Eco-Problems: groundbreaking ways of doing business

 6 minute read

Climate change and insufficient waste management are critical ecological problems. Described issues prevent economic development on local and global levels. Even small investments can make the difference. Therefore, enterprises take actions creative problem-solving and focus on regional problems. There is $12 trillion in business opportunities for solving sustainability challenges. Is sustainability a basic requirement in the strategy of leadership or can the leadership be created by pushing ecological values ahead?

From waste
to gourmet mushrooms

In Vietnam, around 50 million tons of rice straw are burned every year. Due to constant air pollution of the area, local inhabitants have serious health issues and are not able to resolve them on time due to the lack of healthcare system and low incomes. Trang Tran, the social entrepreneur, perceived this situation as an opportunity and founded a company Fargreen. Now, rice straws are used to grow gourmet mushrooms like Buttery Buttons and Oysters. Avoiding burning reduces emissions to the atmosphere. Whereas this also helps Vietnamese economy discover new market prospects. Fargreen creates a farmers network, a sustainable community, that has produced hundreds of kilograms of mushrooms so far utilizing tons of straw.

Today, Vietnam is highly dependent on Chinese imports of mushrooms – it takes up to 80-90% of total market share. The locals question the quality of the imported goods. Tran’s concept ensures the higher safety of grown mushrooms and helps Vietnam create its own eco-vegetables and mushroom market. Alongside, Fargreen enhances economic stability, supplies residents with job opportunities, and makes waste management more effective. The project prevented 10 tons of rice straw from burning and decreased greenhouse gas emissions by 10 tons respectively.

Tran sets a bright example of entrepreneurship – the company not only generates revenues but also helps the community. Fargreen is a business solution for the next generation with sustainability and eco-friendliness as the core values. Focusing on prosperity, health and wealth of the local population unveil a curtain to sustainable future with social entrepreneurship culture as a driving force.

The year 2018 is expected to accelerate the growth of Vietnamese economy as investors flood the country. Prime minister predicts economic growth to as high as 6.7% this year. The labor market in Vietnam is relatively large. Over 63% of the 93 million Vietnamese population are of working age. There is a hope that the future developments will help country economically as well as ecologically.

Waste-to-Energy

Global waste is expected to triple by 2100. Current global waste generation levels are about 1,3 billion tonnes per year doubling in the next seven years. Overall, it signals that the waste produced per day by a person would rise form 1.2 to 1.42 kg. Nevertheless, those numbers differ by countries, regions, cities, and even within cities. The waste management market potential reaches over $800 bn cumulative investments by 2030.

Waste-to-energy plants are one of the solutions to wasting issue and for heating and energy recovering opportunities. The North London has set a target to recycle 50% of regions waste by 2020. A new energy-to-waste plant is planned to be built in London by 2028. The new facility is expected to treat up to 700,000 tonnes of waste per year. At the same time, 98% of Copenhagen City heating is already supplied by waste heat.

China is planning the world’s largest waste-to-energy power plant to its fast-growing Shenzhen. The plant is expected to burn up to 5 000 tonnes of trash daily. The Chinese government has on agenda building 300 such plants around the country. “Waste-to-energy plants are not an energy solution,” says Chris Hardie, a partner at Schmidt Hammer Lassen Architects designing the project in Shenzhen, “They are a way of dealing with waste and using this process to generate electricity as a byproduct of the process. Cities have to move towards more recycling and reducing their waste for sure–and of course, developing more sources of renewable energy. That is sort of the point we are making by proposing this be the first waste-to-energy plant that has a renewable component to it.”

Plastic-Currency Exchange

Haiti does not have a recycling infrastructure, and plastic and other waste are often simply dumped on the ground or in the ocean. Insufficient waste management remains one of the major concerns of the local government. The country is drowning in environmental problems: severe deforestation problem, overpopulation, a lack of sanitation, natural disasters, and food insecurity. At the same time, two fifth of Haiti’s economy depends on agricultural activities. As the governmental control and actions are not sufficient, population meets the tragedy of commons.

Shell and Henkel create collaboration with Plastic Bank and resolve problem locally. To deal with economic and social issues, the concept of Social Plastic offers exchanging waste for cash, goods, payments for education or free charging of various devices. With this project, Haiti’s communities get a better access to education and recreational opportunities. Another partnership, between HP and Timberland, helps to fund health and safety training for all of the workers, job training, and scholarships for the estimated 200 kids, ages 8-12, who work at the landfill. HP attempts to diminish the contamination of Haiti area by buying recycled plastic for the future production while Timberland uses this material to produce its shoes and bags. Global companies see the future behind the culture of recycling and promote it to the masses. Whereas international companies regard it as an opportunity to support their brand image and sustainability strategy on their way to high revenues.

Novel sustainability-driven
business model

Climate change, air, and water contamination will always be on the rise – fuel, plastic, megacities, and industry will remain the major sources of waste with 15%, 40%, 12%, and 32% out of total world pollution respectively. This drives the need for the businesses to think more about the environment and create mutually beneficial solutions for society and nature. Profitability of the company is still an essential value. The top 500 firms’ revenues equate to nearly 37% of world GDP. The change that could happen by convincing fifth of them to commit to go carbon-free and to take a less antagonistic view of their labor force may be significant. As Tensie Whelan, Professor at Stern School of Business, has pointed out in the HBR interview: “I noticed that many leaders see climate change solely in terms of minimizing risk. But I think the interesting part comes when they start to see it as an opportunity for innovations that are financially beneficial as well as socially beneficial… There’s $12 trillion in business opportunities for solving sustainability challenges.”

According to McKinsey research, many enterprises add a glimpse of eco-friendliness and altruism to their corporate strategies. Improving production efficiencies (33%) and enhancing reputation (32%) are the major drivers for embedding sustainability in business activities. It becomes a core part of corporate planning whereas CEOs highlight this trend in their agendas. Novel sustainability-driven model is already started being implemented worldwide, and rising interest in sustainability will only support its spread. The changes in attitudes towards eco-concerns and regional problems will prepare the world for the future of innovators. Business sector is now entering the better world, where challenges are discovered as new economic prospects.

Insight Box

Rising significance of ecological problems affects the way companies do business. Sustainable values become the base of business models. Mutual benefits and involvement of global market players to solve local issues are newly established values of the new world of sustainability, health, and prosperity. It is essential to find the way to promote sustainability with various social and economic impact.

#business strategy #haiti #sustainability #vietnamese economy #waste management
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About the category

Last century brought totally new visions on business environment. The way of living, working and existing overall transformed into globalized digital world. Humanity faced new problems and now has an objective to turn it into the opportunity to develop and grow the business. Managing the ecosystem inside and outside the company, improving the well-being of workers and saving the talents or outsourcing their tasks – these and other solutions are presented in this category.

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