The Long Transition to Environmental Sustainability Is Already Underway
While it will take decades to transition from today’s service- and brain-based economy into an environmentally sustainable one, the transition has already begun. It is important that you understand the time scale of the changes.I base my time scale perception on a change process that I and many others in New York City have not known about. It was New York’s painful transition from a manufacturing town to a city with an entirely different economic base.
New York City lost nearly one million manufacturing jobs in the period between World War II and 1980. In an Analysis of New York City’s apparel clusterGraduate students at Harvard Cassie Collier, Helena Fruscio and Helen Lee wrote that:
NYC was once a city that produced 95% of the country’s apparel. However, due to high costs of doing business, space constraints and the availability of cheaper options abroad, NYC now produces only 3% of the total clothing. The United States.
In 1974, New York City was almost bankrupt after the economic transformations of the 1960s and 1970s. In the 1980s and 1990s we saw the replacement of manufacturing with service businesses like finance, media, information and education. In the 21stCentury, social media and ecommerce companies arrived together with a growing number technology start-ups.
Lower-priced labor from other countries was a key driver of the change, as well as technological innovation. The west side docks of the city were too small to accommodate containerized shipping. As a result, factories needed large one-story spaces to house more automated assembly lines. New York was a manufacturing hub for clothing, appliances, automobiles, and bicycles until the 1960s. Today, manufacturing is only a small portion of New York’s economy. The city’s economy changed unplannedly, as a result of increased crime, civil unrest and out-migration to other states. The decline was seen as a trend that could not reversed at the time. However, the SoHo loft factories that were abandoned became artist studios and luxury homes. The factories that were once there were converted to other uses. New York City was reborn as America’s most international city and gateway to the global economy in the first decade of this century. The city’s population started to grow. New York City was home for 7.9 million people in 1950. It had fallen to just 7 million by 1980. It reached 8 million in 2000. It peaked at 8.3 million in 2016, and then dropped to 8.3 million by 2021. As the city’s economy continues to change, I expect New York City to continue to grow in population.
New York’s role has evolved from an apparel manufacturer to a major center of the global fashion industry. Cassie Collier and Helena Fruscio noted this in their (Pre–COVID) study on New York’s apparel business. Their Analyse:
Thought NYC is no longer competitive in large-lot apparel production. However, NYC enjoys a strong competitive advantage in sample production and small-lot production. Industry players are close to fashion consumers and can quickly test new styles, get quick feedback, iterate on the designs, and be close to fashion customers. design. This is possible because NYC has a highly-concentrated network apparel experts that allows for quick turnaround. For example, a designer can create a sketch and then take it to the office to be walked to a skilled tailor. A sample-maker can bring your design to reality in a matter days. NYC offers flexibility and speed. serving smaller markets of highly-differentiated and higher-priced fashion product is a key strength of the cluster NYC stands out globally for its concentration of wholesale and showroom establishments. NYC is home to approximately 578,000 wholesale buyers and fashion show attendees each year. The wholesale market contributes $16.2 billion annually in direct spending.
These changes in the city’s economy were not lost on those who were both losers and winners of the transition. However, the extent of the transformation was not fully understood by the public nor its elected leaders. As our service-dominated economy makes its first steps toward environmental sustainability, I believe this evolution has continued. New York City’s sustainability initiatives have been relatively overlooked. One initiative is the rapid growth of bikesharing and bike lanes. Another sustainability initiative is to grade large buildings for energy efficiency by the New York City Government. Other environmental sustainability initiatives include:
- A ban on natural gas hookup in new buildings
- A pilot electric heat project in two NYCHA developments.
- An attempt to decarbonize cities’ buildings and vehicles.
- Major initiatives by our electric utilities to save electricity with small businesses, homeowners – funded by a tax on electricity.
- A windfarm will soon be built off the south shore Long Island.
Many private companies are now looking at their supply chains and production processes for waste, toxics as well as energy use and greenhouse gas emissions. Many businesses see the potential in the green economy. New technologies, new services and new jobs are being created. In the 20th century, economic power was represented by the old, polluting smokestack. 21stThe century version is a passive solar-designed building with park views. It houses companies that create smartphone apps, marketing strategies, and ridesharing services.
While the transition towards a renewable resource-based economy has been well underway, there are still many unsustainable practices and businesses around the world. The transition to a sustainable and renewable resource-based economy is going to take decades. Organizations will give operational meaning to the changes we require. As organizations have learned to incorporate financial reporting, occupational safety, customer relations and customer relations into their standard operating procedures. The same goes for sustainability. They will pay more attention how they use energy, water, or other materials. They will be more conscious of recycling and designed reuse for finite materials. Staff will also make significant efforts to reduce the environmental impact of their outputs. These changes will be made in both manufacturing and service industries, such as hospitality and universities. The pace of change will be slow and steady, and may not attract much attention until it is over.
Many companies are taking steps to improve their environmental sustainability efforts. I chose Walmart from the hundreds of companies that I could select because it is a company located in the heartland. Walmart is the largest physical retailer in the world. They became interested in environmental sustainability as they saw the potential financial gains from renewable energy, waste reduction, and other sustainable practices. Walmart has been using its immense market influence to push suppliers towards environmental sustainability for many years. Their experience has led to them being involved in the sustainability issues of its suppliers. It began a program with HSBC to provide low-cost capital for its suppliers in December 2021 to support supplier sustainability initiatives. According to Walmart’s website:
Walmart today raised the bar for climate action by creating a supply-chain finance program that allows greenhouse gas emissions reductions and, for the first-time, uses science to achieve that goal. Eligible suppliers may approach HSBC to get early payment on invoices approved Walmart. The pricing of the financing is linked with the suppliers CDP scores and targets set, as well as impact reported. Suppliers with the highest ambition will be eligible for the lowest pricing.
This is a sign of the company’s leadership in this area. Its commitment to reducing waste and combating climate change is impressive. This seems to be a core part of the company’s corporate culture. It is becoming more common for Walmart’s massive retail outlets to have their roofs covered in solar arrays. WalmartsCorporate websites of companies note that:
According to the Solar Energy Industries Association, in 2019, Walmart added the most solar of any company in the U.S., increasing our solar use by more than 35%… In 2020, renewable sources supplied an estimated 36% of our electricity needs globally.
Cost savings from the adoption of renewable energies are not controversial and do not require acknowledgement of the reality that climate change is occurring. Walmart could focus on low-cost energy and ignore climate change. The company is clear and open about its understanding and goal to reduce its carbon footprint. According to WalmartsWebsite for corporate:
Walmart is a retailer that has operations in more than 20 countries and sourcing that spans the globe. We are deeply committed to addressing climate changes as a retailer. We are focused on strengthening our business resilience, advocating for climate change action, and targeting.zero emissionsWe will be able to achieve this goal across all our global operations by 2040 without relying upon carbon offsets
Walmart’s engagement in environmental sustainability is unique because it is not something that many customers or employees expect. There are likely to be many Walmart customers who believe in climate change but are not climate deniers. Walmart’s business strategy includes environmental sustainability. It is a sound business strategy that transcends political ideologies.
It will take a long time to get to a circular economy that is based on renewable resources. I am optimistic that the seeds for change have been planted and that the long-term process of transformation has begun.