Given the number of myths surrounding sustainability, many business executives can be reluctant to place sustainability into their company’s business strategy. Key decision-makers may believe the costs of renewable energy outweigh the benefits, but this couldn’t be further from the truth.
That’s why we’re here to do some serious myth-busting: not only is sustainable energy a win for the planet, but it also can promote business and economic growth. Here are eight of the most common sustainability myths, debunked:
Myth #1: Business growth is impossible without environmental cost.
Contrary to the popular narrative, sustainability and business growth are not mutually exclusive. It starts by adopting a circular economy model.
The circular economy is restorative and regenerative by design. It’s essentially the phrase “reduce, reuse, recycle” in action: instead of businesses dumping waste into landfill, they refurbish it to create raw material for new goods. As companies reuse resources and eliminate waste, they reap both economic and environmental gains. A 2015 McKinsey study found that adopting circular economy practices in Europe could generate cost savings for businesses of €600 billion a year, as well as €1.8 trillion more in other economic benefits. In addition, sustainable businesses tend to outperform their traditional counterparts.
Largely successful businesses across the globe have already put their wheels in motion for adopting a circular economy. Among these are multi-million dollar brands like Dutch denim mogul G-Star Raw, French automaker Renault, and Energizer, the creator of the world’s first battery made with 4% recycled batteries.
Myth #2. Sustainability data is too costly to manage.
We’ll be honest: this is somewhat of an outdated take! The dawn of the digital age provided us with ample solutions for managing data quickly, accurately and cost-effectively. Businesses today have an entire suite of tools for collecting and aggregating data at their fingertips. These digital solutions also make it possible to turn those data into meaningful insights, and leveraging insights is critical for monitoring and cutting energy costs.
As the world moves toward embracing sustainable energy, IoT (Internet of Things)-connected devices play a large role in managing data time-and-cost-efficiently. For example, smart meters collect energy usage data, then send customers reports about their energy usage. This reporting allows customers to identify if they’re wasting resources and ultimately save on their energy bills. According to the National Renewable Energy Laboratory, the cost of smart meters is less than that of conventional meters, ranging from $100 to about $250 per meter.
Ultimately, as businesses adopt smart energy technology, they are able to efficiently manage their sustainability data while greening their operations.
Myth #3. Sustainability is just a fleeting trend.
On the contrary, sustainability is here to stay, and the proof is in the purchases. In 2019, a group of the world’s biggest tech companies (Google and Facebook among them) emerged as some of the largest buyers of renewable energy to power their data centers. In fact, the amount of clean energy purchased by companies has tripled in the past two years, pointing to a rising tide of renewable technology adoption. Among businesses and individual consumers alike, conscious consumption is rising, and advances continue to be made on the forefront of renewable energy technologies.
Myth #4. Sustainability is merely a trendy buzzword that boosts a brand’s reputation.
Sustainability has been a buzzword across various industries for years now. And while, yes, sustainability does play a role in a company’s reputation, it doesn’t stop there. Customers and stakeholders are no longer satisfied with businesses that simply pledge to take action. Instead, they want to see those pledges put into effect. As a result, implementing sustainability practices improves customer and stakeholder relationships with businesses, ultimately contributing to their growth.
Myth #5. Everyone understands what we mean by sustainability.
Sustainability is a word that is often used but sometimes little understood. While it generally refers to reducing the depletion of natural resources, individual businesses will vary on their own definition. Understanding what sustainability means to a business requires knowledge of the scope of its corporate responsibility plan and goals. From there, making an adequate plan of action to meet those goals will fundamentally determine how a business defines sustainability.
Myth #6. Renewable energy is too expensive to make economic sense.
As renewable energy technology advances, the cost ultimately lowers. Over the last decade, wind energy prices have dropped by 70%, whereas solar prices dipped by 89% on average. What’s more, in 2018, the price of renewables fell below the cost of coal. Renewable energy prices are expected to continue falling, meaning it actually makes more economic sense to invest in renewable energy than in fossil fuels.
Wind energy prices have dropped by 70%
Renewables prices fell below the cost of coal.
Solar energy prices have dropped by 89%
Myth #7: Buying RECs is the same as buying renewable energy.
RECs, or Renewable Energy Credits, represent the energy generated by renewable sources — but they’re not equivalent to buying electricity. Additionally, RECs are not offsets, meaning there’s no guarantee any amount of fossil fuel electricity generation is avoided; rather, they place positive value on clean energy generation.
Myth #8: Employees and stakeholders don’t care about sustainability.
The fact is that employees are actually more engaged and productive when working for companies that invest in sustainability, ultimately leading to upticks in profitability. Additionally, companies that are part of the Carbon Disclosure Project, an initiative that supports companies and cities to disclose the environmental impact of major corporations, saw an 18% higher return on equity over others in 2018, pointing to evidence that investors value a company’s sustainability performance.