How entrepreneurs can be driving force against climate change

Sri Lanka is also identified by the World Bank as a hotspot meaning changes in the average weather affect living standards negatively 

– Pic by Shehan Gunasekara 

With COP26 coinciding with the global entrepreneurship week, focusing on the abilities of entrepreneurs to fight climate change is a timely topic. Entrepreneurs have been a key cause of global warming over the centuries as entrepreneurs initiated and drove industries emitting carbon starting with the industrial revolution. 

Entrepreneurs like John D Rockefeller and Henry Ford brought enormous positive change to the world and improved the lives of many but the industries they pioneered are still causing major pollution. I believe that entrepreneurs can and should be the main players in fighting climate change and making the world more sustainable environmentally. 

Effects of climate change

Sea level will rise by 216 feet if all the ice at the poles and mountaintops melt, which is enough to submerge 15 floors in a building. The long term effects of climate change are high with the World Bank estimating that annual climate adaptation costs could be between $70 billion to $100 billion. Sri Lanka is also identified by the World Bank as a hotspot meaning changes in average weather affect living standards negatively. 

Why should entrepreneurs be a force against climate change?

There are many reasons for entrepreneurs to become environmentally sustainable. With millennials and Gen Z preferring to buy from and work for companies which embrace sustainability, consumer demands are changing and entrepreneurs are well placed to take advantage of this. Not only consumers but also 75% of investment firm executives also think sustainability performance should be considered when deciding on investing. 

Being environmentally sustainable will help keep costs down in the long term with government policies globally predicted to be more favourable to companies emitting less carbon. According to BCG, companies that embed sustainability in their governance and business models have a lasting competitive advantage. 

How entrepreneurs can turn the tide against climate change

Driving innovation: Startups are naturally the best places for innovation to come up as they have an open culture and are receptive to ideas. Larger corporations and government institutions can be bureaucratic to take on innovation as fast as a startup. Entrepreneurs are bringing in innovative ideas which are helping fight climate change in many ways from electric cars to bike sharing to lab meat and plant based meat. Bowery Farming which is a Google backed vertical farming firm is producing using 95% less water than traditional agriculture. Entrepreneurs also bring ideas into reality.

Meeting consumer demand: There is a rising demand from consumers for environmentally sustainable products with more than 70% of consumers even willing to spend more to go green. Entrepreneurs are needed to fulfil this demand and a lack of supply can mean the consumers will not have the environmentally sustainable products to purchase. Entrepreneurs can also influence other businesses to become less carbon intensive by demanding their supply chains to move towards carbon neutrality. A good example of a business making this change is Apple which has made a commitment that its entire supply chain will be carbon neutral by 2030. This will force many businesses in Apple’s supply chain to also become carbon neutral.

Transforming lifestyles: Entrepreneurs can change lifestyles of millions of people. It was the American entrepreneur Henry Ford who made combustion engine cars a part of our lifestyle. It has taken another entrepreneur Elon Musk to gear the auto industry away from the combustion engine towards electric cars. If Elon Musk had not made electric cars more mainstream, the world today would not have a strong alternative to cars run on fossil fuels and no amount of Government policies could have helped. 

(Talal Rafi is a global consultant on innovation, entrepreneurship and gender equality. He is a member of the Expert Network of the World Economic Forum and serves on the Global Entrepreneurship Network Sri Lanka Board. His work has been published by the World Bank, International Monetary Fund, Asian Development Bank, World Economic Forum, London School of Economic, University College London & Forbes.)