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It’s time to use sustainable business models

Beverley Nielsen, Associate Professor at Birmingham City University (BCU), informs us how sustainable business models, such as a green economy, can help your business decrease costs, and increase productivity and profit.
Photo of Beverley Nielsen



It’s time to use sustainable business models

Beverley Nielsen, Associate Professor at Birmingham City University (BCU), informs us how sustainable business models, such as a green economy, can help your business decrease costs, and increase productivity and profit.
Photo of Beverley Nielsen

What is a green economy?

Greening the economy is about moving to sustainable business models that do not lead to continuing increases in greenhouse gas emissions.

According to the UN Environmental Programme, a green economy is “low carbon, resource efficient and socially inclusive.”

It means we must think smarter and look to utilise services that decrease pollution and use fewer resources.

Since the last industrial revolution, we have seen an increase in emissions to over 400 ppm. This has caused a negative impact on our climate, increasing our global temperatures to over 1.2 degrees centigrade.

Greenhouse gas emissions are produced through a variety of economic activity.

For example, electricity and heat production account for 35 percent of emissions, agriculture amounting to 24 percent, and 21 percent for industry and 14 percent for transport.

The previous November’s COP26 conference taught us that greening the economy is an irresistible proposition.

After all, more and more customers are making purchasing decisions based on what is good for the environment.

According to a 2021 report from Deloitte into sustainability and consumer behaviour, consumers are focused on reduced waste and packaging when they do their food shop.

Furthermore, a reduced carbon footprint is at the top of their wish list when they shop for household appliances.

Changing the way we produce and consume is a key business trend for 2022.

It is also something your fellow businesses desire to achieve. In a recent survey from the Federation of Small Businesses, 1,200 businesses expressed their ambition to become more sustainable.

By not adopting a green economy, you run the risk of not playing your part in combating climate change and losing key customers along the way.

What are the benefits of adopting sustainable business models?

In my recent book, Exploring the Green Economy (co-edited with fellow BCU academic Steve McCabe), we discuss that in order to have a successful strategy for going green, you must include two key objectives.

These are:

  • Improving resource management and boosting productivity
  • Encouraging economic activity to take place where it is of best advantage to society in the long term, for example, by using circular economy principles.

By going green, there will be benefits to health, wealth and the welfare of citizens around the world.

This is especially relevant to those who have suffered inequality and poverty in developing countries.

We can also see a more efficient water, energy and transport infrastructure, and introduce efficient technologies that can reduce costs and increase productivity.

The Covid-19 pandemic has seen customer motivations shift. Shoppers are more conscious about a product’s origins, with 51 percent considering the eco credentials of a product just as important as the price.

Going green provides you with an enhanced brand image, giving you a competitive edge.

Thinking carefully about wasting as little as possible will have a positive effect on your costs. O2’s new green calculator has found that a company of 1,000 employees can save around £2.6 million each year.

Adopting more sustainable business models can also have a positive effect on employee morale, with three quarters of employees saying their employers should do more to address climate change.

Your business has a part to play

A mix of government incentives and sanctions will ensure that businesses must dedicate effort to the reduction of greenhouse gases.

This will either be through direct production or through processes employed by suppliers.

One vital way you can play your part is to carry out an energy use audit.

Energy use is the greatest contributor to greenhouse gas emissions, so understanding your output and making swift changes can yield huge benefits.

Upgrading machinery and consideration of innovative techniques, for which there are government grants, will vastly improve efficiency and reduce energy requirements.

Think sensibly about your packaging. Given that not all packaging is recycled, look at selecting materials that can be used again and strip away any unnecessary packaging.

Adopting lean production techniques is a sustainable business model with long-term benefits. This entails identifying areas of production that could be causing unnecessary waste, such as:

  • Unnecessary transportation
  • Excess inventory
  • Overprocessing or adding unnecessary features to a product
  • Defects that require costly corrections

Don’t forget the importance of the supply chain. For example, 47 percent fewer emissions are created by manufacturing clothes in the UK rather than overseas.

It is easy being green

Don’t be afraid to benchmark against other businesses that have been successful.

For example, Make UK has a net zero hub which provides a valuable service to businesses. The CBI also has helpful information on implementing environmental, social and governance policies.

At BCU, our business analysis tool can help you identify key areas of development, diversification and expansion.

You’ll also receive one to one consultancy from our Business Growth Advisors. Plus, you will have access to additional business growth support activities including the Enterprise for Success growth workshops.

Our research and development partnerships could also yield positive outcomes that enable you to reduce your emissions.

By partnering with an experienced academic with considerable knowledge, you can develop new ideas that can help you make a positive contribution.

Interested in finding out more about going green?



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