Climate Change, CSR and Sustainability

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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