By Tara Milburn, CEO & Founder Ethical Swag
After Larry Fink’s open letter, there can’t be any questions left. The CEO of BlackRock has pronounced a company’s action toward climate change is a main determiner of their future success in an after-COVID world. The existential nature of the crisis, he argues, is a stark reminder of our fragility, a reason to confront the climate change crisis head-on and consider its ability to change (and threaten) our lives the way the pandemic has. Corporations carry a large responsibility to that end, Fink goes on to argue. The case is closed.
Fink’s advice should be more than enough reason for business owners everywhere to set their intentions toward true sustainability. If words of wisdom from one of the most successful CEOs in America isn’t enough, the outstanding consumer and investor support reaffirms a green-orientation; companies with sustainability solutions are showing an 18% increased return on investment compared to their industry peers.
But following intention with action can be harder than a business owner, especially an early-stage founder, expects. If a question remains among company leaders, it’s not ‘why’ go green—it’s how.
Breaking Down the How: A Founder’s First Steps
Like any company owner, founders have a few steep hills to climb on their path to more sustainable operations. But they also have a number of unique opportunities due to their early stage. Before a product goes to market, the founder has every opportunity to consider their approach from beginning to end, and to forecast the carbon footprint of a product’s entire lifecycle before it lands in the hands of consumers (who will arrive at their own assessments of the company’s environmental success).
This is the step Apple got stuck on back in 2008. The company came to understand that about 98% of their carbon footprint came from the emissions associated with the life cycle of their products, from manufacturing to distribution. Only 2% related to the rest of their operations—energy use in the office, temperature control across their facilities, employee travel, etc.
Since then, Apple has decreased the average use of energy across their products by 70%, and they’ve announced a 100% carbon neutral pledge for the year of 2030. Luckily, new founders have the chance to begin at the beginning, and follow a path similar to post-2008 Apple (before their product permanently changes the way an entire planet communicates).
Renewable Energy: An Important Imperative
As founders expand their teams, the work model is a new post-COVID question that requires contemplation. And whether they land on a hybrid strategy or full-time, at-home operations, it’s important that their energy sources are considered at this stage. Apple began their Clean Energy Program to target their manufacturing emissions back in 2015. Four years later, they had 44 suppliers across 16 countries committed to 100% renewable energy for the production of their products.
At this stage, founders can enlist expert advice regarding the sustainability of their energy solutions—what’s powering their employees’ operations, how are their facilities powered and run, and where are they straying from their goals across supply chain operations. This is no small task, but establishing strong solutions at the beginning is always better than trying to wean an ecological footprint down once the company has been operating for years, and the habits and processes seem harder to change.
The Decisions in Design
When founders come to market with new products, they’re used to getting comments, questions and critiques from all angles. Investors and stakeholders turn the product or service upside down, ensuring it is at its best before it goes live. Low-carbon design and sustainable practices are becoming another key area of assessment for investors, a differentiating factor that holds important value and improves the viability of the product or service in the investor’s eyes.
For physical products, using recycled and renewable materials within the product design will recover incredible margins on the company’s ecological footprint over the long term. Apple has been working at reducing the carbon footprint of the aluminum enclosures for MacBooks since 2015. For services, solving for the transportation to work sites by using alternative fuel sources is a parallel project. Software as a Service (SaaS) providers can tackle similar tasks; switching to green energy for data centers, and investing in carbon offsetting for the energy use that can’t be eliminated.
Policy Making & Goal Setting: A Founder’s Best Bets
Apple’s case study shows a committed company making steady progress toward setting a better environmental example. But their progress didn’t come from good intentions. They wrote their environmental commitments into their supplier agreements, their employee mandates, and their company policy, committing publicly to their green-energy goals and holding themselves accountable.
Founders can take the same steps to set themselves up for real sustainability success. By including sustainability benchmarks in their supplier agreements and requests for proposals, founders will find an influx of like-minded partners who want to work together toward taking on more environmental responsibility.
And by automating carbon offsetting programs, founding teams will know they’re covered for the energy consumption they’re not able to mitigate. There’s no question that the founder’s domain is one of the most high-pace, high-pressure business environments.
If teams set the right sustainability solutions in place, they’ll have solved one of the most urgent, post-pandemic imperatives before they take on the rest of the opportunities, challenges, and entrepreneurial chaos that’s sure to come their way.
Originally published at All Top Startups (November, 2021)