By GoMassive | 22/01/24
Net Zero Goals & Sustainability - A Business Opportunity
Introduction
If we look at the last 200 years of Industrial civilizations, we’ll see that it has happened because of technical innovation. Especially, in the past 50 odd years, everything has changed. Poverty has declined by almost 70%. Life expectancy has increased from 30-40 years to 75-80 years and more. The quality of food, transportation, and general lifestyle has changed exponentially. Technological innovations have provided radical solutions for various problems. But while the world has witnessed these great changes and growth, we are also facing the consequences in terms of climate change. Sporadic rains occur everywhere on the planet. The air and water are polluted. The roads are jam-packed with traffic, and pollution has spread everywhere. Why is this happening?
The issue is that in the past, when innovations occurred, there were no constraints. There was a wealth of resources and a low population to harness and enjoy them. There were unlimited lands and few people to exploit them. Thus, when they extracted the potential of the resources, they didn’t bother about the consequential change as there was no need to worry about any constraints because there was no lack of resources. However, this has changed radically in the last 30-40 years. The human population has grown massively, due to which, now, there are a lot of constraints in terms of using the resources and spending it. One cannot go about in the same manner as one did in the past.
Thus, the challenge of the present time is that the technology that has worked for us in the past 200 years will not be able to take us forward into the next 100 years. Since we have depleted the resources, we cannot employ the same techniques and tools to continue our growth anymore – There is no sand for construction. Materials, like metals, are unavailable, and pollution has spread everywhere: The air is choked, roads are blocked, landfills are filled up, and every city showcases massive garbage mountains in its landscape. So, in the present moment, there are multiple constraints regarding the employment of technological solutions. We are reaching what is called the peaking point. Thus, the same tech will not take us forward.
Additionally, due to the massive changes caused by climate change, now we need technological innovation even more than before. Since the planet is heating up, the need for air conditioning has risen even more. Thus, whereas in the past, only 4% of the Indian population possessed AC, now everyone needs it. However, if we continue to drive the growth of these technological innovations on the same model as before, then the whole world will collapse. As Gandhiji said, ‘There is enough for everyone’s need but not enough for everyone’s greed.’ This means that if we continue to grow according to the previous strategies and follow the Western world model, then the whole world will collapse.
Thus, the challenge for the corporation is to find a way to produce the same qualities of goods and experience by using fewer resources and by using different technologies so that we may arm the whole population of the world without using 100% of the resources because 100% of the resources are not left anymore. Just 10% of the population has used 90% of the resources. Thus, we have just 10% of space left to innovate. This means that we have only a limited number of options left with us. The first one is that all the people in the world cut back on the use of resources, which is not going to happen. The second is that we just let it be and wait for it all to collapse, which cannot happen either. But the third option is that we may find new methods which can solve everything. This can happen through technological innovation.
For example, back in 1980, there was the need to install telephones in the whole of India. However, it was not possible because the cost of executing the operation would have been billions. One would have to lay down the copper wires, establish telephone exchanges and a thousand other things. But the whole problem was solved when mobile phones came onto the scene. And it did not even cost anything because people invested in it and made money out of it. In fact, the traditional telephone lines were not even viable because nobody was able to recover the cost. Before the dawn of cellular networks, the government was bleeding millions to keep operations like MTNL and BSNL running. But mobile phones came and turned the game upside down. From a loss-making thing, it started generating tons of revenue for them. There is massive GST in it. Thus, the government did not lose anything but gained from the opportunity.
Likewise, when we look at banking, the same story unfolds. If you said that everybody should have opened a bank account, there was no way it could have been done because then you would have to meet the cost of opening so many ATMs, so many branches, and everything else. But now, every Indian can easily engage in banking thanks to UPI and other technological solutions. It’s because technology came and solved it at one-tenth of the cost. In fact, everyone who invested in it has made money. Thus, it became a net positive for everyone – it became a net positive for consumers, investors, and for the government.
This is the beauty of technology. If the right tech clicks in, it opens the avenues and makes wealth for everyone. Thus, it is a profit-making item. This is an opportunity for corporates.
Thus, the transition to Net Zero is not a mere obligation but actually a wise business sense because, as such, one can create much more wealth. Faster, Better, & Cheaper is the Venture Capital motto because that is precisely what everyone needs. So if one can generate electricity at a lower cost, and so on, the bottom line will always improve. Thus, this here is the opportunity.
So, going Net Zero and ESG is not an obligation but an opportunity. It is not a requirement or a cost-heavy expenditure but a possibility. By keeping the same objectives of providing air conditioning to everyone, if you can do it with better technology, then it will help you improve customer experience and bottom line without depleting the resources of nature and keep the ecosystem intact. Thus, sustainability is not a cost but an opportunity. It is an asset.
How can corporates do it? They can do so by innovation, but innovation doesn’t come just like that. While some of it happens inside the labs and systems, 90% of the innovation happens from things that are unrelated. Most of the major innovations happened in unrelated environments. This type of innovation can only happen when you have 1000s and 10000s of startups working for corporates.
This is what you can unlock by partnering up with startups because when you work with startups, you crowdsource your innovation, thereby having millions of minds working together to solve the problem without any cost. This is an opportunity, and this is why you should do it.
When you work with startups, it not only helps them but also helps your corporation culture by becoming aware of what’s going around in contemporary times thereby making you more relevant and vibrant. So, in this venture, both the corporations and startups benefit from each other just like how grandfather and child benefit from one another when they come together.