Insights on Environmental Health & Safety (EHS), Operational Risk and Product Stewardship

Why Leaving the Paris Accord Intensifies the Focus on Sustainability

June 19th, 2017
Paul Marushka
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When the United States pulled out of the Paris Accord earlier this month, it changed the environmental climate in this country—and the world—profoundly.

While many pundits, advocates and talking heads have decried how much this will set the U.S. and the rest of the world back in terms of environmental initiatives and sustainability, the truth of the matter is that this decision could easily be a driver for sustainability.

Let me explain.

The fact is there are many more people today who are in favor of green and sustainable efforts than those who are against them or don’t have an opinion about them. For instance, a recent study by Nielsen found that 66 percent of global consumers were willing to pay more for sustainable brands—up from 55 percent the prior year—and younger people are even more on board with sustainability. In the same survey, 73 percent of global millennials said they were willing to pay extra for sustainable offerings—up a robust 23 percentage points from the prior year.

That means 3 out of 4 people in their 20s and 30s believe sustainability is a big deal, and since advertisers spend 500 percent more on ads aimed at millennials than any other generation, it’s pretty unlikely that any company would want to do anything to upset this socially conscious cohort.

Additionally, the move to exit the Paris Accord has lit a fire under green advocates to get the message out, and that’s exactly what’s happening. People who never knew what the Paris Accord was about do now. Just look at the Google search numbers. A recent Google search of “U.S. ratifies Paris Accord” generated 1.5 million results, but a search of “U.S. to withdraw from Paris Accord” (neither search in quotation marks) received 3.6 million results. When you search “Trump Paris Accord,” almost 41 million results appeared. The pullout is breaking the Internet, and it’s only been a couple of weeks since the news broke!

If you don’t think companies are paying attention to the vocal clamoring for sustainable business practices, you’d be wrong. In today’s business world, consumers not only vote with their wallets but also via social media. No company wants to be the target of any type of shaming campaign, but even without that pressure from consumers, the fact of the matter is most businesses already understand the importance of sustainability.

According to a study taking the pulse of businesses post the Trump decision on the Paris Accord by Urjanet, the energy data company, 73 percent of companies expect their commitment to sustainability to be the same while 21 percent plan to increase their involvement. Only 7.7 percent said they plan to decrease their commitment.

At Sphera, where we provide software and information services to asset and risk-intensive companies in the Oil & Gas, Chemical & Life Sciences and Industrial markets, we are seeing a similar sentiment. This is clearly based on the sustainable direction that consumers, employees, communities and shareholders want to go. It might surprise you to learn that large energy and power companies in particular are leading the charge for sustainability. These organizations are well-aware that their business practices can and will affect the environment, so companies like Santee Cooper, South Carolina’s largest power producer, have employed Environmental Management Information Systems to keep on top of regulations, stay in compliance and better serve their business needs, their community’s needs and, of course, their workers’ needs.

Do employees really care about working in a sustainable work environment?

You bet they do. Today’s employees are expecting much more from their employer than just a paycheck, new research shows. A study by the personal energy management platform WattzOn revealed that more than three-quarters of U.S. workers think it’s important that their employer protect the environment. Research shows that 1 in 4 employees would be likely to look for a new job if they discovered their employer had a bad record on environmental issues, while more than 20 percent would probably accept a 5 percent pay cut to work for a company that takes strong action to protect the environment.

Bucking the idea that sustainability hinders economic performance, a UCLA-led study from a few years ago found that companies that voluntarily adopt international “green” practices and standards have employees who are 16 percent more productive than the average worker. Employees in such green firms are more motivated, receive more training and benefit from better interpersonal relationships.

Companies that haven’t embraced sustainability are at risk on many fronts. Advancing Operational Excellence through sustainability is a critical part of proactive management of key stakeholder concerns. Companies that successfully address these sustainability issues outperform others when it comes to attracting top talent, investors, community partners and, most importantly, consumers.

The train has left the station in terms of sustainability, and it’s not coming back. Despite the U.S. leaving the Paris Accord, sustainability efforts are only going to keep picking up speed as well as corporate passengers along the way.

Paul Marushka

As Sphera’s founding President and CEO, Paul Marushka is responsible for providing overall strategic leadership for the company in developing, directing and implementing go-to-market, service, product and operational plans.

Paul has grown businesses by bringing innovative solutions to market in leveraging software, analytics and technology services. Prior to joining Sphera, Paul served as President of Marsh ClearSight, a business unit of Marsh & McLennan and a leading provider of software, services and analytics for enterprise risk management, safety and compliance management and claims administration. Paul also has held executive positions at software and data companies such as Fair Isaac Corporation (FICO) and CCC Information Services.

During his career, Paul has developed and launched a variety of software and analytics products recognized by the Gartner Group for their impact on the industry. He has authored numerous articles on the use of analytics and technology in decision-making and has spoken in a variety of forums including the University of Chicago Booth School of Business, the Gartner Technology Summit and the Risk and Insurance Management Society.

Paul has a JD from the Northwestern University School of Law and an MBA and AB from the University of Chicago.

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