Jonas Bengtsson* says while it is already on the radar for most companies, a recent acceleration in momentum suggests that sustainability may need to move to the top of everyone’s to-do list.
What was the digital revolution is now business as usual.
It’s becoming harder to remember those bygone days when we had to go to a library to find information, wait to watch the next episode of a TV series or physically hail a cab.
Digital integration has become so pervasive that few companies can expect to survive long, let alone succeed, without a well-honed digital strategy.
We have recently seen a pace of change so rapid — accelerated by COVID-19 lockdowns — that it’s clear digitisation still represents an ocean of opportunity.
Who knows what other uses we can find for the evolving applications of blockchain, crypto-currency and the sharing economy?
Most of us are familiar with the gravestones of those that failed to take digitisation seriously.
Think Kodak and Blockbuster Video stores — textbook cases of head-in-the-sand approaches to systemic change.
However, is it really reasonable to think of sustainability as a comparable tidal wave that will leave a raft of high-profile casualties in its wake?
Cast your mind back a few years, perhaps even just to early last year, and the mood felt very different.
Political will on issues like climate change was stalling and even the most optimistic sustainability professionals expected businesses to lose momentum as they switched into pandemic survival mode.
Instead, we’ve a seen a sudden explosion in activity over that time. Sustainability strategies have gone from ‘nice to have’ to ‘must have’.
United States President, Joe Biden is making decarbonisation and green growth central planks of his Administration, precipitating a race among other world leaders to fast-track their countries’ journeys to net zero and beyond.
Carbon border taxes, previously seen as little more than an environmental economist’s daydream, are becoming a distinct possibility.
Businesses are no longer worried about sustainability being something that might inhibit their success.
Instead, they see the failure to grasp the issue as leaving them at risk of being left behind.
Central banks and financial regulators, having spent the past few years advocating for more rigorous disclosure and highlighting directors’ responsibilities for managing climate risks, are now being backed by Government legislation.
Investors, no doubt encouraged by the latter, are increasing their pressure on boards.
BlackRock boss, Larry Fink’s 2021 letter to chief executives described sustainability as driving a “tectonic shift” in the allocation of capital, and the climate transition as a “historic investment opportunity”.
These issues are not a passing trend.
Not when the main drivers are worldly realities: Growing populations, a once-stable climate system pushed to its limits, depleted non-renewable resources, and social and economic inequalities.
While sustainability is hardly a new topic for business, the focus from policy-makers and financiers, and growing demands from consumers, have changed the terms in which it is discussed, and where the responsibility for action lies.
What started for many as a simple compliance issue has, over the years, moved through the hands of marketing departments into ever-growing sustainability teams, and has landed in boards’ risk matrices.
Even the language and the emphasis have shifted.
We now hear about sustainability as being a core part of business growth strategy and a focus of innovation.
We hear business leaders talk about ‘moon-shot’ goals, such as Microsoft’s carbon-negative target and IKEA’s goal to be 100 per cent circular by 2030.
This transformation of terminology speaks to a new mindset.
Businesses are no longer worried about sustainability as being something that might inhibit their success.
Instead, they see the failure to grasp the issue as leaving them at risk of being left behind, rejected by investors, customers and talent alike.
This new paradigm puts the spotlight on decision-makers, but what exactly should they be doing?
The answer is to treat sustainability in the same way they would treat any potentially game-changing market force.
They need to provide their investors, boards, employees and customers with a compelling vision of the future and plot a strategic path to get them there.
Edge Environment’s recently published research report asked the question: What does sustainability leadership look like?
The findings bring us back, in many ways, to the parallels drawn with the digital revolution.
It found, for example, that sustainability leaders — like their counterparts in the tech world — set audacious goals they often have little idea how to meet.
They embrace failure and innovate quickly; they create a sense of ownership of the issue throughout their business, making it a fundamental aspect of every employee’s role.
One thing that seems clear is that we should no longer expect outspoken chief executives with bold visions on sustainability to be the exception.
Clothing retailer H&M’s recent promotion of its Chief Sustainability Officer, Helena Helmersson (pictured) to the position of chief executive is a global example.
The incoming generation of sustainability leaders are gaining ever-higher ground in the battle to achieve a sustainable, low-carbon economy.
The 2020s are often referred to in sustainability circles as needing to be the decade of action. If business leaders take up the challenge, we might just see that become a reality.
*Jonas Bengtsson is Chief Executive of Edge Environment, an international sustainability advisory company helping organisations get value from creating truly sustainable economies and societies.
This article first appeared on the CEC Magazine website.
