7 questions that will shape the future of sustainability
From Europe's refugee crisis to the rise of renewable energy and advanced manufacturing, a wave of change will reshape the way businesses engage.
It’s a challenge for everyone: Where should I focus my effort? What’s worth trying now, and what do I need to prepare for? To answer these questions, you need to be scanning what’s changing in the world.
Here at Forum for the Future, we’re just concluding our annual scanning cycle. Our Futures Centre, based in Singapore, scans what people are talking about, what they are innovating and what is being financed on sustainability solutions.
We feed in our experiences with leading companies around the world. And we take a view — part analysis, part instinct — on what will be more important on sustainable business the next two years.
Here’s our current list, which covers climate change, European turmoil, gender empowerment, manufacturing, citizens and better scaling of innovations. Each trend also includes a question for your business.
What do you think?
1. Sustainable Development Goals: the new framing device?
The SDGs were announced only late in the year but the difference is noticeable. Unlike the Millennium Development Goals, the SDGs are universal and every country is required to say how they will meet the goals.
There’s no guarantee, but we expect the SDGs will be the new framing device. At first, leaders will be expected to say how their sustainability plans align with the SDGs. Then people will realize that business-as-usual will not be enough.
Your key question now: How is your business transforming markets so the SDGs are met?
2. Extreme climate change more likely
Climate science keeps getting more certain that impacts will be more severe than earlier projections suggested.
At the time of writing, the COP21 United Nations climate talks are just over a month away. The rumors are of a global deal that is a step forward, but still well short of keeping warming below 2 degrees Celsius since pre-industrial levels. The best we can hope for is a deal which is a stepping stone to the deal that we really need.
How would you have to transform your business strategy for extreme climate change?
There is some good news, however. A renewables revolution is underway, with an 80 percent drop in price of solar PV in the last five years. Elon Musk is making energy storage sexy. Community energy projects are making disturbed renewables a reality in pockets.
Even so, it’s likely people will start concluding it’s too little, too late. We can expect talk of geoengineering and carbon capture and storage to rise, along with positioning gas as a bridging technology (something we fear will slow diffusion on the renewable technologies we need).
Your key questions now: How would you have to transform your business strategy for extreme climate change? How are you riding the energy transformation?
3. Europe’s turmoil intensifies
The crisis in Europe on refugees symbolizes many things, from the failure of global governance to the slow response times of European institutions.
Already, many Europeans were feeling left behind and that normal politics wasn’t working for them. This polarized mood has been further exacerbated by the migration crisis.
On one side is "solidarity," those offering rooms to refugees and cheering them into train stations. On the other is an effort to "protect your own," with people fearing refugees take state handouts and jobs. Populist politicians on both left and right and from across the continent have been capitalizing on these moods. (We can also see some of this in the U.S. with Sanders and Trump.)
The drivers of the crisis — people feeling left behind by globalization and technological change, refugees escaping various conflicts, institutions slow to react — are not going away. We can expect the turmoil to intensify.
This matters in terms of how you frame your approach to sustainability. Acting for future generations or people far away won’t work if enough people are trying to protect their own.
Your key questions now: How will the polarized mood — 'protect your own' vs 'solidarity' — affect the sustainability narrative you use?
4. Gender empowerment as force for positive change
The push for equality and diversity is not new. What we believe we’re seeing, though, is the start of a new phase. In industrialized countries the call is for women to Lean In, but also for change in the nature of male-dominated corporate hierarchies.
The London School of Economics’ Gender, Inequality and Power Commission recently concluded, "The burden of the argument should now shift from the under-representation of women to the unjustifiable over-representation of men."
In emerging nations, gender empowerment is crucial on health, birth rates, education attainment, skills and more. We can expect the push for greater gender empowerment to grow.
Your key question now: How can your business be proactive on gender empowerment to drive positive change?
5. Manufacturing reconfigured
In this area we see several factors combining. Labor cost differentials between countries are leveling off. There’s a growth in automation, Big Data and other digital technologies. Additive printing makes localized, bespoke production cheaper. Yesterday’s contract suppliers are today’s design-to-delivery service providers.
How these factors will combine is complex and uncertain. But the next two years will see much experimentation in distributed manufacturing, with changes in what is made where by whom.
The next two years will see much experimentation in distributed manufacturing, with changes in what is made where by whom.
That will affect sustainable supply chain policies and management. It will challenge consumer labels and auditing.
Your key questions now: How will your business reconfigure your value network to take advantage? How will you make the best of it, from a sustainability point of view?
6. Citizen Innovators do it themselves
We all know that incumbents rarely drive change. We’re used to the idea that creative-destruction comes from an entrepreneur, a new entrant, an idea that had been hidden in an R&D lab. Well, in our work we’re beginning to see a new source: Citizen Innovators.
People are looking at the problems around them and trying to address them directly, not through politics or existing businesses. Thanks to digital platforms such as crowdfunding sites, individuals have the ability to execute new solutions that previously only big institutions could try.
According to the Harvard Business Review in the U.K., 6 percent of adults had created or modified consumer products within the past three years. Currently at the margins, we see more people moving from being passive consumers to active citizen innovators.
Your key question now: How can your business better engage the Citizen Innovator?
7. Better ways to scale niche innovation
Famously, innovation is an idea that works. There are plenty of good ideas, but few of them reach scale.
The last few years have seen developments in how people understand when, why and how an idea scales. Techniques such as strategic niche management and creating prizes are more familiar than ever.
We expect greater sophistication in the sustainability space, with more companies testing how to scale their sustainability bets by through a bespoke combination of growing user-demand, growing the ability to supply, creating replicable business models, using standards to transfer best practice, creating platforms to share common costs and more.
Your key question now: How could market-shaping instruments be applied to your business' big sustainability bets?
What do you think? If you agree, disagree or have a thought you’d like to share, drop me a line at [email protected].