Time to make a step change
A strategy for change calls for a clear vision of the future we would like to see unfold, and a roadmap for how we can get there. On both the global and national levels, what we need is a strategy to enable large-scale systems to adapt to a new regenerative economy – a roadmap stating what we are to do and when, with an understanding the tools we have available. The time is ripe for business to implement change at scale and create opportunities, with the co-benefits of both generating well-being and taking control of environmental challenges.
One of the most profound challenges facing society today is how to transform the global economic system into a safe, fair and sustainable mechanism. The good news is that, since we built the current economic system, we can also un-build and re-build it. The time is ripe to craft a new model for our societies and economies – a model that safeguards the planet whilst creating durable economic vitality and prosperity for all.
Nations, regions, institutions and the entire business sector are all starting to understand this new reality. The discussion on sustainability has moved from the office of the CR manager to the boardrooms, executive floor, parliaments and town halls. At the same time, grass roots movements, entrepreneurs and start-ups are increasingly harnessing sustainability challenges to innovate and create new and better business.
Two big sustainability milestones will take place in 2015: the launch of the new UN Sustainable Development Goals (SDGs) in New York in September and the COP21 climate talks in Paris in December. All eyes are on these processes, which promise to shape our path towards a safe and sustainable future.
In DNV GL, we believe business is part of the solution to the world’s most pressing challenges. In fact more than ever before, the private sector is stepping up and driving change which in turn becomes opportunities for sustainable growth. For businesses, the outcomes in New York and Paris will constitute just another milestone in their transformation.
Today, change is driven by strong megatrends such as population growth, globalization, urbanization, digitalization, connectivity and climate change. The objective of developing a regenerative economy is reframing the debate on sustainability.
Innovation is leading to new companies, products and services; new collaborations and new ways of delivering value that decouple economic growth from the depletion of natural and social resources. Many industries have experienced this kind of disruption already – power generation and distribution, utilities and transportation – and these examples will only multiply, changing the face of every sector in years to come.
The current design challenge is how to engage in traditional policy processes, join diverse action coalitions and apply the creative power of the private sector to come up with new ideas that meet the needs of a resource-constrained but thoroughly connected world.
The business sector is a key driver going forward. The days of green-washing are gone. Companies are increasingly putting sustainability at the core of their business models, leveraging their full capacity, competence and technologies to take new competitive positions.
Climate change is starting to bite, and we need to work on a strategy for change that can take us to a prosperous future at all levels of government, business and civil society.
A strategy for change calls for a clear vision of the future we would like to see unfold and a roadmap for how we can get there. On a global and nation level, what we need is a strategy to enable large-scale systems to change towards a new regenerative economy – a roadmap stating what we are to do and when, as well as knowledge of the tools we have available.
On a company level, we need a fundamental rethink of what the purpose of business is and what a regenerative company looks like.
So which qualities should such a strategy contain?
With a focus on the corporate sector, I believe the following five qualities are important elements to ensure that the strategy achieves what it sets out to do.
A NEW NARRATIVE
The strategy should be based on a new narrative of the economy, and the purpose of the economy and the corporation. It should entail a new conceptualization of wealth and progress, of the future we want to see, and a new purpose for humanity. It should speak to hearts as well as minds, inspire action and bring hope by communicating positive stories of change.
CONNECTED TO A DEEPER PURPOSE
The strategy should explore some fundamental questions, such as what the purpose of humanity is. Today, the purpose seems to be to accumulate and take advantage.
We need to reconnect with nature – and our own natures – and learn how to be regenerative. And we need to evolve our social and economic systems to fit this purpose.
FOCUSING ON CO-BENEFITS AND OPPORTUNITIES
Highlighting the benefits and opportunities of the proposed solutions will increase traction and absorption rates. For example, jobs are political and social currency, and the strategy must explain how it leads to net job creation. Other benefits may include energy security, lower levels of air pollution and health benefits.
FOCUSING ON CONNECTIONS
The strategy must not propose old world solutions to new world problems. Problems today are highly connected and interdependent, and we must resist the urge to prepare simple action plans with prioritizations and lists. Simplification does not allow us to understand the complete picture. The strategy must zoom in on connections – on the relational nature of problems.
ACTIONABLE AND CLEAR
A great strategy does not guarantee success unless it is accompanied by a clear action plan which can be communicated to, implemented and rebroadcasted by a broad set of stakeholders. The strategy must be communicated in such a way that it is easy for a wide range of stakeholders to adopt and convert it into relevant and productive actions and initiatives.
Alongside the need for bold thinking and imagination, we also need to focus some of our energy on critiquing the current system, and on looking for key intervention points which can be leveraged quickly to help us on the road to change. Peter Bakker, the president of the World Business Council for Sustainable Development, has rightly pointed out that we should not become self-congratulatory about the mainstreaming of sustainability into business: if we were to combine all the initiatives of every company in the world, they would not stack up to a row of beans when compared to the scale of challenges we face.
It would be foolish to underestimate the scale of the challenge and the likely turbulence of any transition to a new system. It is not just that those who benefit from the status quo will fight to preserve their privileges. The recent global recession reminds us that when the current system is under pressure, it leads to severe dislocation with sharply rising unemployment and poverty as well as the re-emergence of extremism.
But it is vital that we stay positive and show there are realistic alternatives. A recent survey by the UN Global Compact, Monday Morning Global Institute and DNV GL showed that business leaders worldwide have strong confidence in their own ability to turn sustainability challenges such as water scarcity and the lock-in to fossil fuels into new business opportunities.
As Georg Kell, then Executive Director of the UN Global Compact said in connection with the launch of the report, “Businesses across the planet are not shying away from global risks such as climate change, and increasingly recognize the positive benefits of seizing the related opportunities. The report confirms that there has been a turning point, where private sectors are now a critical driver of sustainable development with emerging economies in the front seat.”
So, my call to action to my fellow leaders in the corporate world would be:
- The overwhelming body of scientific evidence tells us that the physical and biological world is changing rapidly and for the worse. Economic activity is pushing the earth towards its planetary boundaries.
- The consequences will impact the financial performance of businesses in the short and long term. Take responsibility for managing and mitigating impacts, and start adapting to change.
- The purpose of business is to generate value across a broad range of capitals beyond financial, and this should be part of the way in which business is conducted. At the end of the day, business will only thrive in stable, healthy and educated communities.
- Start seeing sustainability as an opportunity. The business case is now incontrovertible. The time is ripe for business opportunities with the co-benefits of both generating wellbeing and taking control of environmental challenges.
- Be vocal about the needs for predictable and smart regulations. Lobby and support politicians to make regulation an effective instrument to drive the right behaviour.
Let’s move on and become involved in the strategy for change.