In shocking times, corporate sustainability needs to pivot
Fresh from chairing edie's Sustainability Leaders Forum last week, sustainable business advisor David Bent shares his three key insights from the event, which brought together ambitious professionals to discuss transformational change.
1) The context is shocking
This year’s Sustainability Leaders Forum was held in the shadow of last year. Here in the UK, the vote for Brexit was a shock – and the election of Donald Trump as US President more so. The sustainability movement had been saying that the status quo was not working for some time, but still this kickback was a surprise.
Yes, billions have been lifted out of poverty in the developing world (or perhaps we should say, the formerly developing world). This is a tremendous, world-shaking achievement. But the global economy relies on undermining our natural world we rely on, especially by driving the climate warmer and wilder. Also, median real wages in developed economies have been stagnant since the 1980s. To quote the recent 'Better Business, Better World' report from the Business and Sustainable Development Commission (BSDC): “economic insecurity and loss of status, dignity and identity have become major issues.”
With Brexit and Trump, the electorates have rejected many of the foundations of the corporate sustainability movement. They have turned inward to protect their own, rather than looking out at global interdependencies. They acted drastically out of anger and fear, not rationally for the long-term. The populist leaders told us we had had enough of experts so let’s have alternative facts, rather than using science and expertise. People distrust big business, government and the status quo. Given the increasing wealth of the 1%, the minimal consequences for bankers after the crash, plus the impacts of austerity, who can blame them?
The events of 2016 were not the shocks we wanted, but they were the shocks we got. (And if you think that’s all the shocks done now, read this). As leaders, we have to act in this context and use the great possibilities of businesses for a sustainable world.
2) There are leaders making great strides
Throughout the two days of the Forum, we heard many stories of businesses trying to do just that. There were companies succeeding through sustainability because they had put it in the core of their business, not as a philanthropic add-on. David Schofield of Aviva and Léon Wijnands of ING both had stories where the past sustainability activity was turned upside down by orientating it around making the business succeed, and that doing so would contribute to a brighter world.
Particularly important was the recurring use of the Sustainable Development Goals (SDGs). Often, they were referred to by speakers as a heuristic device, helping companies make sense of the complexity of the agenda. Many companies present at the Forum had structured their activities to explicitly deliver on one or more of the SDGs – good, in itself. Over time, that opens up the possibility of finding unlikely collaborators, who share intent but can bring different capabilities to the table.
Another theme of the event was the use of the materiality process. Too often in the past, I have watched CSR teams use materiality to find out what they should report, instead of to identify actions that are worth reporting. There is a clear move to using the materiality process to drive strategy - both the overarching business strategy and the specific sustainability strategy - with the sustainability report itself a useful by-product.
The most striking session of the two days for me was when we were joined by people who work in the financial markets. S&P Dow Jones Indices have spotted that there is great short-termism in capital markets, and have created a Long-Term Value Creation Index. Hopefully, this will create a positive feedback loop between companies acting for the long-term and investor expectations about how to outperform, bringing more in capital for those who are acting wisely, and more pressure to change on those who are not.
3) The corporate sustainability field needs to pivot
The question any leader should ask themselves regularly is: should we persevere or pivot?
The Forum’s opening speakers were clear that persevering would not be enough. Jonathon Porritt pointed out that the current model of corporate sustainability is not fit for purpose. It has not pushed against the envelope of the status quo - economic growth that delivered for billions and billionaires, but not for Western working class and also at the cost of undermining the natural world we all rely on. As the BSDC report states: “Many drivers of growth in the past…are no longer sustainable in their past forms.”
Adnams chief executive Andy Wood told us that business had to regain trust by being worthy of that trust - so, actions and consequences not whitewashing initiatives. Therefore, there is a need to pivot, to try to do better things. That will stretch us, and require is to learn by doing. But, as the late American author Eric Hoffer put it: "In a time of drastic change, it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists.”
From the Forum, three key questions emerged for those sustainability professionals who aim to pivot: -
- When engaging and influencing, how can we start where other people are at, not where we think they should be?
A number of the success stories start with failing. They couldn’t influence their audience, whether consumers or senior executive. Then, an epiphany, focus on what was important to the audience. Seduce not preach. Other people don’t have the same understanding of the issues, as well as having different priorities and values. Requiring people to get ‘it’ - the whole sustainability agenda and ethos - is getting in the way. Hence the question, when engaging and influencing, how can we start where other people are starting from?
- How can went put our efforts where accelerating change is possible and has potential?
It is becoming clear that different sectors have different possibilities. As the BSCD report delicately puts it: “With a few notable exceptions, companies in the fossil fuels sector have struggled to develop a compelling, science-based description of the sector’s long-term role in a world taking steps to limit global warming to well below two degrees.”
Some industries need to go into managed decline, with support for the regions and people who currently rely on them. Other sectors have tremendous potential and need to grow. Let’s put our effort where making a difference is possible and worthwhile.
- How can we connect our personal ‘why’ to other people’s, and to the organisation’s higher purpose?
Throughout the two days of the Forum, we kept returning to purpose; our personal one embedded and entangled in others’. Asking 'why’ can unlock so much from ourselves and from our organisations.
In sum, NOW is the time. The opportunity is there, but will not be grasped by us doing more of the same. The task of our generation is to put the world on a sustainable footing.
I hope the Forum attendees found at least one thing they could do differently. They can be leaders who accelerate change. Good luck to them.
David Bent was Director of Sustainable Business at Forum for the Future. After 13 years with the Forum, David is now exploring ways to advise, initiate and lead institutional interventions that accelerate the evolution of our global society toward a sustainable footing.