Eleven reasons to be optimistic about sustainability (climate change notwithstanding)

An Indonesian rubber tapper photographed by the author in Riau, Sumatra, on Feb 3 2014. This farmer makes 80 US cents per kilo of rubber he produces. The land behind him is being deforested by his community due to poverty. Today, awareness that deforestation and forest protection is as much about community poverty as it is about the profits of companies guilty of past and current deforestation is higher than ever before

(This post is also available as headers with images at this link on Slideshare and the presentation version is also embedded at the end of this post)

1) The scale of the challenges we face are increasingly accepted 

This is broadly true, with some notable exceptions such as the continued scepticism around climate change in much of the US. 

Elsewhere, whilst mainstream media attention to the complexity and interconnected nature of global sustainability issues remains inconsistent and fragmented, awareness has grown fast as to the scale of the challenges. 

Research by a wide number of organisations over the last decade has demonstrated that awareness is rising worldwide as Internet and ICT penetration increases.

2) Governance is catching up, faster than before

There are real innovations taking place at national level despite the apparent ‘wobbles’ like the EU, and perhaps even more promisingly at city level. Bloomberg’s recent appointment as a UN Climate Envoy and the beefing up of the C40 Cities initiative might well bode well for the future. 

Xi Xingping’s 2014 Chinese New Year address was entirely dedicated to pollution. Meanwhile Obama is in his second term and wants to leave a legacy. So it is just possible we will see something put in place at the Paris COP in 2015. Which would be the real game changer.

Elsewhere, anti-corruption agencies are supposed to have been improved in terms of investigation and enforcement across the EU and around the world but real performance has been patchy at best. 

However, with anti-corruption becoming a major social issue in countries from India to Ukraine to Indonesia in recent issues and the continued enforcement of the US Foreign Corrupt Practices Act, plus recent use/passing of the Dodd-Frank (transparency and traceability) and Lacy (illegal timber) acts is significant if enforcement activities improve.  

The European Commission is now redefining CSR around companies being responsible for their impacts on society.  For example mapping ecosystems around material issues, identifying points of leverage and impact, designing partnerships, and trying to track and measure over time adjusted for causality and real-world developments. 

Understanding real impact is a big space to fill in the years to come, but at least the Commission, for now at least, is trying to push industry and policy focus in that direction. But there are doubts that corporate governance is really catching up and the European Commissions’ capacity to lead may be diminished depending on forthcoming European Parliament elections in 2014-15.

3) Companies are getting up to speed on solutions, much faster, and taking swifter action. Management systems where possible, are converging

There are numerous examples of this. One key area is deforestation and the “no deforestation” footprint commitment created by the Consumer Goods Forum, which is driving brand after brand to commit to manage this issue in their supply chains. Another area is toxic chemicals, where Greenpeace and Nike have been instrumental, amongst others, in creating a common platform and open source information sharing via the Sustainable Apparel Coalition. 

Whilst the impact of the Carbon Disclosure Project’s work continue to expand to cover issues such as water, we are also seeing the Accord on Fire and Building Safety in Bangladesh gain significant and immediate traction amongst many large companies. Many other multi-company organisations, such as the Roundtable on Sustainable Palm Oil, despite facing significant challenges, are making progress that will change markets in the next five years with the right kind of Government support.

4) Collaboration, whilst over used as a word, is in places making a real difference

As mentioned above, collaboration and management are converging in places, and collaboration is happening within sectors, across different sectors and between business and government in ways that it was not five or ten 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 simply 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. Which is a good thing, but poses real challenges to the membership organisations and groups, which have sprung up in the last decade.

5) ICT, software and social media technology is adapting for the better, much faster than many might have predicted

Whilst much of the technology required for a more sustainable business environment is already in place, scaling its usage is a major challenge. But the technology curve continues to move at pace. 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 terms of the way we interact with organisations and systems as well as track and manage performance / traceability e.g. both social and environmental. 

Companies such as Asia Pulp & Paper / Sinar Mas are using – and opening up scrutiny of – satellite tracking of performance and progress on sustainability. Conservation groups are beginning to put unmanned aircraft/drones to different uses to track and monitor progress. There are many many other examples. Social media is also being used to monitor and report bribery and corruption. Over time this will have a significant beneficial effect.

6) We're realising we can't shop ourselves out of trouble

Beginning in about 2006, lots of companies became enthused with 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 need 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 and that it wasn’t a new idea. That desire to communicate incremental progress lead to much accidental and some intended greenwashing, drove campaigns from NGOs and resulted in consumer cynicism as the Eco label count rose over 400 world-wide. Now companies who 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. We now all agree more than ever that whilst consumers want to trust brands, and to have credible information when they want it, they don’t want the detail on a daily basis, or to have to make too complicated a set of choices when shopping.

7) Emerging markets, whilst volatile, show in research they both recognise the challenges and have optimism many can be tackled

As mentioned research shows rising awareness of the sustainability challenges around the world. Some studies show higher levels of optimism that problems can be tackled particularly in emerging and developing markets around the world. 

Here's an extract from the latest edition of Ethical Corporation:

"The proportion of people saying that they trust corporations appears to have stabilised at about 58%, according to the 14th annual Trust Barometer from PR consultants Edelman. High trust levels of 70% or more are seen in emerging markets including ChinaIndia,Indonesia and Mexico, though consumers there tend to trust foreign corporations from countries such as Germany and Sweden rather than home-grown brands. Developed economies are much more cynical about business, with trust scores of only 43% in France41% inIreland and 38% in Spain. The most trusted sectors are technology and automotive, while the least trusted are media and banks. In line with previous Edelman results, NGOs are more trusted than businesses, scoring 64%. But trust in government has plunged – only 44% of those surveyed think they can rely on their political leaders."

It’s also clear that citizens, voters and Governments are willing to make changes quickly, which affect the business environment. 

We’ve seen CEOs imprisoned over environmental and social incidents, licenses to operate removed and companies suffer hugely 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. This is just as true when it comes to opportunities (agricultural productivity or ICT rollout) as it is with regard to risks.

8) Business models are starting to evolve, and that is accelerating

The Circular Economy business models emerging at the margins and the mainstream from the share economy, to re-engineering inputs in areas like chemicals, to thinking through the shift from products to services (dematerialisation etc.) is actually for the first time 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. There was a big shift this year at Davos with regard to this ‘mainstreaming’. This will accelerate.

9) The idea of global consistency in companies is no longer a wacky idea, but has a long way to go

In the not too distant past CEOs would talk about global operating principles with local implementation without too much thought as to what that meant on the ground, every day. Then it became obvious that global policies that either were not delivered on or did not suit local implementation as scandals emerged or tracking showed patchy progress. 

Now companies are still struggling with consistency challenges but many no longer delude themselves as to the size of the challenges ahead. 

There is an interesting gap in research to be filled on how MNCs 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 (disparate) engagements brings actual value in terms of business development and thinking.

10) Examples and case studies of sustained corporate success are becoming longer lasting and more credible and business-case oriented 

Companies such as Vodafone, Unilever, Shell, Arup, Procter and Gamble and Accenture are being credited with creating “social intreprenuers” who are able to spot new 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, amongst hundreds of others, are being made and refined, and increasingly discussed publicly. 

Whilst the lack of revolution in business models and the failure to scale of most ethical brands is well known, transformation and opportunity is now, and will continue to be, viewed in a more mature way. The Marks & Spencer and Nestle/Unilever approach of “ten years of incrementalism leading to transformation” is much better understood, rather than searching for a silver bullet that doesn’t exist.

11) The vitally important media and financial world, though laggards, are grasping the issues more and more each year, and making faster changes which will only accelerate

Both the media and financial sectors are probably jointly the most criticized for their lack of progress on the sustainability agenda in the last ten years. Both have been shocked out of some basic forms of complacency by significant scandal in the UK and USA, amongst other countries, in recent years. They still lag way behind, and sometimes go back before they go forward, but progress is being made, albeit more slowly than in most other areas of business. 

Media coverage of sustainability issues globally is slowly maturing as social media allows readers to point out what’s missing, and in the financial markets poor Government price signals on wrongdoing and carbon notwithstanding, big financial institutions are paying more attention to sustainability issues coming closer to their balance sheets with each passing week.

There's a presentation version of this post, minus most of the text but with images here. It is also embedded below:

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