Ten reasons why we have to rewrite the sustainability rule book, and now
Companies are lagging behind when it comes to action on climate change. Mike Barry shares his top ten tips on becoming the sustainable business leaders of tomorrow.
As a business leader, it’s easy to get stuck in your ways and fail to anticipate the great disruptions that are coming. So when I left Marks & Spencer this summer after 19 brilliant years I was determined to re-appraise what it would mean to be a sustainable business leader in the radically different 2020s.
Based on recent conversations with more than 100 different people, I have compiled ten things business leaders should consider to become sustainable change agents.
1 Movements are not the same as stakeholder engagement
Business is struggling to keep up with the momentum building across society through the call for action on the #ClimateCrisis. The neo-liberal consensus of the last 40 years has left companies ’one-eyed’ in their search for signals from shareholders, NGOs and regulators, and blind to emotional shifts in societal expectations. But the scale, geographical and demographic extent of the global climate strikes has been huge.
Employee movements within companies have become important catalysts for change, particularly in the tech sector. To remain relevant in this climate, companies must respond.
2 Announcing change is easy. Implementing it is harder
Business is slowly responding to the shift in societal expectations. So far, 87 companies have signed up to 1.5°C targets or committed to net zero. Amazon and Google – the new swing voters of the global economy – show how ambitious business can be.
But now the hard work starts. Systemically tackling your carbon footprint across your value chain is a massive undertaking and demands the efforts of your brightest and best teams.
3 Get behind good government policy
The cost of offshore wind has fallen dramatically in the UK. Unsubsidised, it’s out-competing gas. And while bold investment decisions and innovation breakthroughs have been key, these were underpinned by a strong, consistent, long-term policy framework.
The UK has a bold macro framework to become net zero by 2050; it now needs detailed implementation policies to make it a reality. The Global Resources Initiative taskforce’s work on sustainable supply chains shows how government, civil society and business can co-create the right, robust long-term approach.
4 Partnership is key
While some businesses are still looking for points of difference from their competitors, others recognise the need to collaborate for a sustainable future. Many technical partnerships have emerged over the last decade; but now CEOs are owning and driving them.
In his latest venture ‘Imagine’, former Unilever CEO Paul Polman seeks to get CEOs to collaborate for change. How will your leadership team step forward and work with competitors to drive change?
5 Planetary safety and societal equality are two sides of the same coin
A low-carbon shift creates winners and losers. There is a danger that the momentum behind environmental sustainability could crowd out critical social issues. Human rights abuses, an uncertain gig economy and growing inequality are not the foundations for a sustainable future. At the same time, the dispossessed and ‘left behind’ do not automatically flock to the sustainability flag.
The words #JustTransition pop up on the edge of the climate crisis discussion; they must now become central to the conversation.
6 Face the elephant in the room: it’s all about consumption
So much hard work – in forests, farms and factories – is going into making production systems more sustainable. Although this work is mostly sub-scale, it aims to correct many ills of today’s approach.
But efforts to reduce the environmental and social impact of products will be swamped by a consuming middle class, set to grow by one billion in the next ten years. We urgently need to discuss and solve sustainable consumption at scale.
7 A new business model
New companies are already offering great – and much more sustainable – food, fashion and finance. And while some are hitting US$1billion valuation, new business models need courageous investors, stakeholder support and consumer uptake.
The coal industry once laughed at renewables, the car companies mocked electric vehicles and the meat industry dismissed a plant-based diet. Your (sustainable) nemesis is out there. Find it, replicate it, buy it. But don’t sit waiting to join the dodo!
Blog: We need more than business as usual, to leave no one behind – Rijit Sengupta discusses the challenges and opportunities for businesses in India seeking to raise the bar on sustainability
Interview: IIED’s Laura Kelly puts questions to Chris West from Sumerian Partners on the lessons and challenges from impact investing
Blog: When investors go green – Pernille Holtedahl unpacks the growing appetite for green bonds
Blog: Is Davos signalling the end of business as usual? – to coincide with the World Economic Forum, Andrew Norton asks how a progressive sustainability manifesto can omit climate change
Blog: Wanted: corporate global citizens to deliver the SDGs – as global citizens, businesses have a prominent role in the collective achievement of the SDGs, explains David Croft
8 Embrace a new purpose, and make it stick
There’s been a mixed response to the Business Roundtable’s new definition of business purpose, as something more than obsessing with shareholder returns. But while the world’s leading sustainable companies on sustainability will charge beyond it, for thousands of ‘average’ companies this is an important re-statement of purpose.
Outflanking them all, the B Corp movement has launched a serious scale alternative to the traditional plc/inc/Gmbh. It is time to embrace change. Ask your colleagues and customers what they think your purpose is. Listen to them and use what you learn to build a new culture with the supporting engagement, governance and rewards to make it stick.
9 Commit to hyper-transparency
The Fourth Industrial Revolution offers an opportunity to build a sustainable future. It allows us to shine a light into the deep and shady recesses of business behaviour and opaque global value chains.
If consumers, employees and investors have been slow to demand companies be ‘sustainable’ it is due to the sheer difficulty of working out whether companies are ‘good’ or ‘bad’.
But new tools are making it easier for people to assess and point their money/time/commitment in the right direction. Reports and supply chain maps offer little transparency today. The future lies in offering real-time, useful insights on what you do – every hour of every day, everywhere.
10 Empower and reskill
A new movement of energised young people will help create a better future. But it will be at least a decade before they run the companies, banks and governments that will shape it. We cannot sit around waiting for them to seize the reins of power and bail us out.
With help from business schools, we executives can relearn our professions, understand responsibility, risk and opportunity and start leading sustainably today.
This blog has been adapted from an article that first appeared on the Ethical Corporation website.