In order to have a sustainable business in future, it is worth trying to characterise how the lifestyle of people might change in future. This will impact all businesses in the supply chain.
Meat production, particularly beef and lamb, contributes substantially to climate change compared to plant-based diets. Alternatives are already available and ever more realistic meat-like substitutes are being developed. The biggest effect will be felt in agriculture, but every element in the supply chain: processors, distributors, shops and restaurants will need to adapt. UK forecasts envisage a 50% switch away from meat.
Most car companies are producing electric vehicles now and have plans to cease production of diesel or electric cars around 2030. Whilst use or acquisition of second-hand petrol or diesel cars or vans looks likely to continue and decline, the acquisition of a new petrol or diesel car is starting to look unsound. We are approaching a tipping point, likely by 2025, where the financial case, never mind the environmental, is in favour of new electric over new petrol or diesel. This will have major disruptive effect on the car manufacturers, some of whom could become ex-car manufacturers. Business users who do not switch over could find themselves at disadvantage, as customers become more discerning and sophisticated in how they perceive the environmental credentials of their suppliers.
There is also likely to be social and government pressure to reduce unnecessary excessive travel and/or switch to public transport. Changes arising as a result of the Covid experience all likely to push this further. Likely trends include more local activity in work and leisure, and less long commuting.
Electricity is now available in most developed countries from renewable sources. Energy and heating efficiency techniques and advice are widely available. Businesses that cannot demonstrate improvement in energy or resource consumption will lose out to those that can. This might be in their material supply, their operations or downstream use by their customers.
There have been significant improvements in aircraft materials, engine design and efficient operation (i.e.: flying full) so that costs and emissions per passenger mile have reduced. Unfortunately, the availability of cheap flights has also helped increase demand. The problem is exacerbated by the increased emissions arising from getting to and flying at altitude. As an example: a one-hour domestic flight could have 6 times the emissions of a high speed train, with prospects that could ratio get worse as electricity supply for the train increasingly becomes more renewable. No such technology exists in the short term for aircraft, although electric or hydrogen powered flight might appear in the 2040’s. In the meantime, the only choice is to fly less often. Business models and personal behaviour will have to adapt to accept this reality.
The most profound impact on climate change is achieved by waiting longer to have smaller families. Less humans means less pressure on scarce resources. This trend, and its business and social implications, already exists in the developed world, driven by other factors.
More generally, social, economic, environmental and political pressure is growing to move to lifestyles that are generally less obsessed with material consumption. In business circles much attention is put on emission reductions in operations, but it might be worth questioning whether your product or service will still have a place in “consumption-lite” world.