Maria Soxbo: Future-proof your company!

Text: Maria Soxbo

Everyone needs to help turn the climate crisis around – politicians, citizens, civil society, and businesses alike. The climate issue isn't a separate topic among many others; it is part of every other issue. It’s involved in everything from infrastructure investments and education to conservation and new business models. Here, all companies, from the very large global giants to medium-sized companies, down to startups and small businesses, will play a crucial role. Not only because companies determine what products and services citizens have access to, but also because the collective business community is responsible for a significant share of emissions that must be drastically reduced.

Time to adjust your business model?

Currently, Sweden's economy is only a few percent circular, 3.4%, according to the Circular Gap Report 2023. This means that the vast majority of Sweden's economy still relies on virgin resources, which then do not circulate back into a loop. Instead, something is extracted, created, and used that then turns into waste. Sweden even falls below the world average, while countries like the Netherlands – which have had to accelerate their transition due to limited resources and a large population – are already well above 20% circular economy. Here, there is much analytical and strategic work to do for most companies. What does your business model look like today? Is it circular – that is, does it close loops, protect resources, and minimize waste – or is it traditionally linear? A simple analogy is that if today’s model is about selling, for example, eight pairs of cheap fast fashion jeans, the future will be about selling one pair of thoughtfully produced quality jeans – eight times. This could involve renting, second-hand sales, repairs, and remade designs. This applies, of course, to service companies as well. The first step is to examine what type of services you offer and their consequences. An advertising agency creating campaigns for fossil fuel companies, for example, isn't contributing to the transition – even if it doesn’t directly use fossil fuels. Additionally, there are emissions even from service companies that need to decrease. The biggest emission categories tend to be: – Travel (look over travel policies, reward employees who take the train with extra vacation days, provide public transport cards and bikes as benefits, upgrade any vehicle fleet to electric) – Software and electronics (purchase refurbished rather than new company phones and computers, choose cloud services and other digital providers with care, ensure that all data centers run on renewable electricity) – Food (make vegetarian meals the default at meetings and conferences, reduce food waste in any staff cafeterias) – Electricity consumption (optimize energy use and choose contracts for renewable energy)

Build a resilient company

The advantage of adjusting your business model is not only that emissions decrease and loops close, but also that the company gets more revenue streams to rely on, thus becoming more resilient. Many circular industries are still relatively new, and it can be risky to put all eggs in one basket (like the rental wardrobe industry, where many actors have had to throw in the towel). However, working simultaneously to lower emissions, increase quality, extend product life, and offer repairs, remake services, and collect worn-out products for repurposing is a smart way to become circular step by step while also making the revenue model more resilient to supply issues, stricter regulations, and economic downturns. Transitioning to a circular business model is also a necessity to retain customers in the long run, as they increasingly become "circular consumers" – a term that describes people who want to keep their climate footprint low and avoid overconsumption, preferring instead to repair, care, share, and reuse.

Work According to the Carbon Law

All companies should work according to the "carbon law" – a model that stipulates emissions must be reduced by at least half every decade from 2020. This "law" can be used as a benchmark for countries, municipalities, cities, individuals, and especially companies. To halve emissions, you first need to understand how large they are, divided into scopes 1, 2, and 3. Scope 1 includes direct emissions from the company's operations, such as emissions from factory chimneys or company vehicles. Scope 2 consists of indirect emissions from the energy the company purchases. This is a significant source of global emissions since many factories are powered by coal or oil – whereas in Sweden, we mostly use fossil-free and renewable electricity. Scope 3 includes all other indirect emissions throughout the entire life cycle – from raw material extraction, transportation, employees commuting to work, purchased services, waste management, how products are handled by consumers, and what happens when they are discarded. Understanding your emissions to create a plan for reducing them is essential for all types of companies. This can be complex, so it is likely necessary to seek external help to get accurate calculations – but this investment pays off in the long term as emissions decrease and the company gains many opportunities to communicate credible sustainability messages.

In Summary – You Benefit by Being Part of the Solution

As the world transitions, more binding laws and regulations will push companies in the right direction. Taking proactive steps to reduce emissions now makes it easier to justify the required investments, while also increasing competitiveness against companies that are less committed to sustainability. But don't forget to see the opportunities that arise as the transition gains momentum. When outdated, fossil-based, and emission-intensive solutions become obsolete, climate-smart alternatives are needed, creating opportunities for sustainable living and facilitating the transition for people. Look around – what opportunities exist where you are? Waste that is currently disposed of but could be a resource? Gaps in the market for rental and sharing services? Win-win collaborations with other local actors who also want to make the shift? 96.6% of Sweden's economy is currently linear – this is the "pie" that future companies have to share!

Maria Soxbo is a freelance journalist and has written this article on behalf of GoClimate.