Creating an Environmentally Friendly Business
January 17th, 2024
By Paul Hadden
A green business prioritises sustainability and conservation in its business model. They focus on positively impacting the environment and their communities. Here we explore how T&T companies are responding to these global advancements.
How can T&T companies create an environmentally friendly business?
Businesses should examine what they are selling, how they are packaging their product, and what becomes of both product and packaging following use and completion of the product life cycle. Companies must also look more closely at their operational inefficiencies, carbon footprint, waste streams and where raw materials are sourced. The trend emerging on this front is ESG (Environmental, Social and Governance). This will make environmental sustainability a key parameter in how a business operates, including access to funding and borrowing, investment and ‘investability’, and access to international and local markets.
Should businesses increase use of renewable energy sources?
Due to having natural gas reserves in T&T, we have relatively low electricity prices, which does not incentivise the business community to convert to renewable energy sources. A shift to renewables will result in cleaner energy and a lower carbon footprint, and our limited natural gas resources could then be used for higher value outputs such as the downstream industry.
Are companies investing in sustainability policies?
It can be argued that companies with sustainability policies are more successful. These policies enable a company to identify areas of inefficiency and generally operate a better business model. However, ensuring that the policy is operationalised and implemented is important. Sustainability will soon become a key criterion in obtaining business, particularly with multinational companies here and abroad.
How important is ESG?
ESG is a global initiative that affects every aspect of running a business, from one’s ability to import and sell products to borrowing and lending money. ESG has enabled sustainability metrics to be measured in a comprehensive manner, even more so with the advent of the International Sustainability Standards Board (ISSB), which incorporates sustainability and environmental performance into financial reporting. This will be a game-changer in the environmental field. Everything will need to comply with ESG parameters and metrics. It is a global measure, and companies will not be able to operate if found to be non-compliant. However, for ESG to work, it must become a living, breathing practice of companies and not a ‘checkbox’.
What does the future hold?
T&T businesses need to be not only financially viable but financially viable in a responsible manner. In the future, this will not be optional, and a firm’s environmental responsibility will determine its financial viability. The age of ‘profit at any cost’ was the thinking of the 1980s, and unlike the music, it should not be made fashionable ever again.