In management circles, is somewhat apocryphal to opine that’ there are two types of company – the quick and the dead’. This generally refers to the absolute prerequisite for agility in order to maintain business success – the ability to see trends on the horizon and act fast to take advantage of them is critical for all businesses.
For the last several years, it has appeared as though sustainability was not destined to be one of ‘those’ kinds of utterly disruptive trends that all businesses must either adapt to, or face death for ignoring.
Why is that?
A decade ago, the tone of communications around climate change and sustainability was dramatically different from today. I learned during my Masters degree of a phenomenon known as the “value-action gap” – the disparity between people’s attitudes towards climate change and their willingness to take action to prevent it. Successive national governments and the supranational policy-making community have often used rhetoric focusing on the ‘Armageddon’ consequences of inaction on climate change. This narrative left the public cold and did not result in the action or behaviour change required to divert us away from our course to exceed the two degrees warming by the middle of the century.
Businesses haven’t necessarily fared any better. Initial attempts by companies to participate in the climate change debate were largely dominated self-congratulatory efforts to ‘do less harm’. Not a very engaging or appealing message. The commercial imperatives or business advantages of creating a more sustainable business was rarely discussed.
I remember a time not so very long ago when it was hard work getting a hearing in the board room to discuss your carbon footprint, your ethical supply chain policies, or your diversity policy, unless it was couched in terms of cost savings, risk mitigation or regulatory compliance. This ‘tick box’ approach to sustainability has remained the default setting for many businesses in the last decade, and the ambitions of mainstream businesses remain modest at best in their ambitions around corporate social responsibility. I was told by a global financial services business just recently that their management felt it would be ‘unsavoury’ for them to associate their efforts around good corporate citizenship with any tangible commercial outcomes – they preferred simply to be seen as indulging in good old-fashioned philanthropy.
In the last couple of years, however, that mindset has changed dramatically. And just as many of us were beginning to feel as though the message was never going penetrate public consciousness, the penny finally seems to have dropped.
Policy makers and development organisations such as the UN have realised they need business to take up the mantle of communicating the benefits of sustainable living, and lead the charge towards a low carbon economy. And almost overnight it seems the more enlightened businesses are finally realising the full benefits that sustainability has to offer their bottom lines, their profit margins as well as customer loyalty to their brands.
So, what is driving this change? Partly it appears to be partly thanks to rise of Millennials, and their purchasing power, and the fact they have dramatically different expectations about businesses’ social and environmental responsibilities. Then there is the investor community, which seems to have finally woken up to the value of sustainability and is driving awareness in the board room and elsewhere. But there is also the inexorable pace of innovation which has meant clean technologies such as electric vehicles, renewable energy and cradle -to -cradle manufacturing are now reaching maturity and becoming commercially viable.
Is a perfect storm finally forming, the aftermath of which could finally result in the long-awaited and much vaunted transition to the low-carbon, sustainable economy?
I remember back in 1995, Microsoft’s Bill Gates saw the writing on the wall in relation to the impending explosion of the Internet, and he challenged his company to ‘turn on a dime’ to take advantage of that next
wave of innovation before it was too late and they missed the boat. This current ‘rush’ to become early innovators and pioneers of the new clean, low carbon economy reminds me of that time. It feels as though sustainability – following in the footsteps of the other great waves of disruptive ideas such as the Internet or the printing press before it – may be about to have its hour. Those businesses such as Philips, Nike, IKEA, Unilever and others who recognise the convergence of innovation with sustainable products and business practices and can turn their business on a dime to take advantage of it will be the winners in the coming years.
For the rest, it may be a case of adapt quickly, or die.