It’s time for a dramatic change for corporate environment and sustainability professionals. For years, we’ve worked to protect our companies (whether our employers or our clients) from disruption. Now, to do what’s needed on climate and other critical topics, we need to create disruption. We need big step changes, not incremental improvements. We must do this in a way that is smart, substantive and strategic.
We must learn how to be constructively disruptive.
As sustainability professionals, we have two distinct but related responsibilities:
- We are responsible for helping to protect our companies from the consequences of disruption, such as the effects of climate change, social unrest or pandemic.
- We are also the stewards of our companies’ responsibility to help reduce or eliminate the causes and accelerators of disruption, ranging from greenhouse gases to pervasive inequity or inadequate health care.
We’re pretty good at No. 1. That’s laudable. For many of us, preserving value has been our "day job." Protecting a company from the impacts of hurricanes, floods and wildfires is a good thing to do. A lot of my colleagues and clients have done great work helping companies, employees and communities cope with disruptions. Even here we have been cautious, though, celebrating our resiliency rather than facing the need for potentially disruptive adaptation.
Addressing our biggest issues, especially climate change, will require some real disruption. Business as usual won’t get us there.
We’ve been challenged even more by No. 2, helping our companies meaningfully reduce the causes and accelerators of disruption. At times, we focus on protecting our companies from the perception that they’re not doing enough. We’ve focused on transparency, on disclosing enough information about what we may or may not be doing to address the causes of disruption. That’s what gets you better scores from raters and rankers and can keep you off the bad list for investors. But it doesn’t usually reflect the substance of a company’s actions.
We can lose sight of what our companies really contribute to issues such as climate change. We question our business processes but not our business models. We think about what degree of incremental progress we need to be seen as contributing toward addressing the cause. We argue about whether we need a 10 percent reduction in five years or a 30 percent reduction in 20 years. We don’t look at what we would do if our companies had to make a 70 percent or 90 percent reduction in 10 years — which is probably closer to what is needed.
That incrementalism is designed into a lot of new corporate projects and consulting offerings. Science-based targets (SBTs) supposedly raise everyone’s game. In fact, they are very useful — but only in setting the floor and defining minimum acceptable levels. Unless you really believe every company is setting and meeting their SBTs, your targets need to be much, much higher if we are going to make real progress. Similarly, the suddenly fashionable "net zero" pledge can allow companies to use sometimes-illusory offsets to avoid serious decarbonization.
Value through disruption
Addressing our biggest issues, especially climate change, will require some real disruption. Business as usual won’t get us there. If we had any questions about that, the latest IPCC report answered them.
Some companies will do fine with incrementalism in the short term. Some may be so-called "cash cows" that can do very well for some shareholders and stakeholders whose time horizon is only a few years, who want to maximize value and liquidity in that time and who aren’t worried about longer-term implications.
The companies that survive and flourish in the long term are increasingly likely to be those that are making step changes, not just incremental ones. Those will be companies that are willing to disrupt, not merely polish, their current business model. Those will be the companies that develop truly innovative solutions. And those are the companies that will attract investment, attract the best people and be positioned to thrive.
Becoming constructively disruptive
So, what do we do as corporate sustainability professionals? We must change our own assumptions and begin to think that our job is to see how much disruption we can cause, rather than how much we can avoid.
That disruption must be constructive. It must drive companies to include the tough sustainability issues in their strategic thinking, not to exclude them or see them as bolt-ons.
Some interesting approaches are emerging, including from two years of Business Adaptation Project activities across the United States (and, intriguingly, in Africa thanks to my colleagues at IBIS):
- Spotlight the consequences. Business is pragmatic, so show that disruption is already threatening the business. If disruption is "if, when and somebody else’s problem," no one cares. Once disruption is "here, now and costing me money," you have a platform. Climate adaptation is a perfect example.
- Connect the dots. Many businesses are already feeling the effects of climate change, for example, but they may not be recognized. A flood here ("just a bad storm season"), heat stress there ("just a bad summer"), supply-chain breakdowns in another location: those are isolated problems. Connect the dots and show the real picture.
- Expand the voices heard. Go beyond the usual suspects. Beyond the world of conventional business sustainability "thought leaders" there’s a whole world of academics, activists and journalists who are doing amazing thinking about climate, equity, pandemics and health, and how those issues interact. Bring their voices into the corporate conversation.
- Expand the analytical scope. We routinely include customers and suppliers in our analyses these days, but we still seldom include employees and communities. Your facility can be high and dry in a flood, but if your employees can’t get there, or if the community can’t clear the roads so your suppliers can reach you, you’re still out of business. Including employees and communities in your strategic analysis isn’t being warm and fuzzy — it’s smart business.
- Question time frames. Almost every business analysis includes a timeframe, whether looking at corporate strategy or calculating ROI for a single investment. The question seldom asked is, whose time frame are we working on? Corporate executives, who may have five years until retirement and maybe five more to cash in their shares? Investors? Lenders? Employees, who may have 30 productive working years ahead of them?
- Build realistic but challenging scenarios. On the low end, too many "base-case scenarios" are already obsolete, failing to recognize what has already happened in climate impacts, customer expectations or workforce demographics. On the high end, too many scenarios stop short of positing real change. Have a realistic base and then build challenging but real scenarios reflecting strong public, regulatory and investor pressures for change.
- Use your opportunities. We have a lot of communications opportunities ranging from the periodic materiality refresh to routine board updates. Don’t waste any opportunity. Including even one slide of headlines on pressure for change or what leading companies are doing can help change the conversation.
- Provide practical actions. Research proves that research doesn’t drive action. What drives action is the belief that there’s something you can do that matters. Don’t challenge senior management to think differently unless you are giving them practical ways to act differently than anything you’ve proposed before. Constructive disruption is a great driver and opportunity for innovation.
- Put reporting into perspective. Reporting is necessary. Transparency and accountability are good. But none of them should be confused with performance. Getting good scores from raters and rankers is nice, but it is not a strategy. Help the C-suite and the board realize that — and don’t boast of your improved scores as if you’ve actually solved anything.
- Create champions. You can’t do this alone. Identify, enlist and engage the respected voices in your company who may have more standing than you do to raise these issues.
We all certainly have more to learn and share about how do to this in a smart, strategic way. But there’s no time to waste. Let’s start doing it now. Let’s be constructively disruptive.