Johnson & Johnson and Staples are among the handful of companies launching a multi-industry group focused on making long-term thinking about climate change a key part of business strategy.
The Next Practice Collaborative, a project of the World Resources Institute (WRI), is founded on the concept of "next practices," a term coined by late WRI board member C. K. Prahalad to describe actions that go beyond typical best practices and focus on future markets.
"What we're trying to do now is raise the bar for what it means for a company to be a leader on climate," said WRI's Samantha Putt del Pino, one of the project leads for the collaborative.
In envisioning a low-carbon, climate-constrained world, those next practices include full transition to clean energy, climate adaptation strategies, creating products and services for low-carbon markets, and taking climate risk into account for business decisions and investments.
"A lot of (company actions) we have seen have been incremental performance improvements," Putt del Pino said. But setting three-year goals or aiming to shave emissions by a few percentage points isn't going to cut it in creating a low-carbon economy in a timely manner, she said. "We are looking for companies to align their strategies, their decision-making and their investments with a vision of a zero-carbon, climate-resilient world," she said.
That means making climate a major consideration in business decisions, in all parts of companies, and creating strategies to adapt to the future and also find business opportunities.
"This is going to be a great source of competitive advantage," said Alex Perrera, the other project lead. He and Putt del Pino are co-directors of WRI's business engagement in climate and technology efforts.
Perrera said the collaborative will first focus on internal capital (aligning investments with sustainability), and products and services (including how to finance and get them in the marketplace).
The founding members -- Alcoa, AkzoNobel, CEMEX, Johnson & Johnson, Siemens, Staples and United Technologies Corporation -- will work in groups on each topic, and the groups and topics are expected to expand as the WRI brings on more companies.
"Getting companies to exchange ideas is very powerful," Perrera said.
The WRI sought out the companies individually with an eye on businesses the WRI has partnered with before and who have "a track record of innovative ideas," he said.
Johnson & Johnson has been working with the WRI for more than a decade. "We have a responsibility to partner with companies who have a similar interest in making the world a better place," said Patrick McCrummen, J&J's senior director of corporate citizenship, "and the collaborative is a collection of companies to do just that."
The internal capital track will look at the challenge of directing money to sustainability-related investments. "You can have two manufacturing facilities being built in a water-constrained environment like the Southwest," Perrera said, "but there is no way to prioritize the one that is more efficient if it is more expensive."
The other track will discuss products and services that will be required in a low- or no-carbon world, how to identify those opportunities and how to finance them.
While it will likely be a lengthy process to create such long-term strategies, as well as vet then and observe test cases, the WRI plans to publicly release insights and other information that comes about from the collaborative's work.
"We are very keen to have a steady drumbeat of insight and information coming from both us and our partners," Putt del Pino said.
Painting image CC-licensed by Ian Muttoo/Flickr