BSR's look ahead for sustainable business in 2013

One look at the daily headlines suggests little reason to be optimistic this new year. We are now in the fifth year of the global financial crisis, the Eurozone continues to sputter, and all evidence suggests that climate change is accelerating even faster than feared.

But these headlines tell only part of the story. As we learned in 2012, when we took a moment to look back and look ahead during BSR’s 20th anniversary year, it is just as important to consider the long-term trends. Sustainability depends not only on the factors that are explicitly related to a sustainable economy, but also on broader changes in culture, technology and economics that define all aspects of our world.

With this in mind, here are some of the big trends we think will shape the sustainable business agenda in 2013.

  • Climate is back—and this time, it’s personal. Numbers don’t lie, and it is clear that warming is accelerating in an alarming way. (And for the deniers still out there, here’s the pie chart to end all pie charts). But some other numbers are even more important. More people are starting to think about how the changing climate affects them personally -- from those in Brooklyn’s Far Rockaway who weathered Superstorm Sandy to the farmers in the more than 2,000 U.S. counties that the U.S. Department of Agriculture designated disaster areas, mainly due to severe drought conditions. The Brookings Institution’s U.S. survey asking whether global warming was increasing has rebounded, after big drops from 2008 to 2010 (though the numbers are still not quite to pre-financial crisis levels). All this points to greater sensitivity on the part of consumers and citizens that could create opportunities for companies with climate solutions, and increased pressure on companies that ignore the issue.
  • Labor rights: Time for a reboot. The tragic fires in Bangladeshi apparel factories provided the coda for a year in which working conditions in global supply chains received renewed attention. Companies relying on such supply chains -- as they all do -- should strengthen their efforts to ensure that basic rights are respected. The old models of disconnected factory monitoring won’t do. BSR’s Beyond Monitoring framework holds the key to progress through (1) greater attention to purchasing practices and product design, (2) advocacy for better public enforcement of existing laws, (3) the enabling of workers to have more of a voice and (4) deeper industry collaboration.
  • New measures of value -- natural capital. While Rio+20 appeared to be unsuccessful, the concept of measuring natural capital gained steam in Brazil last June. It is entirely possible that Rio+20 will be judged a success by economic historians if it marks a turning point away from “externalities” and toward holistic measures of value that deliver genuinely sustainable prosperity. With more companies looking at integrated reporting -- and more considering how to do full-cost accounting that includes natural capital, reputational capital, and other non-traditional assets—the ideal of markets that reward long-term thinking is starting to seem feasible. Success will not be declared in 2013, but there is important progress to be made.
  • Human rights moving to the mainstream. The integration of the Guiding Principles on Business and Human Rights is proceeding quickly inside many companies. By the end of 2013, human rights policies and practice will have completed a two-year journey from leadership practice to threshold expectation. Companies that fall behind this curve will face disrupted operations, reputational risk, and, thanks to cross-border litigation, the potential for legal liability as well.

Next page: More impact from these trends