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What is Decoupling?


While Gucci's sales recovered from the pandemic last year, its overall revenue increased by 10%, while its climate impact remained 15% below 2019 levels. This has been largely driven by a switch to renewable energy, efforts to source raw materials, and the reusing and recycling of manufacturing waste. All of these initiatives have enabled the company to break the link between "environmental bads" and "economic goods," a phenomenon known as "decoupling" that is becoming one of the most significant sustainability challenges.


WHAT IS DECOUPLING IN THE ECO-ECONOMIC FIELD?

Decoupling is generally a circumstance in which two or more activities are separated or do not develop in tandem. In the economic and environmental fields, the term refers to the disconnect between the businesses' gross domestic product (GDP) and the increase in environmental impact, primarily greenhouse gas (GHG) emissions. In other words, companies that adopt decoupling could grow without increasing ecological pressure. Decoupling can either be "relative" or "absolute," depending on the intensity of a company's climate impact relative to its economic output. When environmental pressures increase slower than economic growth, relative decoupling occurs. Meanwhile, absolute decoupling permits the economy to grow while the environmental pressure remains stable or decreases.


DECOUPLING MATTERS

After the pandemic, Thai citizens face several threats to their well-being. According to the Global Risk Index, Thailand is the 9th country that will be most affected by climate change. Currently, the country is facing severe disasters, such as its residents being exposed to dust equivalent to smoking two cigarettes per day and flooding and droughts in several areas. Despite this, Thailand ranks only 39th out of 48 countries in its capacity to deal with these effects. In addition, the Thai population faces economic and financial difficulties, as inflation and household debt have been rising. While some can make a living, most people, such as those with long-term unemployment, low-income earners, and those living in remote areas, still require assistance.


HOW THIS CAN BE COPED?

The World Business Council for Sustainable Development states that businesses cannot succeed in a society that fails. As one of the primary sources of GHG emissions, air and water pollutants, and waste, the business community has a vital role in finding solutions to these social issues. In addition to achieving short-term financial goals, businesses should strive to operate on longer-term models to consider their social purpose. Moving toward decoupling, the company must capitalize on Profit, People, and Planet (3P), or the "Triple Bottom Line," which emphasizes the importance of a company's focus on social and environmental issues alongside profits. By integrating sustainability considerations across the value chain, companies can protect themselves and create value by enhancing operational efficiency, strengthening the brand, and stimulating product innovation.

The need for sustainability in our systems becomes more apparent than ever in the face of environmental volatility, against which decoupling can ensure stability. Decoupling development goals should be the long-term goal of every business so that we can provide stable economic growth, which is the basis for the well-being of future generations.



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