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Posted on January 19, 2022
Updated on February 16, 2022
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Historically, there has always been a trade-off between maximising profit margins at the expense of the environment and vice versa. However, the World Economic Forum has proposed a radical change in approach suggesting that businesses should emphasise the planet and its inhabitants over profit, aka the Great Reset – planet, people, profit. As such, the incentives, practicality and pitfalls of going green are discussed, to determine how businesses should act in wake of the great reset.

### The Incentives

A green company is a clean company as rhetoric is becoming more popular due to the exponential growth in the severity of climate change and the sociocultural shift to show support for acting in the planet’s best interest. As such, it is reputationally-beneficial for businesses to don an eco-friendly stance allowing them to maintain and improve consumer, client, staff and shareholder relations. This can be seen in a rise of conscious consumers demanding emphasis on ethical practices. If any of these relationships break down, they can have significant financial and social ramifications for the business, especially in our modern online society, where social media can act as the judge, jury and executioner. As such, brands and organisations are at risk of being cancelled.

### The Pitfalls

The social capital at stake has created an environment of ‘Survival of the Greenest’. As such companies are lured into aggressive eco-friendly marketing whilst not applying it into their policies, a.k.a greenwashing. An example is the Oji Paper Company claiming it uses 50% recycled content in their products when in fact use non.

Greenwashing can in turn open a company to litigation and penalisation. For example, Ryanair and BMW both had adverts banned because they were making misleading environmental claims. This not only has legal ramifications, but it also significantly tarnishes the trust of the clients, consumers and shareholders. This can have a knock-on effect. Notably, the Consumer Goods Forum & Futerra, 2019, found that nearly half of adolescents and young adults would trust a brand more if they were being honest, even about their problems. As such, it is in the businesses best interest to build a glass box brand centred around transparency, to 1) avoid greenwashing and 2) maintain trust in; and integrity of the brand, so customers can make informed choices.

There are also major flaws with the ‘Great Reset’ itself. The principle that the planet and people should be placed above profit is too idealistic and creates an ‘is vs ought’ dilemma. All businesses primary goal is to generate capital and to say otherwise undermines the nature of free-market economics. Any business that follows this guidance will be outcompeted by those who do not. This will lead to the demise of companies invested in going green and prevent them from aiding the planet in future.

As such a middle ground should be aimed for where green planet-friendly initiatives are applied where possible and only when it makes financial sense to do so i.e. in a win-win situation. This will keep eco-centric businesses afloat, and as time passes, the socio-cultural landscape will shift to a place where ideally, planet, people, profit should be seen as equal, or at least as equal as possible.

Overall, there are multiple strong financial and innovative incentives for businesses to adopt an eco-friendly approach. Adopting this ideology does create a trade-off scenario. However, this does not mean a win-win result is not possible. There are some pitfalls, such as becoming greenwashed which can have significant ramifications on the business. Consequently, businesses should avoid over-zealous rhetoric and promote a realistic, transparent view of their green actions. Finally, the ‘Great Reset’ is too idealistic and will not facilitate a competitive business. Alternatively, companies should strive to minimise the gap between planet, people, profit with the aim of one day it being equal.