On the surface, sustainability and business might seem at odds. Businesses want to grow, which often means more pollution and negative environmental impacts from more offices, plane trips for client meetings, and increased manufacturing. However, reining in emissions, protecting public lands, and creating more sustainable practices needn’t inhibit business growth.
Under President Biden, efforts are in the works to align businesses with public sustainability goals. Biden’s candidacy website states, “our environment and our economy are completely and totally connected.”
For example, better fuel efficiency standards will spur car purchases, improved public transit means better mobility for workers, and public demand for sustainable products will create new niches for companies to fill.
As Biden’s climate plan moves from policy goals into law, small and medium-sized business owners should keep a close eye on how they can realign alongside the environment and economy.
Biden’s top-level goals—namely net-zero emissions by 2050—should give businesses a general idea of where the country’s headed. While regulations will likely force large businesses and oil and gas companies into compliance—for others, new rules will create opportunities facilitated by public investment and consumer shifts.
More transparency and the bottom line
One area where Biden has set his sights: a mandate that requires publicly traded companies to disclose more around areas like their supply chain emissions. Even if your company hasn’t gone public, you still might sell to public companies. Reducing your environmental impact will be essential to removing barriers when selling to companies that have to account for their entire supply chain’s climate impact.
The emphasis on transparency will also continue to spur public pressure that could affect your bottom line. For example, suppose your customers see a competitor enacting new sustainability measures. Even if those measures result from legal obligations, the sustainability measures are a perceived value add. It’ll impact your bottom line if you don’t act, too. According to a study from IBM and the National Retail Federation, almost 60% of consumers “are willing to change their shopping habits to reduce environmental impact,” and over 70% would pay a premium for sustainable brands.
A new look for offices
As companies grapple with the future of work, they’ll have to confront how they balance remote and on-site work. They’ll also have to address the environmental impact of their offices.
Biden’s climate plan calls for upgrades to four million commercial buildings to reduce their overall environmental impact. It calls for measures like installing efficient lighting, appliances, and HVAC systems to reduce energy consumption.
Even if businesses aren’t required to upgrade their offices, there are other reasons to take action. For one, using less energy helps you save on your utility bill. Plus, under President Biden, there could be incentives for businesses that invest in clean energy and sustainable solutions. Some utility companies provide rebates for businesses that switch to LED lighting. It’s conceivable that, on a federal level, similar types of rebates will crop up, whether for lighting, new windows, or electric vehicles.
The Department of Transportation has also taken an active role in sustainability with anticipated changes designed to encourage more environmentally friendly commutes.
Emissions could affect taxes
The Wall Street Journal reported that in April, the Biden administration will announce emission-reduction goals for 2030. Some external groups will push the White House to aim for a 50% reduction from 2005 levels by the end of the decade. Getting there will require renewable energy to take a front seat, but restrictions and carbon taxes will also ride shotgun.
“Biden’s climate and environmental justice proposal will make a federal investment of $1.7 trillion over the next ten years, leveraging additional private sector and state and local investments to total to more than $5 trillion,” Biden’s candidacy page notes. However, that money will have to come from somewhere. Biden’s climate policy proposal states that his plan will be paid for by measures like rolling back some of the Trump tax cuts, which reduced the top corporate tax rate from 35% to 21%.
Some business owners could face a higher tax bill in the coming years to account for sustainable spending. Yet large businesses will likely bear the brunt of any increase. During her confirmation hearing for Treasury Secretary, Janet Yellen noted Biden’s position is to repeal tax cuts for “the wealthiest Americans and large companies.”
The future looks sustainable
While Biden was quick to sign executive orders—including rejoining the Paris Climate Agreement—much will have to wait until government agencies implement sustainability-related rules and Congress passes more laws. For now, however, the general political tone has shifted in a positive direction and placed a newfound emphasis on sustainability. As the government and consumers turn in a sustainable direction, business owners will need to continuously consider how to comply with environmental laws while leveraging sustainability as a competitive advantage.