In a recent report, the Intergovernmental Panel on Climate Change (IPCC) warned that without “rapid and far-reaching” changes to how land, energy, industry, buildings, transport, and cities are managed, the damage to our planet could be irreversible. The message was clear: we need a cooperative effort on a global scale to change our current trajectory. And, given that many of the toughest sustainability challenges the world faces are linked to how it does business, the only prudent way forward is to change how business is done.

Major academic research today centres around the question of creating a sustainable business model which has low carbon footprint yet having minimal tradeoff’s while ensuring profitability. The concept of “green business” is picking up not just in the developed world but also the developing countries. According to the Ethical Corporation’s latest Responsible Business Trends report, 69% of business executives surveyed said they are integrating SDGs into their strategies. At the same time, the number of companies receiving B Corp Certification — which measures a firm’s social and environmental performance — has increased in recent years.

Many industrial experts cite increased profitability and policy support while making a shift towards sustainable business. Today, as the world grapples with dual problems of environmental sustainability and unemployment, governments across the developing world are promoting environmental friendly industry’s, while at the same time pushing for creation of new employment opportunities. This is wise not just from welfare economics point of view but also for pure business economics. Some of the major sectors which have found a new lease of life are in the fields of waste segregation and management, green financing, sustainable agriculture, sustainable manufacturing particularly in small and medium enterprises. Many innovative startups which have incorporated green technologies to give a new life to their traditional business models for example in the field of hydrophonic farming many startups have started to measure their levels of carbon footprints, similarly the practice of waste management in a small state like Lesotho has incorporated technological innovations to construct roads, dam boulders which in-turn is helping it mitigate the challenges of floods and soil erosion, environment friendly steel pickling units of Indonesia have set a precedence on waste disposal where they are substituting nickel and chromium coatings with more environment friendly products to polish aluminium and steel utensils. We are increasingly witnessing a shift towards environmentally conscious business practices which is also opening up new opportunities in the world of sustainable economics.

The Business and Sustainable Development Commission has estimated that meeting the SDGs for promoting environmentally conscious businesses could add some $12 trillion in the global GDP and 380 million jobs to the global economy by the end of the next decade. This would mean an addition of both human and investment capital in the economy, which ultimately would push towards higher consumption and rotation of money in the circular economy.

Global finance is also inching toward sustainability. For example, environmental, social, and governance assets under management are estimated to be as high as $22 trillion dollars; $82 trillion is committed to the UN Principles for Responsible Investment; $32 trillion is pegged to carbon pricing; and even the market for “green bonds” is growing exponentially. This momentum matters because financial market support will be essential in achieving the sustainable development agenda not only for the government but also for businesses. For this Partnerships for the Goals (SDG 17), recognises and pushes business leaders to cooperate with governments and civil society to deliver on sustainable-development objectives.

Businesses must urgently change to support the societies they operate in. Technological, demographic and macroeconomic disruptions are reshaping our economy and society — and stakeholders are demanding a change. Consumers want safety, privacy and environmental responsibility. Employees require a stronger sense of purpose and rewards. Regulators assail business practices in banking, energy, healthcare and big tech. Acknowledging an urgent need for change, even the governments are shifting to the new paradigm to ensure a balance between environment protection and businesses. The US-based Business Roundtable reversed two decades of official policy and called for a more balanced model of capitalism. Promoting a policy environment to make environmentally conscious manufacturing decisions.

Indian businesses too must pickup cues from their global counterparts. Sustainable business is the key to the doorway of entrepreneurial success. It will not only garner policy support but would also make businesses survive market pressures, ensuring customers loyalty, brand power and equity.It is prudent for existing businesses to alter their ways of consuming as well as delivering products, while those who are thinking of setting up business for the future must set precedence for many to grow in a sustainable manner.

Political Economist and strategist— specialising in International Public Policy, Globalisation, and Sustainability.