Harmonising profitability and sustainability to thrive in the new green era
Since its debut in the 1960s, the concept of environmental protection has transcended from a plea for action on climate change to a myriad of sustainability pursuits over the past few decades, reshaping the way we live and conduct business. While considerable progress has been made, new challenges are on the horizon.
According to the World Economic Forum Global Risks Report 2024, extreme weather events are predicted to be the greatest risk to humanity over the next decade. However, a recent study conducted by a global organisation found that only 21% of executives in the Asia Pacific region ranked climate change as a boardroom priority. Against the backdrop of looming economic and geopolitical headwinds, what lies ahead for sustainability?
To illuminate the path forward, Professor Sean Zhou, an international award-winning researcher in sustainable operations and chairperson of the Chinese University of Hong Kong (CUHK) Business School’s Department of Decisions, Operations, and Technology, joined alumni Harold Yip (BBA in Marketing 1987, EMBA 2001), a recycling pioneer and co-founder of Secure Information Disposal Services Limited and Mil Mill, and Chester Cheng (IBBA 2019), an intrapreneur and co-founder of a leading green lifestyle reward platform, Carbon Wallet, a subsidiary of MTR Lab, to discuss the difficult questions on how sustainability and profits can coexist.
The genesis of impact: cultivating sustainability from within
Maximising profits and optimising operations are inherently imperative for businesses, as boards are held accountable to their shareholders. While sustainability is important, green endeavours inevitably come with a price. Faced with this fundamental paradox, Chester believes that it is key for companies to identify the “sweet spot” between profits and sustainability.
“The first thing to do is establish a business purpose that meaningfully connects with human society and the planet,” says Chester. “You will also need to develop a compelling business case to justify the ‘green premium’ that the green transition demands. Stay ahead of the emerging trends, identify major threats and transform them into opportunities.”
(Right) Chester Cheng (IBBA 2019), Co-founder of Carbon Wallet, a subsidiary of MTR Lab
A novel business beyond business
As a green entrepreneur, Harold adopts a different approach to intertwining environmental issues and business opportunities. “In Hong Kong, over 2,000 tonnes of paper waste are sent to landfills daily. I felt we could both tackle the environmental task at hand and potentially make it a win for our business, as well,” recounts Harold.
In 2009, Harold established Secure Information Disposal Services Limited, a confidential document recycling and processing company. The first enterprise of its kind in Hong Kong, the company aims to alleviate the burden on landfills while fostering a circular economy for the paper industry. A decade later, he founded Mil Mill, the first tetra-pack recycling pulp mill in Hong Kong. Being the destination for a novel recycling effort in the city, the pulp mill serves primarily as a centre to educate the public on waste reduction. Harold’s unwavering commitment to driving a sustainable future has been well received, and despite the challenges in recent years, including COVID-19, his businesses have continued to thrive.
In the grand ecosystem of sustainability, everyone counts
“Sustainability is an intricate ecosystem, and structural diversity is of paramount importance,” says Professor Zhou, who has dedicated over a decade to researching sustainable operations and supply chains. “Businesses of all sizes play different yet equally important roles,” explains Professor Zhou. “Large corporations can scrutinise their supply chains to identify gaps for improvement in sustainability, from product design, sourcing, production, distribution, to managing end-of-life products through recycling, reusing, and remanufacturing. Due to their scalable operations and influence, they can create a significant impact. They can also stimulate market demand for sustainable products and services. On the other hand, small and medium-sized enterprises (SMEs) and start-ups can leverage their inherent agility and innovative acumen to develop new business models and employ new technologies that larger corporations and governments can emulate.”
Harold Yip (BBA in Marketing 1987, EMBA 2001), Executive Director of Secure Information Disposal Services Limited
Trust: a cornerstone of sustainable engagement
With growing environmental awareness, investors and consumers have become increasingly wary about the sustainability claims made by businesses. An analysis conducted by a leading professional services network indicates that investors are more sceptical than ever when evaluating a company’s sustainability performance. To rally collective efforts from the public to live green, Harold firmly believes that trust is the bedrock principle.
In 2009, Harold integrated radio frequency identification (RFID) into the recycling operation of his waste management business. Through this trailblazing transformation, the process became unprecedentedly visible to the public. “Seeing is believing,” Harold underscores. “Enhancing transparency and traceability is pivotal for building trust.”
Professor Sean Zhou, Chairperson of the Department of Decisions, Operations and Technology, CUHK Business School
Rethinking the green narrative: from fright to fun
While trust forms the basis for businesses to cultivate a virtuous cycle with consumers, Chester believes that the key to inducing behavioural shifts toward a sustainable lifestyle is to build an intriguing narrative that resonates with consumers. “Rather than focusing on the environmental hazards,” Chester remarks, “we have to demonstrate that living a green lifestyle is fun, easy and pleasant.”
Offering a first-hand account, Chester develops a digital platform that brings together governments, enterprises, green groups and citizens to promote low-carbon living. “I believe action inspires action. When consumers are rewarded for embracing green living, we are driving demand for sustainable products, thereby motivating businesses to make more commitments to sustainable development,” Chester says.
Sowing the seeds for a sustainable future
Sustainable development is moving toward a new stage, and Professor Zhou encourages aspiring leaders and young professionals to take the reins. “In my lectures, I regularly address the topic of sustainability to plant a seed in the students’ minds,” he says. “One day, when they become business leaders, whether in large companies or start-ups of their own, I hope that they will envisage their impact on the environment and society and make responsible decisions.”