Making Sustainable Business a Reality
Sustainable business is a question of leadership, not slogans. To make money and create value for shareholders, society, and the natural world we live in, companies have to encourage change across both systems and culture. | See original e-mail
Hello again. I hope that 2020 is turning out well for you. Also that any hasty resolutions you made have already come to a merciful end.
This editorial looks at a few ways companies might move from the rhetoric of CSR and purpose and ‘better’, to make sustainable business a reality.
‘Sustainability’, what it means
First, I finally overcame my resistance to the word ‘sustainability’.
The idea carries baggage of old-school ‘CSR’ – noble in theory, often hollow in practice. And, with its emphasis on rainforests and polar bears, ‘sustainability’ does not fully capture what the world needs.
Still, it’s hard to talk about the future without this word. And it does say enough to get a conversation going. So I have stopped being a pedant about the whole thing.
Nevertheless, some qualification is required. A sustainable business does three things, not one: (1) makes money; (2) enhances the natural environment, or at least does not make it worse; (3) brings real value to society and / or individuals. Note that these refer to actions, not slogans.
The Challenge in just 200 words sets out why the world needs sustainable business, highlights how companies today are in the firing line, and notes the high-level action leaders can take to move things forward.
Paris Agreement makes economic sense
For governments and many businesses, worries about the economy delay, if not stop, serious work on the climate issue. (See the piece below on Freud for a view on the psychological forces at play within individuals.)
In Paris Climate Agreement passes the cost-benefit test, researchers from the Potsdam Institute for Climate Impact Research show how – from an economic perspective – the Paris Accord is the most favourable path for the future.
If the numbers are right, to arrest global warming gives the best shot at future prosperity. The data sets call into question the thinking that we should leave the current system alone lest any changes further damage the economy.
Fighting Climate Change Is The Cheapest Option We Have Left – Science Alert offers a short, digestible overview of this Potsdam study (helpful for any readers with limited time or an aversion to long, academic sentences).
Economic growth in a responsible future
In Sooner or Later We Have to Stop Economic Growth Richard Heinberg of the Post Carbon Institute claims (somewhat predictably) that economic growth surely will end, and that the world will be a better place for it. Mr Heinberg, keen to ‘de-financialise the economy’, writes that equality substitutes for growth.
I agree that ‘[engineering] a happy conclusion to the growth binge of the past century might be challenging’. In fact, culture and systems are so hard to change that we likely are better off working with the system we have.
The Promise of Green Money captures thoughts I wrote after a Big Four panel debate entitled ‘the transition to a low-carbon economy and to purpose-led business can co-exist with the mantra of growth’. Seven leadership imperatives will help senior teams to make sustainability work in practice.
(The audience changed its mind over the course of the debate, showing how hard it is for a single person to feel confident with all the – ecological, societal, individual, financial and scientific – variables in play.)
Outdated thinking slows change
It’s obvious that a sustainable future demands a fresh approach to business. This means ‘change’. But, change is something many companies do badly.
New Technology, Old Thinking shows how change fails because leaders direct attention to physical assets – new systems, products and technology – yet neglect the unspoken norms that decide people’s actions and business outcomes.
The slowness of change is familiar to many who work in organisations. However, companies must find ways to overcome this omission once and for all – sustainability ultimately is a question of human behaviour.
A new job for the CEO
Beyond the difficulties of change management, sustainable business also demands new leadership from senior teams and line managers.
Many of the leadership skills and personal characteristics are not new. But, again, these are now crucial as companies grapple with intractable demands.
Systems leadership can change the world – but what exactly is it? is a straightforward piece by the World Economic Forum that gives practical advice for the change required to meet the UN Sustainable Development Goals.
In Reimagine leadership: a new job for the CEO I look at the demands sustainable business places on the senior teams of companies, covering both strategic objectives and five personal characteristics of moral character, belief, intelligence, imagination and courage.
Freud on capitalist globalisation
Finally, we should perhaps take a moment to consider the characteristics of our species and the society we built, and how together these have led to the current predicament.
At Cambridge in 2010 I wrote on Freud (it seemed like a good idea at the time). His ideas offer a way to look at the interplay between human nature and civilisation. The ‘fluctuating rhythm’ of the life and death drives illuminates various dilemmas of capitalist globalisation.
Mankind, Nature’s Greatest Disaster is a longer essay (15-minute read) on how the uniquely human psychological forces that cause our self-destruction may likewise guide us toward a more sane society.
(Disclaimer: this piece also contains long, academic sentences, although I have weeded out the more irksome examples.)
If you enjoyed the ideas or found them useful, please forward the newsletter to colleagues and friends, or share on social media.
To make this easier, you can find this editorial and previous ones on our new archive page. People can also sign up there.
And if you have suggestions to make Reimagine more worthy of sharing, please reply to this e-mail and let me know. Likewise for any thoughts you have on the content.
With kind regards and thanks for your support,
Enter your e-mail address for Reimagine, our editorial on the tough questions business faces.