Why sustainable business isn’t enough
This month, Europe's leading sustainability professionals gathered in London. As I listened to them speak, a question burned on my mind. What happens if we succeed by the sustainability standards we've set ourselves? We report accurately, we meet corporate carbon targets and we stop using modern slaves?
It would be a monumental achievement for many companies. But if all of these ‘sins’ were minus points on a numerical scale, we’d only be moving towards zero.
Sustainable, responsible business is the zero point.
If companies found no ‘modern slavery’ in their supply chain, we’d be at the zero point. If we didn’t wreck the world with coal, we’d be at the zero point. If all businesses became carbon neutral, we’d be at the zero point. If half of chief executives were female, we’d be at the zero point.
But where do we go from the zero point? And do we need to work harder to even get there?
This year has not been a good one for us sustainability professionals. Donald Trump continues to push ahead with tearing up a historic global climate agreement. The Intergovernmental Panel on Climate Change (IPCC) published a report which told us something we hadn’t yet realised: we’re failing.
If we carry on the way we are going, not only will we fail to meet the promise of the Paris agreement – we’ll heat earth by three degrees, melt the ice caps, flood half of Asia and a large chunk of London with it.
If the IPCC report was our wake-up alarm, then the lack of progress on meeting the SDGs is the bucket of water in the face.
You would need only the fingers on two hands to count the number of large UK companies who have materially and scientifically changed their targets, initiatives and impacts because of the SDGs.
The world is still ill. Sustainable business can only be the start point, not the end.
However, there is hope. A new generation is taking hold. They are the millennials and in less than seven years’ time will make up 75% of the world’s working population.
The ambitious environmental change our parents’ generation promised hasn’t fully materialised. The difference is, millennials are committed to doing something about it.
The millennial manifesto is a very different one to that of previous generations. Three quarters would take a pay cut to work at a purposeful, sustainable business. The overwhelming majority (93%) choose products based on whether they are being sold by a purposeful company. Some 73% are willing to pay extra for a sustainable product, according to Nielsen.
When Governments are receding their responsibilities, and trust in their ability to deliver is at a historic low, companies have a duty to say: we’re still in.
Add to this the increasing number of people, and even more millennials (35%-60% according to our Authentic Insights research), who believe that companies should take primary responsibility for tackling climate issues.
But for the millennial generation sustainability is the means, not the end.
Banning plastic straws in the canteen is nice. Commitments to reduce carbon emissions by 20% by 2020 is clever and alliterative. But they’re not enough. You’ll get little credit for meeting your 2020 carbon and water targets. We expect companies to act to neutralise their impact on the environment.
In a world where 3-degree climate change is the new normal, millennial consumers and employees will vote with their feet unless action is bold. They may stop buying your products. When some three quarters study your ESG policies before accepting a job interview, they may not come and work for you.
Where does that leave us?
Millennials demand more. And if we don’t act quicker, we face the worst effects of climate change sooner.
It should be the perfect catalyst, but only if we follow three new rules.
1) Measure your impact, not your outcome. Targets are only good if they lead to action. And action is only good enough when it creates change. Science-based targets, externally validated by the Carbon Trust, for every company, will help drive change.
2) Create behaviour change, don’t just change your behaviour: Managing your own footprint won’t stop climate change. Creating behaviour change amongst your employees and using your brand power with your consumers just might. Want your employees to use less energy? Buy them a HIVE for Christmas and subsidise them switching to a 100% renewable electricity provider.
3) Switch modes: from reactive to proactive. According to our own Authentic Insight research, four in five UK consumers have stopped using a product or service because a company’s response to an issue did not support their view. Campaign for climate action – your consumers will reward you for it.
If we succeed, then in the future we won’t have the need for sustainable businesses. They’ll just be businesses.
Paul Afshar is Partner of Purposeful Business at FleishmanHillard Fishburn