Why it is beneficial for businesses to be environmentally responsible

Mikhail Babenko, director of the WWF Green Economy Program in our country, spoke about why companies are changing their businesses towards environmental friendliness and focus on consumers born after 2000

To understand the term “green economy”, one needs to comprehend one rather simple thing: any activity has not only a financial and economic result, but also an external additional impact. Both positive and negative. For Russian business, until recently, this impact was mainly negative – the withdrawal of resources, the transformation of landscapes, environmental pollution. However, the consumer, especially the so-called generation Z, now cares not only about what he buys, but also about the history associated with the production of the purchase. And it is starting to change the way we do business towards environmental responsibility.

Take, for example, forestry: you can leave behind a desert, or you can plant a forest again, and if you take care of it correctly, in a few decades you will have new raw materials in the same place. Yes, we are talking about an additional load – investments, infrastructure creation, attraction of capacities. But this does not necessarily mean losses or reduced profitability.

Or here are the mining and metallurgical companies. Why are they starting to look at business differently? Because partners ask questions: how were these resources obtained? Image risks are assessed: whether the social rights of workers have been violated, whether there is a risk of accidents, when, for example, all life in the river basin can be exterminated. These are risks that concern not only the company itself, but also its creditors, buyers, suppliers, employees. Reducing such risks, while requiring investment, ultimately leads to lower costs throughout the supply chain. This is how the concept of “ruble plus” is implemented.

We have been talking about this for ten years now, and only recently have we begun to be heard. We are trying to convey to decision makers in the state and business that it is beneficial to be environmentally responsible. There are real examples when the ESG rating (Environmental, Social, Governance – environment, society, corporate governance. -) helped to attract cheaper borrowed funds. I know of at least three such stories from the ING financial group, when special lending and investment products were created for companies with high quality environmental risk management, as such companies show more sustainable and stable growth in value.

Business begins to look for new development models. For example, “zero waste to the landfill” – they are looking for consumers for waste, and this direction is turning into a separate business unit. The most difficult thing here is actually given a very simple thing – to sit down and count. For example, energy efficiency. You start a conversation about this, and in response: are you talking about light bulbs or what? In the sense that there are more important things to do. But when the question of business survival is at stake, it’s just necessary to catch the little things and move away from the Business as usual approach (we do everything as usual) – reduce payments and make money on what caused a loss or was simply thrown away. After all, it turns out that new solutions become cost-effective in less than a year.

We spoke with retailers who signed the sustainability memorandum about what motivated them to do so. The first is the requirement of investors, and this is especially important for those whose securities are traded on stock exchanges outside our country. What are you doing in the field of sustainable development? How do you measure? How do you define your role in sustainable development? And investors expect specific figures, and the company’s attractiveness for investment depends on the presence or absence of answers.

The second is the consumer. Its role is not yet very large, but a new layer of buyers is emerging, for whom it is important, for example, that the fish is harvested without damaging the ecosystem. They are looking for “eco” stickers on store shelves. Although often such stickers have no real bearing on environmental safety, the term “greenwashing” or “green camouflage” has even appeared. But the fact remains that retailers adapt shelves to demand, they have to reckon with changes in demand, and this affects their suppliers.

Of course, if the business model is geared towards skimming and disappearing, then responsible business management is irrelevant for the company. But it is time to understand: it depends on us what will remain for our children.


Yes, the “Green Sticker” in the store is most often requested by Gen Z, who “haven’t graduated from college yet” and who “we’ll look at in ten years.” Greta Thunberg has spoken out on behalf of this generation, and although there is a whole youth movement behind her, there is no real leverage in terms of decision making yet. And, perhaps, in many respects this is a tribute to fashion. It is hardly possible to predict how Generation Z will behave in ten years. But every generation leaves a trace in the way of life.

Conscious choice, the search for new business models – all this can become a very powerful driver of new technological solutions and spin-offs. Many solutions can be found in nature itself: take the same trees – a newly planted forest that is cared for grows faster, it is of better quality, absorbs carbon dioxide better, restores the ecosystem for wildlife. And it can be cut down again and planted again.

Large companies, sometimes run by those same ex-hippies, are looking more than a decade ahead. And they need to look for solutions to meet the mass demand. The protest of the new generation is directed against the slowness of officials. But many states are already adopting green development strategies. And we see their first results – for example, the Scandinavian countries are purposefully moving away from the use of hydrocarbons. And sometimes this is not a preventive, but a necessary measure. In 2013, Kazakhstan adopted a green economy transition strategy: the country simply realized that by 2025-2030 it would face a shortage of fresh water. China is doing fantastic things today – although at first we had to face the fact that in many cities it became difficult to move around without a respirator. There is nothing to breathe, and the Chinese are now limiting credit for air polluting enterprises, and they are acting very quickly. They have already abandoned the construction of 150 coal-fired power plants, and are introducing a moratorium on logging.

What is good and what is bad? If decisions are made on a wave, on a hype, and this wave turns into thoughtless regulation, this is not good. This is an increase in the administrative burden, the risk of financial bubbles. But more and more companies are going green because it is profitable and creates additional value, provides a resource for decades to come. For example, retailers who receive vegetables and fruits from North Africa. The climate is changing, and it may turn out that there will be no products from there soon – so retailers just have to deal with conservation and adaptation in order to reduce long-term risks. And the biggest plus is that the consumer will definitely appreciate this benefit.