Toby Webb has 11 reasons to be optimistic about sustainability
With the caveat that business has yet to address climate change issues properly, there are reasons to feel positive about the state of sustainable business. The following are perhaps the areas where most progress is being made.
1) The scale of the challenges we face is increasingly accepted. There are some notable exceptions such as the continued scepticism around climate change in 20-30% of the US. Elsewhere, while mainstream media attention to the complexity and interconnected nature of global sustainability issues remains inconsistent and fragmented, awareness has grown of the scale of the challenges.
2) Governance is catching up. The appointment of Michael Bloomberg as a UN climate envoy and the beefing up of the C40 Cities initiative bodes well for the future. Xi Xingping’s 2014 Chinese new year address was entirely dedicated to pollution. Meanwhile Barack Obama is in his second presidential term and wants to leave a legacy. We may well see something put in place at the Paris climate conference in 2015.
Elsewhere, while anti-corruption agencies have improved in investigation and enforcement across the EU and around the world, real performance has been patchy at best. However, anti-corruption is becoming a major social issue in countries from India to Ukraine and the continued enforcement of the US Foreign Corrupt Practices Act, plus recent use of the Dodd-Frank (transparency and traceability) and Lacy (illegal timber) acts are significant.
3) Companies are getting up to speed on solutions. Management systems are converging. One key area is deforestation and the “no deforestation” footprint commitment created by the Consumer Goods Forum, which is driving brands to commit to manage this issue in their supply chains. Another area is toxic chemicals, where Greenpeace and Nike have been instrumental in creating a common platform and open source information sharing via the Sustainable Apparel Coalition.
While the impact of the Carbon Disclosure Project’s work continues to expand to cover issues such as water, we are also seeing the Accord on Fire and Building Safety in Bangladesh gain traction among many large companies. Many other multi-company organisations, such as the Roundtable on Sustainable Palm Oil, are making progress that will change markets in the next five years.
4) Collaboration is making a difference. Collaboration and management are converging in places, and it is happening within sectors, across different sectors and between business and government in ways that it was not five years ago. Successes such as the Extractive Industries Transparency Initiative are being built upon and the once-academic notions of “collaborative governance” are becoming more reality than textbook. Companies are also looking for more coherence and synergies between their external collaborations, rather than simply signing up to dozens of platforms for branding/PR reasons.
5) ICT, software and social media technology is adapting, much faster than many predicted. While much of the technology required for a more sustainable business environment is already in place, scaling its usage is a major challenge. Particularly important is the alignment of the digital revolution – cloud, analytics, social, mobile, the internet of things – and sustainability. This will enable a transformation in the way we interact with organisations and systems as well as track and manage performance and traceability.
Companies such as Asia Pulp & Paper are using – and opening up scrutiny of – satellite tracking of performance and progress on sustainability. Conservation groups are beginning to put unmanned drones to different uses to track and monitor progress. Social media is also monitoring and reporting on bribery and corruption.
6) We’re realising we can't shop ourselves out of trouble. Beginning in about 2006, lots of companies became enthused by the idea of consumers buying into lower carbon behaviours, carbon labels and other product and brand communications around sustainability. The idea was that companies just needed to tell consumers effectively about their green and ethical progress to be rewarded for transparency and that consumers would select the “better” products.
Smart companies knew this wouldn’t work. That desire to communicate incremental progress led to greenwashing, drove NGO campaigns and resulted in consumer cynicism as the ecolabel count rose to more than 400 worldwide. Now companies that understand the agenda adopt a two-pronged strategy. They stay half a step ahead of the customer in communications and lead where risks and focus allow them to demonstrate significant progress, and make a business case for action.
7) Emerging markets recognise the challenges. Some studies show that optimism that these problems can be tackled is highest in emerging and developing markets. We’ve seen CEOs imprisoned over environmental and social incidents and licences to operate removed, and companies have suffered as a result of poor stakeholder engagement. The business case for sustainability is much more obvious in emerging markets than it was a few years ago.
8) Business models are evolving faster and faster. There are circular economy business models emerging at the margins. And, in the mainstream, there are new ideas such as re-engineering inputs in areas such as chemicals, or thinking through how the shift from products to services (ie dematerialisation) is a concept that could stack up beyond just energy at the macro and micro level. This is no longer the preserve of a few geeks, industrial ecologists, chemists and architects.
9) The idea of global consistency in companies is no longer wacky. In the not too distant past, CEOs would talk about global operating principles with local implementation without much thought to what that meant on the ground. Then it became obvious that global policies either were not delivered or did not suit local implementation as scandals emerged or tracking showed patchy progress.
There is an interesting gap in research on how multinationals channel more unified, coherent strategic messages and priorities into external platforms – but more importantly, how they connect the dots internally so that the outcome of such engagements brings value in business development and thinking.
10) Examples of sustained corporate success are becoming longer lasting and more credible. Companies such as Vodafone, Unilever, Shell, Arup, Procter & Gamble and Accenture are being credited with creating “social intrapreneurs” who are able to spot opportunities for products which have a positive impact on the planet. Likewise simple business cases for improved employee engagement at companies such as Alliance Boots, Life Technologies and Reed Elsevier are being made and refined, and increasingly discussed publicly.
While the lack of revolution in business models and the failure of most ethical brands to scale up is well known, transformation and opportunity are now viewed in a more mature way. The Marks & Spencer and Nestlé/Unilever approach of “10 years of incrementalism leading to transformation” is much better understood.
11) The media and financial worlds are grasping the issues more each year. Both sectors have been the most criticised for their lack of progress in sustainability in the past 10 years. Both have been shocked out of basic forms of complacency by scandals in the UK and US, among other countries, in recent years. They still lag behind, and sometimes go back before they go forward, but progress is being made.
Media coverage of sustainability issues is maturing as social media allows readers to point out what’s missing. In the financial markets, poor government signals on wrongdoing and carbon notwithstanding, big institutions are paying more attention to sustainability issues in their balance sheets.
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