sydney Water, made the annual State of CSR in Australia and New Zealand Annual Review list because they placed an emphasis on involving stakeholders and customers in the process. It’s an approach that goes a long way to ensuring company’s sustainable practices resonate to the outside world too.
“We instituted clear mandatory standards, key performance indicators in the Group Management Committee, and personal scorecards for the businesses,” says Ian Wood, VP of Community Relations and Sustainability at BHP Billiton. “Everyone’s bonus is linked to health, safety, environmental and community performance.”
Though there’s validity in the suggestion that Australia’s mining boom has hindered policy that fosters sustainable practices, companies that are making their sustainability initiatives about innovation and future competitiveness have shown that framing their initiatives as long-term projects, and communicating that message to all stakeholders, can go a long way in the march towards sustainability.