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Why scenario planning matters, and should be re-named

Put “sustainability scenario planning” into Google and not much comes up.

Similarly, Google “corporate sustainability scenario planning” and ditto, there’s not a lot there. The odd paper, the odd mini-section on a company website. Some vendors saying they can help.

The companies you’d expect show up on the first few pages: Shell, Nike, Ford, one or two others.

This quick search demonstrates why most corporate sustainability strategies are not yet smart business.

Largely, as we know, companies are still predominantly reactive on sustainability/corporate responsibility.

This is a major barrier to innovation and longer-term planning. It’s something you should recognise in your company and try and fix.

Of course, I know different terms might be used, and that a lot of companies don’t put their plans/thinking in the public domain.

I’m not suggesting that its only Shell, Nike and Ford that do this. But the search results show there’s not much corporate-inspired public conversation on the area.

There should be a lot more. Big companies are weathering the economic slowdown better than any other large group in society.

And corporate sustainability advocates (including me), spend a lot time moaning about the short term nature of financial markets and systems as the primary reason for the short term corporate outlook. Systems and markets take the blame for our lack of business innovation and understanding of the future.

But they are only half the problem. The other half is down to corporate laziness and lack of clear thinking on behalf of the CR ‘community’ of academics, NGOs, service provicers, media firms and commentators. I’m as guilty of that as anyone.

A company can’t present an investment opportunity to anyone without basic research, and some in-depth scenario development.

That’s what classic business planning and analyst calls, press releases and corporate board meetings, etc, are all about.

“This is what we think will happen, if we do X or Y, and here’s how we back that up”, is how companies sell their strategies to the market.

How can we expect investors, or anyone else (partner companies, buyers, suppliers, governments) to get on board with longer-term planning if we don’t show them what the results may look like?

Now, it’s easy to say “we don’t know, there are so many variables, look at energy futures” etc. And then NOT do scenario planning. (best renamed as “opportunity and risk planning I would suggest)

But that’s simply not good enough. Investors understand that they take risks based on traditional forecasts and corporate planning every day, that’s how it works.

If you as a company, show them you’ve looked long term, and provide viable, credible options for where your firm is going, based on research with independent organisations, you might find investors and everyone else, become a bit more amenable to rewarding you for it.

This is already happening in a few areas, such as water provision and carbon liabilities/opportunities.

But many more areas than not, the investment by companies in seriously understanding the pathways to the future is way behind.

I’m not saying you’ll predict the ‘next big thing‘ this way. But it’s better than stumbling on blindly in hope, surely.

Time to catch up, and reap the rewards.

(If any readers want some help with this, let me know. If I can’t help, I may know the people who can)

UPDATE: 1/09/1: This research from Sweden is worth reading about if you are interested in this area.

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