The UK was the first G20 country to impose mandatory climate disclosures. From next year, larger EU businesses will be obliged to report on their sustainability as well.
Some businesses have chosen to push their own targets and go further. Apple have stated that by 2030 they intend to be carbon neutral, and Microsoft are aiming to be carbon negative by then.
Legally, financially, and commercially, businesses can’t afford not to understand and improve their environmental impact.
Fortunately, there are 44,595 Greentech startups in the world, developing the solutions to support that transformation.
Yet with a surge in Greentech businesses, finding the skills you need to lead and implement your Greentech objectives is becoming more difficult.
Here is a brief guide to the shape of Greentech, with an infographic to give you a snapshot of the investment, strategy and the green skills your business will need.
The shape of Greentech
The growth of Greentech has been accelerated by the commitment of over 70 countries to the Paris Agreement, which calls for Net Zero greenhouse gas emissions by 2050.
- Last year there was over USD1 Trillion invested in Greentech.
- There are four times more Greentech startups globally than there were in 2010.
- There are 14,300 Greentech startups and scaleups in the US, and 5,200 in the UK. However, when it comes to Greentech investment, China is leagues ahead in terms of spending.
- In 2022, China invested USD546 billion in Greentech, which is more than double the combined investments of the next four biggest investors (US, Germany, France, UK).
The opportunity of Greentech
Aside from legislation, regulation, and ethics, there are powerful commercial reasons why all businesses need to be thinking about, and using Greentech in their operations.
Market forces
85% of global consumers are shifting towards greener purchase habits
On the whole, each generation becomes more environmentally conscious than the last. As time passes and these generations become a greater proportion of the population (with more spending power) they will vote with their wallets.
- 24% of Generation X and Baby Boomers have changed their purchasing behaviour to be more sustainable
- 32% of millennials have done likewise
- In 2022, 55% of Generation Z were buying more sustainable products than in the previous year. They will also pay 10% more for sustainable products
Businesses can’t afford to fall short of these consumers’ expectations.
Attracting talent
Since Millennials and Generation Z are a growing consumer base, they’re also a growing part of the workforce. 65% of workers would be more likely to work for a business with a clear and effective environmental policy. Increasingly, attracting the best talent to your business means demonstrating a commitment to environmental ethics. You will also only attract transformative green leaders if they are convinced of your commitment.
Profit margins
Environmentally-sensitive operating costs (energy, water, waste etc.) can affect profit by 60%. A Greentech strategy that invests in sustainable and renewable solutions could unlock margin that a business had previously considered lost.
The challenges of Greentech
Greentech will mean dramatic changes, and those come with hurdles.
Supply chain
If a chain is only as strong as its weakest link, a business is only as green as its supply chain. It’s where 90% of a business’s environmental impact comes from. You can invest heavily in tech, but if your suppliers aren’t taking similar progress, your efforts may not make much of a dent.
Capital Expenditure
In the long run, renewables save money. Naturally, though, there needs to be up-front investment. Achieving Net Zero will take USD 276 trillion of investment in total.
Talent shortage
From 2016-2021 global hiring for Greentech increased by 40%. By 2050, there are set to be 100,000,000 Greentech jobs. However, by 2026, there’s projected to be a 2% (and growing) demand gap for green-skilled workers.
It’s not a surprise that Greentech talent is a challenge to secure. Teams need vision, creativity, commercial sense, and at least some scientific knowledge, and those combinations are rare.
You also need people who are bought into the business’s vision, while maintaining a mindset that isn’t afraid to challenge and criticise the status quo. Disruptive leadership is essential to transformation.
Gathering all of that is daunting enough, but other businesses will be courting those experts too. You will need a partner to with a network of green technicians and leaders, who knows your sector, and has helped businesses make the green transformations they need.
There are Greentech specialists in RPI’s network who are looking for a new role. Contact people@rpint.com.
